Q&A with Elaine Herrmann Blais, JD, and Alexandra Lu, JD

Pharmacy Purchasing & Products: What is the current status of biosimilar approvals and will they set a legal precedent for subsequent approvals?
Elaine Herrmann Blais & Alexandra Lu: By way of background, the Biologics Price Competition and Innovation Act (BPCIA) was signed into law as part of the Affordable Care Act (ACA) on March 23, 2010, and is codified principally at 42 U.S.C.§262. Section 262(k) of the ACA; the BPCIA created an abbreviated licensure pathway for biological products that are shown to be biosimilar to, or interchangeable with, a reference product that has been licensed by the FDA. This abbreviated 262(k) pathway permits a biosimilar product to be licensed on less than the full complement of preclinical and clinical test data typically required by the FDA for approval of a new biologic product.

Beyond the general requirements for showing biosimilarity to, or interchangeability with, a reference product, no clear challenges are yet apparent in the FDA approval process (see SIDEBAR). Determining how applicants can prove biosimilarity and interchangeability has been left to FDA’s discretion; regardless, the requirements will likely vary among products and are apt to change as the science develops.

On March 6, 2015, FDA approved the first biosimilar product in the US—Sandoz’s Zarxio (filgrastim-sndz), which referenced Amgen’s Neupogen product. This occurred 8 months after the FDA first accepted Sandoz’s biosimilar application. Four other biosimilar applications have been accepted by FDA and remain in regulatory review, and other FDA activity suggests more products may be coming down the pipeline. As of April 30, 2014, FDA has:

• Received 67 requests for an initial meeting to discuss biosimilar development programs for 14 different reference products;
• Held 55 initial meetings with sponsors interested in developing biosimilar products; and
• Received 22 investigational new drug (IND) applications, which are required for sponsors planning to perform clinical testing of a biologic in the US.

PP&P: What are the expectations for biosimilar approval timelines?
Blais & Lu: At this early stage, it appears reasonable to assume a timeline of 8 to 10 months from FDA acceptance to approval of a successful biosimilar application. The FDA’s Performance Goals set out a plan for the agency to review and act on the majority (80% as of FY2015, increasing to 90% by FY2017) of original biosimilar applications within 10 months of receipt.¹ FDA’s published goals also include plans for timely responses and notifications to the applicant regarding any substantive issues that FDA identifies upon initial review of an application.

Based on the timeline of the sole biosimilar product to have obtained approval under the 262(k) pathway, it appears that FDA may stick to its projected timeline goals—the agency accepted Sandoz’s filgrastim biosimilar application on July 7, 2014; on January 7, 2015, FDA’s Oncologic Drugs Advisory Committee unanimously recommended approval of Sandoz’s biosimilar product for all five indications for which the reference product, Neupogen, is approved. FDA ultimately approved Sandoz’s biosimilar application this past March.

Regardless, it should be noted that the timeline set by this first product might not apply to other biosimilar applications. Biosimilarity is determined on a case-by-case basis, and FDA has substantial flexibility in determining the particular approval standards that will apply to a given application. 

PP&P: What types of financial projections can be made for biosimilar budgeting?
Blais & Lu: Financial projections for the biosimilars market are difficult to make due to the interplay of two factors:

1. Biosimilars generally are more expensive to develop than traditional, small-molecule drugs; and
2. Biosimilars generally are not automatically substitutable for reference product prescriptions at the pharmacy level.

This combination signals higher costs for the biosimilar sponsor at both the development and marketing stages. The paradox is that the lack of automatic substitution requires greater education and marketing efforts to promote an approved biosimilar product as a potentially lower-cost alternative to reference products. Thus, unlike generic small molecule drugs—which are less costly to develop and may be priced at reductions of 30% to 80% of pre-generic, branded drug prices, and which can be expected to take over (cumulatively, between available generics) 70% or more of the market for branded small molecule drugs—biosimilar sponsors must set pricing levels that account for both higher development costs and higher post-approval marketing costs.

As a parallel, in the EU, biosimilar product developers have struggled to accrue market share. Given the high costs of development, marketing, and education, they have been unable to reach prices low enough to prevent price matching from reference product manufacturers. (Biosimilars in the EU typically have been priced at reductions of only 15% to 30% of the branded biologic products.) For example, although five biosimilars to EPO (Eprex) were approved in the EU in 2007, discounting amounted to only 20% (prices likely to be pursued by the reference product maker). Indeed, average market share for biosimilars in 2011 was only 11% in the EU.²

The nascent example of Sandoz’s biosimilar filgrastim product approval in the US also may shed some limited light on the types of financial projections that might apply in the US. Sandoz launched its biosimilar filgrastim product, Zarxio, on September 3rd, 2015, at a 15% discount to Amgen’s Neupogen product.  Whether other biosimilars will follow this pricing model remains to be seen.

PP&P: How is the BPCIA process expected to mirror the European experience and how is it likely to differ?
Blais & Lu: The high development costs and lack of automatic substitution for biosimilar products are the most apparent similarities. Biosimilar products under both authorities generally will require higher development costs and post-approval marketing and education costs. However, there is one significant difference under the BPCIA process that may alter the storyline in the US: Under the 262(k) pathway, a biosimilar product may obtain interchangeability status, which creates the potential for automatic substitution of the biosimilar for reference product prescriptions in those states that have adopted the requisite automatic substitution laws. No such status is available in the EU. The absence of such a regulatory pathway requires biosimilar sponsors to convince EU doctors, through marketing and educational programs, that their products are biosimilar alternatives to established branded biologics.

