A very interesting question. What we see in the biosimilar space that we don’t see as often in the generic drug space are brand companies really aggressively pursuing biosimilars of competitor products. We do see companies like Amgen play both sides of the fence. We also see that, at least with respect to questions like “what are the requirements of the patent dance? Is it mandatory, is it not?”, Amgen has really had to be very careful in the line in takes.

As a biosimilar defendant, where the economic imperative is to get to market as fast as possible, whereas on the branded side every day of delay, every month of delay represents an economic advantage. We do see currently that companies that are playing both sides of the fence have to be very, very careful. Since a biosimilar can be quite profitable though, and since biosimilars present one way for branded companies to compete against their other branded competitors, I don’t think Amgen will be alone. I think we will continue to see branded companies really vigorously pursue biosimilar opportunities of competitor products.

Videos

Robert Cerwinski, JD, partner at Goodwin, discusses the challenges that reference product sponsors encounter when they also seek to develop biosimilars.

Robert Cerwinski: Reference Product Sponsors and Biosimilar Development

What are some of the major regulatory and policy differences between biosimilars in the US and the EU?

In the European Union, they’ve had biosimilars than the US—they’ve had them in clinical practice for about 11 years. Comparing the two systems is very challenging in a lot of ways, but there are some fundamental differences. A couple of the main differences are that the European Union doesn’t require an additional level or designation of interchangeability to drive automatic substitution. In the US, the FDA requires that, so there will be no automatic substitution unless the interchangeability designation is met. So that’s a pretty significant difference because of the investment required to obtain that designation. There are also changes in naming and labeling. In terms of naming, the European Union determined that there does not need to be a suffix, so no designation because the biosimilars, as they will in the US, have a separate brand name but the generic name or the INN looks the same. Lastly, with labeling, labels in general look very different in the US versus the EU but there’s very little distinction in terms of biosimilar label versus the reference product, in part because the EU has more experience potentially, so there are some key differences. I think the biggest though is interchangeability and I think time will tell as to what that designation means in terms of value to all stakeholders, health plans, physicians, and patients.

Molly Burich, MS, associate director of public policy: biosimilars, pipeline, and reimbursement at Boehringer Ingelheim, discusses major regulatory and policy differences between the European Union and the United States.

Molly Burich: Biosimilar Regulation and Policy in the European Union and the United States

Interchangeability, switching, substitution: there seems to be some confusion about these terms. Can you clarify?

Switching and substitution both refer to the process of moving from one drug to another; for example, from a biologic reference drug to a biosimilar drug. Substitution refers to the specific process in which a pharmacist receives a prescription from the doctor for one drug, for example the reference biologic. But instead of dispensing that drug, instead it dispenses a biosimilar drug or a different medication that has been FDA approved as an interchangeable drug. That pharmacist is in a state or jurisdiction in which that process has been regulated and laws have been put in place. So, the patient ultimately receives, for example, the biosimilar drug after the prescription was written for the reference biologic. In contrast, switching refers to a prescription being changed. So a physician, for example, is treating a patient with the reference biologic and instead decides—and usually we anticipate with the patient&mdash;to write a prescription for the biosimilar and then that prescription goes to the pharmacy and the pharmacist dispenses the biosimilar. Interchangeability is the condition of a biosimilar that makes it legal for the pharmacist in certain jurisdictions, to make a substitution and that’s a process that’s being developed right now at the FDA. FDA has issued what we, at the American College of Rheumatology feel are very good guidances about how to design a clinical trial to prove that a drug can be substituted&mdash;or in other words, that a drug in interchangeable with a reference biologic&mdash;because the clinical trial design involves switching back and forth and alternating 3 times from the reference drug to the biosimilar, back to the reference drug, then back to the biosimilar. So, 3 switches, and then deciding that the drug is safe and effective at the end of that process.

Angus Worthing, MD, FACR, FACP, clarifies key biosimilars terms. 

Dr Angus Worthing: Clarifying Biosimilar Terms

Ha Kung Wong, JD, Partner at Fitzpatrick, Cella, Harper and Scinto

With so much litigation surrounding biosimilars, are companies hesitant to enter the space?

I don’t think that litigation is going to deter companies from entering the biosimilar space. There’s much more litigation in the small-molecule space via Hatch-Waxman regarding Abbreviated New Drug Applications, or ANDAs, than there is with biosimilars, and it’s never deterred companies from developing generics. In fact, according to the FDA, in 2016 there were 159 more ANDA approvals than in 2015, and 242 more ANDA approvals in 2014.

I think there will be companies hesitant to enter the space is the resource commitment necessary to develop a biosimilar and not so much because of the litigation. Unlike a generic small molecule, biosimilars require some clinical trials, and if they want interchangeable status, they’ll also likely need a robust switching study. That, along with the unpredictability in developing biologics and the necessity for significant facilities in terms of eliminating contamination and working with live cells, makes entering the space a daunting first step.

