State Laws and Biosimilar Substitution

Amanda Forys, MSPH: Let’s talk about the state level. A majority of states—I think we’re up to 33 now—have enacted laws concerning the substitution of biosimilars for reference products. I know that state pharmacy boards and states work together and put laws out all the time. How do these laws differ from what you traditionally see? Have they gone above and beyond? Are they doing what you’re hoping they’re going to do for biosimilar products?

Molly Burich, MS: After the Affordable Care Act was passed and we had a biosimilar pathway, there was the realization that we had 50 state laws plus a couple of territories that we had to update to actually allow for substitution.

Angus Worthing, MD, FACR, FACP: And the District of Columbia.

Molly Burich, MS: Yes, and the District of Columbia. When you pass a federal law, you think, this is great. The FDA is going to approve biosimilars, and patients are going to get them. The reality is, pharmacy laws reside within the state. And so, we have seen to date, as you mentioned, that the majority of states now have laws. But, we had to do the same thing back in the 1980s over Hatch Waxman. So, there is this idea that we implement these laws that essentially allow for the automatic substitution of interchangeable biosimilars. I think that’s an important distinction. As we talked about regarding interchangeability earlier, we are building substitution laws based on that additional layer of designation from the FDA and study by the manufacturer.

You’ve seen different challenges in states. The physician notification piece has probably been the most controversial and the biggest sticking point in terms of how soon after a substitution you are required to communicate that back to the physician. The physician knows which product they have. The patient notification happens when the patient gets the product, but the physician piece is the sticking point. You’ve seen some states implement as soon as 24 hours, and you’ve seen other states be more in the 3-to-5-day range.

The truth is, it’s quicker than small molecule generics. I think that speaks to the complexity of these products, but I think we have a little ways to go in terms of getting all the states to update them. I think that with some of the uniformity issues, as time moves on and we see interchangeable products, we could see a situation where, from a pharmacy perspective, maybe the 24-hour notification is too quick— and maybe, from the physician perspective, 5 days is too long? We will see. We’ll have some lessons on what the right thing is, and we’ll probably need to go back and revisit some of them. The most important thing is to make sure that no matter where a patient lives, they are able to get an interchangeable biosimilar substituted if that’s the appropriate choice for them. It’s an important topic. It may be a little bit of a weedy topic—when you think about biosimilars—but it is very critical.

Angus Worthing, MD, FACR, FACP: I agree. Notification is the big piece in the state substitution laws. The American College of Rheumatology really wants the patient and the doctor to be as closely involved as possible at that moment, when somebody is moving from a reference product to a biosimilar. From the position of the American College of Rheumatology, the doctor should write the prescription when they’re changing to a biosimilar. However, in states where it’s legal for a pharmacist to substitute a biosimilar, the American College of Rheumatology—and I think a lot of doctors—want to know right away that the substitution has been made. The reason is, we’re treating complex diseases and we’re using complex drugs. Patients might be giving themselves a shot of one of these drugs every week or even twice a week. The number of days makes a difference if somebody is taking a drug every 3 or 4 days. When a doctor finds out only a week later, that’s too long. But 5 days might be short enough.

Amanda Forys, MSPH: Are any states popping out as interesting case studies on biosimilars?

Ha Kung Wong, JD: I would say 1 thing, and this is not really in my area as IP but is actually in the area of cost. We notice that some states—Colorado, Georgia, Illinois, North Carolina, and Texas—are requiring that the interchangeable biosimilar must have the lowest cost. I think it’s a little tricky. As we saw in the Orange Book space, Hatch-Waxman space, and small molecule space, is it really lowest up-front cost or lowest net cost? Or what are we really talking about? You have rebates. You have discounts. You have things that don’t appear up front. It can make it really tricky, unless they want to get into a real economic analysis as to what lowest cost means. I don’t know if anybody has any thoughts on that?

Angus Worthing, MD, FACR, FACP: Well, I wonder if you think that will increase the amount of transparency in those states? What do you think, Ha Kung?

Ha Kung Wong, JD: It’s unclear to me if it will. To some extent, I think that it will require people to say something about it, but how they actually characterize lowest cost is a tough thing to do. I’m not an economist, but I’m sure most economists can call something that’s $10 more “lower cost” in some way. It’s a tough thing, so I think, yes, perhaps there can be some more transparency, but I think it leaves a lot of room for a lot of ambiguity.

Molly Burich, MS: You raise an interesting point. I’ve had the pleasure of working on some of the language and the specificity, and I think the question around “lower cost to whom” is a critical one—in the broad drug-pricing debate but, certainly, in these bills. I think it’s typically to the patient. So, what is their actual cost share, and how does it ring up at the pharmacy level? That type of language may end up being something that, in hindsight, works really well—to ensure that the patient, based on their benefit design and plan, really is getting the lowest out-of-pocket cost for them. It could also be that we see that it’s something that was written in with really good intentions, but it’s actually very difficult to execute. Right now, we’re a little bit in the unknown. We don’t have any interchangeable products yet. But, I do think that’s an important question and is potentially one of those areas where we make laws for what we know now. They don’t always reflect what the market actually looks like.