The Importance of Tracking State Biosimilar Substitution Laws Across the US

State lawmakers are pushing legislation to advance automatic biosimilar substitution at a rapid pace across the nation—33 states and Puerto Rico have already taken action, and 8 more states have bills pending, according to Stephanie Hoops, a market analyst at Decision Resources Group (DRG). Hoops notes that although the FDA controls the approval of biosimilars and their interchangeability designations, achieving interchangeable status—demonstrating that a biosimilar may be substituted for its reference biologic under the FDA’s rules—is only one facet of the process of attaining product substitution, because state legislatures exert control via legislation.

In Hoops’ opinion piece, which appears in the June 22, 2017, issue of Life Science Leader, she advocates for the importance of keeping an eye on state laws addressing biosimilar substitution. “In laws enacted thus far, sunset clauses, errors, and omissions have appeared,” she notes. “Add to that the dissimilar requirements observed from state to state, and it becomes clear that it’s imperative to keep abreast of legislative activity.” DRG’s research shows that most states have enacted biosimilar interchangeability laws, but a third (17 states) have not (Alabama, Alaska, Arkansas, Connecticut, Kansas, Maine, Maryland, Michigan, Mississippi, New Hampshire, New York, Oklahoma, South Dakota, Vermont, West Virginia, Wisconsin, and Wyoming). Among that group, 8 states have a substitution law pending (Alabama, Alaska, Arkansas, Connecticut, Kansas, Michigan, New York, and Vermont).

Most of the existing legislation deters automatic substitution and protects the physician-patient relationship by ensuring transparency and communication. State laws typically include 5 principles endorsed by the Biotechnology Innovation Organization (BIO), a biotechnology industry trade group, which BIO considers essential for overcoming challenges specifically faced by biologics:

1. Substitution should occur only when the product has the FDA’s interchangeable designation
2. Prescribing physicians should be able to prevent substitution
3. Prescribing physicians should be notified of substitution
4. The patient should be notified of substitution
5. The pharmacist and the physician should keep records of substitution

Most states have enacted laws that incorporate all 5 BIO principles, DRG found, but laws across the nation are far from uniform. For example, Massachusetts enacted a bill in 2014 that aligns with all 5 principles—which makes sense given the state’s high prescription drug volume due to a high concentration of commercially insured residents, a low rate of uninsured residents, and expanded Medicaid eligibility. However, laws in Georgia, Idaho, Kentucky, Montana, Nevada, New Jersey, and North Carolina do not require pharmacists to notify patients of substitutions. Florida does not even require that prescribers be notified when their prescriptions are changed.

Virginia limits biosimilar substitution by requiring pharmacists to notify prescribers of any substitutions and to provide patients with retail cost information for the prescribed biologic and the interchangeable biosimilar. But the state’s provider notification provision expired in 2015, and it is not yet known whether it will be reinstated.

Washington State, which Hoops calls a “tough regulatory environment for industry,” has prescriber and patient notification, but given the opposition voiced in public comments, that policy might not last. The state already requires pharmacists to automatically substitute biosimilars if the substituted product has a lower wholesale price than the reference product, the prescriber has not prohibited substitution, and the patient does not request the reference product. If a pharmacist is filling a prescription for a patient in a state-purchased healthcare program, the pharmacist must substitute a preferred drug in place of a nonpreferred drug within a therapeutic class.

Hoops notes that there are errors in some state biosimilar substitution laws; for example, some laws refer to the Orange Book when in fact it is the Purple Book that the FDA uses to list biological products, including biosimilars and interchangeable biological products the agency licenses. (The Orange Book is a resource for FDA-approved small-molecule generics.) In addition, most state laws cover retail pharmacist dispensing of biosimilar products instead of provider-administered biological products—the products affected by these initial rounds of FDA-reviewed biosimilars. Thus, the state laws do not require patient notification in office-treatment settings when prescribers are performing the substitutions themselves.

The laws so far enacted by the states show that legislators acknowledge that biologics require a different treatment than traditional small-molecule generics. The laws need some adjustment, says Hoops, to correct oversights and mistakes as more biosimilars enter the market. But the bottom line is that the industry must continue to work toward safeguarding the physician-patient relationship and to protect against inappropriate use of biosimilar substitutes.

Patrick Plues, BIO’s vice president of state government affairs, believes the 17 states that have not yet enacted biosimilar substitution laws ultimately will do so, and the organization is pleased with the progress made at the state level. “These bills will actually bring down prescription drug costs by giving patients easier access to these lower-cost biologic medicines,” he said.