Now that said, biologics tend to be blockbuster drugs, and so far we haven’t seen a significant discount with respect to biosimilar pricing. So biosimilars have the potential to generate similar margins as innovator biologics without some of the upfront costs of development.

The other issue may be the fact that biologics tend to have many more patents than small-molecule products. So just as a matter of sheer volume, you’re going to see more patent challenges developing in the biologics space over time, in particular at the Patent Trial and Appeal Board, or the PTAB, at the USPTO via the post grant review and Inter partes review process.

But, I suspect many companies also see the importance and potential of being in biosimilars, particularly if there’s a clear path to interchangeable status. And one thing you can always count on in science is that someone will have the passion and vision to pursue this.

Ha Kung Wong, JD, Partner at Fitzpatrick, Cella, Harper and Scinto, discusses whether patent litigation could deter drug makers from developing biosimilars.

Ha Kung Wong: Biosimilar Developers' Concerns About Litigation

What impact does current guidance on naming and labeling have on prescribing biosimilars?

I think we’re very thankful that the FDA has released draft guidance on labeling and finalized its naming guidance. These are both important steps. The labels and the names in many ways are how patients and physicians know the product and learn the product, and for physicians how they understand the clinical data behind it.

In terms of labeling, we support that the label should look very similar to the reference product. After all, these are biosimilars to the reference product, so we believe that those labels should look very similar and are pleased with the direction the FDA seems to be taking in labeling. As it pertains to naming, the FDA did end up finalizing the use of a four-digit suffix that is devoid of meaning. I think this is a little bit challenging and this result was not what a lot of stakeholders, including some biosimilar manufacturers, wanted to see. I think we would have preferred that a suffix, if it’s needed, has to be meaningful so that doctors and patients, if needed, can remember it and it’s attributed to the manufacturer.

Unfortunately, that isn’t the way the agency went. So, that’s another opportunity for education to make sure that physicians know our suffix, know that it’s devoid of meaning as much as they can remember it, and that patients certainly understand that while there is a suffix that differentiates it, it doesn’t mean the product is any less safe or efficacious.

Molly Burich, MS, associate director of public policy: biosimilars, pipeline, and reimbursement at Boehringer Ingelheim, discusses current FDA guidance on the naming and labeling of biosimilar treatments. 

Molly Burich: Biosimilar Naming, Labeling, and Prescribing

What benefits do biosimilars offer to providers and to the healthcare system?

Biologic drugs have really revolutionized the practice [and] treatment of rheumatoid arthritis, and other autoimmune diseases, but that has come at a tremendous cost and oftentimes the price is a lack of access to drugs. So, it’s one of the things that gets me up out of bed in the morning, and what I really like my job for, is that I can see people, and diagnose them, and put a treatment plan in place that’s going to get them back to work and reduce their aching joints. But, it’s heartbreaking when people can’t get access to the drugs because they’re too expensive. The best thing that biosimilars give to providers, and also to patients, is the promise of increased access to care, so that everybody who needs one of these drugs can get on it, afford it, and have it also be affordable for society at large—that’s the benefit of biosimilars. In short, that’s the benefit of biosimilars.

Angus Worthing, MD, FACR, FACP, discusses the benefits of biosimilar medicines.

Dr Angus Worthing: The Benefits of Biosimilars

Is there a specific policy that’s missing from the biosimilars market?

I think there’s several areas that manufacturers are looking for clarification in and bringing biosimilars to market around the patent dance and a lot of other different things that the FDA still has to put out guidance on. But, one of the biggest payment policy issues that I think is being ignored right now, that will be an issue as more products come to market, is how biosimilar products are being treated under the Medicare Part D. Currently, if you are taking a branded product and you hit the doughnut hole, and you’ve spent, now you’re responsible technically to pay the full cost of your drug—well, the coverage gap is closing now and manufacturers can offer this discount for you to help you get out of the doughnut hole but not have to pay the full cost of your drug.

So, if a drug was $100 before the patient would have paid $100 and that money would have counted toward their true out-of-pocket and gotten them through to catastrophic. Once they get into catastrophic coverage they are only responsible for 5% of their drug cost. Well, with the coverage gap discount program, the manufacturer said, we will now pay 50% of the drug cost, the patient will pay 45% of the drug cost, and then the plan kicks in the final 5%. That’s how the coverage gap will close by 2020. That money though, that the manufacturer is giving to the patient, counts as their true out-of-pocket cost. Biosimilars are not considered branded products in the eyes of Medicare for non-low-income subsidy beneficiaries. So, when they hit that coverage gap, the drug will be treated as a generic product instead of as a branded product. Now the patient will have to pay a higher percentage relative to what they would have paid if the product was treated as a branded product and what the plan is picking up—so now it’s a share between what the plan and the patient has to pay. What the plan is picking up does not count toward that troop and help the patient get into the doughnut hole. Because we are seeing a lot of these products coming out right now that are on the Part B side and not on the Part D side.

