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.

Videos

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. 

Dr Angus Worthing: Congressional Budget Allocation for Healthcare

FDA granted tentative approval to Merck for an insulin glargine follow-on pending the outcome of Hatch-Waxman litigation; does the fact that FDA regulates insulin as a drug have an impact on the litigation process?

I think it does. The Hatch-Waxman laws were enacted in 1984 and we’ve had a lot of practice with these litigations in the district courts and appellate courts, and the metes and bounds and contours of the Hatch-Waxman laws have been pretty well defined through decades of adjudication. It’s a pretty rapid and efficient timeline from [Abbreviated New Drug Application, ANDA] filing to final resolution of the appeal—pretty well-oiled litigation procedure. We have a lot more uncertainty with the [Biologics Price Competition and Innovation Act, BPCIA]. It’s a new statute, courts are just adjudicating it now for the first time, and we are seeing a lot of&mdash;I wouldn’t say confusion&mdash;but a lot of testing of the gray areas of the statute, for example, with 

. Litigants are really trying to take advantage of every perceived advantage in the statue and are bringing motions and are litigating those. So, the pace of litigation is likely to be quite a bit slower in the context of the BPCIA, at least initially. Also, we see a lot more patents typically being brought to bear in and BPCIA litigation. So, the fact that Lantus is being brought along this sort of well-oiled generic drug litigation track, I think [that] in general, although the specifics will vary from case to case, I think that in general that’s going to be a faster timeline right now, than BPCIA litigation.

Robert Cerwinski, JD, partner at Goodwin, explains why Hatch-Waxman litigation may provide a smoother path than does the Biologics Price Competition and Innovation Act. 

Robert Cerwinski: Hatch-Waxman Litigation of Follow-On Insulins

Oil States Energy Services v Greene’s Energy Group

 stand to change the IPR process in general?

It’s an interesting case in that there is a petition to the Supreme Court challenging the constitutionality of [inter partes reviews, IPRs]. IPRs have been one of the main tools in the tool kit of biosimilar applicants to try to clear a path for biosimilars to market. Everybody in the biosimilars world is watching this Supreme Court matter pretty closely. The upshot is, if in fact the law that created IPRs is governed to be unconstitutional, Congress is going to have to take another shot at either modifying or redoing the statute that created IPRs. So, the potential impact on biosimilar applicants from having the IPR scheme eliminated entirely will be quite significant. I don’t think anyone really expects IPRs to go away forever, but this is one of those cases where even if folks are feeling pretty comfortable that IPRs are at least in some respect constitutional and are here to stay, there is a risk that the IPR world as we know it could change in the near term—so we are watching it closely.

Robert Cerwinski, JD, partner at Goodwin, discusses a petition before the Supreme Court challenging the constitutionality of inter partes review. 

Robert Cerwinski: Oil States and the Inter Partes Review Process

Do pharmacy schools need to change their curriculum to address biosimilars? 

The pharmacy school curriculum should adapt to the growing increase in biosimilars by adding coursework to compare and contrast small molecules versus large, complex proteins, as well as approval process and requirements for bringing biosimilars to market. On rotation, pharmacy students should encounter biosimilars and have some experience with dispensing those agents.

Brandon Shank, PharmD, MPH, BCOP, Clinical Pharmacy Specialist, discusses the need for pharmacy schools to adapt their curriculum to address biosimilar treatments.

Dr Brandon Shank: Pharmacy School Curriculum and Biosimilars

Do “Pay-to-Delay” agreements affect biosimilars in the way they affect small-molecule drugs?

The FTC hasn’t really weighed in on that, and it’s really the [Federal Trade Commission, FTC] and the Department of Justice who have been driving a lot of the activity and the activism around pay-for-delay suits. The long and short is that policy is really kind of behind the Justice Department and the FTC’s concern about pay-for-delay. The basic proposition is that: We want to make sure that access to generic drugs happens as soon as possible, so we want to police settlements to make sure that the public is not being prejudiced by private settlements between generic drug companies and branded drug companies. The same policy rationale could very well exist with biosimilars. The policy behind the [Biologics Price Competition and Innovation Act, BPCIA] is at least roughly the same as the policy behind the Hatch-Waxman laws, which is: Let’s encourage early biosimilar entry by giving a mechanism for resolving patent infringement lawsuits prior to actual marketing—let’s incentivize both sides to get this dispute out of the way early, so that biosimilars can reach the market as soon as possible. So, because the policies behind the Hatch-Waxman laws and the BPCIA are roughly aligned, we may very well see some scrutiny by the Justice Department and the FTC of such settlements.

Robert Cerwinski, JD, partner at Goodwin, discusses the potential for government agencies to weigh in on pay-for-delay settlements in the biosimilars space.

Robert Cerwinski: Pay-for-Delay Settlements and Agency Scrutiny

Will there be reimbursement challenges with biosimilar products?

I think it’s too soon right now to say, exactly. It is a very complicated payer system, and there are a lot of incentives—for the hospitals, the patients, and the insurance companies. I hope that patients will see some of the cost savings, as well as insurances, and hospitals will be incentivized, hopefully, to add these agents on to their formulary and pass on the cost savings to the entire health care system both at a payer base and a patient-care level.

Brandon Shank, PharmD, MPH, BCOP, Clinical Pharmacy Specialist, discusses the potential for reimbursement challenges with biosimilars.

Dr Brandon Shank: Reimbursement Challenges With Biosimilars

What role will patient education play in the uptake of biosimilars in oncology?

I think it is going to be very interesting. I don’t think we know yet. I think that there is a question from a physician perspective and even a patient-centric perspective of how in-depth should a physician be. If the drug is approved, if the FDA has determined the drug to be not interchangeable but equivalent, and labeled for those indications, do you need to say more than the drug name and not the modifier that would identify it as a biosimilar? And I wonder if physicians will take that extra step, only because, is it patient-centric to do so? Are you going to convey to a patient risks that may not be there just because you’re defining a difference where the difference has been deemed immaterial?

Bruce A. Feinberg, DO, CMO, Cardinal Health Specialty Solutions, discusses the importance of patient education on biosimilar treatments. 

Interviews