There really hasn’t been a final answer on "was that the intent of this or have we just not addressed it yet?" I think manufacturers will be looking for that guidance moving forward. For low-income subsidy patients, a biosimilar is counted as a branded product, so they do pay a higher copay when they access the drug if someone is an LIS beneficiary. So, this inconsistency is definitely something that will need to be addressed in the future. Not just LIS and not LIS but for the Medicare program as a whole.

Amanda Forys, MSPH, discusses the critical lack of clarity in the US biosimilars marketplace. 

Amanda Forys: The Need for Clarity in Biosimilars

How do drug makes feel about the current reimbursement code policy for biosimilars?

When the Centers for Medicare and Medicaid Services finalized their payment rule under the physician fee schedule and the outpatient prospective payment system for 2016, they kind of surprised manufacturers; they told them that instead of each customer coming out and being assigned its own billing code, or HCPCS code, that they would all be grouped together, which would be separate from the reference products. So, biosimilar A, B, and C would all share a code while the reference product sat on its own. When you think about the way the current market works with generic products—when a generic comes to market it shares a code with the branded product. So, you can have the brand and 10, 12, 15, however many generics are on the market, sharing that code, but in this case, this was a little bit unexpected and manufacturers did not expect the same policy to be followed as the generic policy because the BPCIA, which was put in place to establish the biosimilars approval pathway, doesn’t really allow for that.

The language wasn’t really intended for them all to be grouped, but they were not expecting them to all be grouped separately; what the manufacturers were expecting was that they were each going to get their own billing code, and therefore control their own destiny with their average sales price. So, this policy has been a little bit of a surprise to the manufacturers and those that have been bringing these products in, and have been really working hard to point out the differences to lawmakers and to regulatory bodies that we are not a generic, we are a unique product, we’re not biosimilar to one another—so grouping us together can create challenges from providers’ perspectives, and understanding our products. We should be treated separately as individual products and given our own code.

CMS tried to circumvent that by saying “let’s keep them all together in one code, but let’s assign a random 2-digit modifier that has to be placed on the claim,” and now that’s something that’s adding a burden onto the providers that isn’t really there for any other product. You don’t see any other product class where the manufacturer name has to be said with a modifier code. So, I think most manufacturers on the biosimilar side would like to see CMS re-evaluate this policy. It was open for comment this year for the 2018 Medicare physician fee schedule, so we’re hoping that we’ll get good data out there in the world about what’s happening with biosimilars and what’s going on with the market. CMS specifically said “we would like to see real evidence on how this could affect the market.” So it will be interesting to see if that data comes out and if CMS decides to keep the policy as is or if they decide to follow what the biosimilars manufacturers are asking for and separate the drugs.

Amanda Forys, MSPH, senior director of reimbursement policy insights at Xcenda, discusses current reimbursement policy for biosimilars. 

Amanda Forys: CMS Reimbursement Codes for Biosimilars

As biosimilars become more prevalent in the United States, what is the biggest challenge that the pharmaceutical industry will face? 

So, I think the biggest challenge that manufacturers face is really educating stakeholders to make sure that they understand the value of biosimilars. Physicians need to understand how they’re made, how they’re developed, and how they’re approved, as well as feel comfortable utilizing them in their patients. Patients need to see the benefit both clinically, as well as economically—the whole premise of biosimilars is around being able to bring lower-cost alternatives to market. Lastly, health plans, they need to see the benefit of pushing biosimilar use as well. All of this comes through both a combination of education and experience, and with any brand-new market, we have our work cut out for us. So, I would say the biggest challenge really revolves around ensuring a positive experience for all of our stakeholders and driving education to make sure that they’re utilized.

Molly Burich, MS, associate director of public policy: biosimilars, pipeline, and reimbursement at Boehringer Ingelheim, discusses the challenges the industry faces with respect biosimilars. 

Molly Burich: Industry Challenges with Biosimilars

Former CMS head Andy Slavitt recently spoke about the need for a “champion” in Congress who can ensure sufficient budget allocation for healthcare. Do you agree?

I do, I think Andy Slavitt has a lot of good ideas about healthcare reform in the US. I think we do need champions in Congress right now to help fix the system. One important part, as we talk about biosimilars, is that we need to support the Food and Drug Administration as it hires experts that are needed to both review and approve safe and effective drugs—that’ll be biosimilars that we use, but also that will create guidances for manufacturers to come up with the right clinical trials and clinical trial designs to prove and give confidence to doctors and patients that the drugs work effectively. So, I think it’s important to fund the agency appropriately and we need champions in Congress to do that. Fortunately, this Congress has already authorized the Biosimilar User Fee Agreement of 2017, and the President signed it into law. So, that’s an important first step to that process.

Angus Worthing, MD, FACR, FACP, discusses the need for adequate funding for the FDA and healthcare. 

Interviews