In terms of how regulatory authorities will determine biosimilarity in the US, the BPCIA process can be expected to largely mirror the European experience. FDA has indicated that it expects to adopt a similar approach to that taken by the European Medicines Agency (EMA), which has released guidance documents for certain types of biologic products. FDA and the EMA also have been working together on a common data package that will allow biosimilar sponsors to use the same data in their applications in both the US and the EU. Moreover, in the FDA briefing document for the January 7, 2015 meeting of FDA’s Oncologic Drugs Advisory Committee regarding Sandoz’s filgrastim biosimilar application, FDA allowed Sandoz to rely on preclinical and clinical biosimilarity test data based on the EU-approved Neupogen to establish an acceptable analytical bridge to the US-licensed Neupogen reference product.

PP&P: What issues will impact the uptake rate for biosimilars?
Blais & Lu: Here again, the possibility of automatic substitution laws and the success of marketing and educational efforts by biosimilar sponsors will play determining roles. Different state requirements for automatic substitution may facilitate or hinder the uptake rate for biosimilars, whereas physician reluctance to accept biosimilar products as truly biosimilar or interchangeable with branded biologics also may impede uptake rates.


On the other hand, increased national spending on biologics in the US (15% to 20% annual increases in recent years³), and increasing reluctance by government and private third-party payers to pay for expensive branded biologic treatments, suggest that market demand in the US may present fertile ground for strong biosimilars uptake.

PP&P: What biosimilar applications are currently with the FDA and what are their projected timelines for rulings?
Blais & Lu: Currently, there are four biosimilar applications under FDA review:

• Celltrion’s Remsima product (referencing Remicade/infliximab)
• Apotex’s pegfilgrastim product (referencing Neulasta/pegfilgrastim)
• Apotex’s Grastofil product (referencing Neupogen/filgrastim)
• Sandoz’s etanercept product (referencing Enbrel/etanercept)

While there are no established timelines for FDA action on these applications, it is reasonable to expect that the agency may complete its review within the next 8 to 10 months.

PP&P: How will litigation following applications or approvals under the BPCIA pathway impact the market?
Blais & Lu: The potential for litigation regarding the BPCIA pathway remains high. Although the scope and timing of patent litigation regarding biosimilars remains to be seen, it will likely vary depending on the particular circumstances and strategic decisions of both the 262(k) applicant and the reference product sponsor.

So far, most of the early litigation concerning the BPCIA has focused on its patent dispute resolution provisions. Commonly referred to as the patent dance, the BPCIA provisions lay out a schedule of timed steps according to which each party—the biosimilar applicant and the reference product sponsor—exchange certain information and respond to each other’s contentions about potential patent disputes. In the first of these cases to reach a judicial interpretation of the provisions, Amgen v. Sandoz, Judge Seeborg of the Northern District of California held that the BPCIA provisions are not mandatory; a biosimilar applicant can choose the level of patent certainty it wants to obtain before it launches its product, by either participating in the dance to narrow and delay the scope of litigation, or else declining to dance, and opting instead to face immediate action for infringement on a broader, non-predetermined series of patents.⁴ The district court also ruled that Sandoz did not have to wait for its biosimilar product to be licensed by FDA before providing its 180-day notice of commercial marketing under the BPCIA.  

On appeal, the Federal Circuit held, in a split opinion, that the patent dance is not mandatory, that the 180-day notice of commercial marketing can be given only after FDA approval, and that if a biosimilar applicant opts out of the dance entirely, as Sandoz did in this case, the 180-day notice of commercial marketing is mandatory. Both parties filed petitions for rehearing, which the Federal Circuit recently denied, meaning that the Federal Circuit’s July split opinion now will be implemented as the standing authoritative interpretation of the BPCIA.

That July opinion left some questions unanswered, however.  In particular, parties in two other pending cases (Janssen v. Celltrion, in the District of Massachusetts, and Amgen v. Hospira, in the District of Delaware) are litigating the question of whether a biosimilar applicant that engages in at least part of the patent dance is required to provide notice of commercial marketing at all under the BPCIA and the Federal Circuit’s opinion.

Such litigation may have an impact on the biosimilars market by creating uncertainty about biosimilar product launches. Depending on how these issues play out, biosimilar product manufacturers may have to delay commercial launch until 180 days after FDA licensure (as Sandoz was forced to do as a result of the Federal Circuit’s ruling), or may be able to launch—with possibly varying degrees of certainty in their legal ability to do so—without giving notice of commercial marketing to the reference product sponsor.

PP&P: What can we expect to see at the state level as the substitution issue is debated in state legislatures?
Blais & Lu: Since 2013, at least 23 states have considered substitution laws, and eight states have enacted such laws. Among the enacted laws, common provisions include a requirement of FDA certification of interchangeability status before a pharmacist may substitute the biosimilar drug, the possibility for a prescribing physician to prohibit substitution, a requirement that pharmacists notify prescribing physicians and patients of any substitution, record-keeping requirements for substitution, and requirements for the state Board of Pharmacy to maintain a list of interchangeable biosimilar products. As always, it is wise to remain abreast of your state’s laws and regulations regarding the use of biologic therapies.

Elaine Herrmann Blais, JD, is a partner in Goodwin Procter’s intellectual property litigation practice and chair of litigation for the firm’s Boston office. She joined Goodwin Procter in 2001 and is currently a member of the firm’s hiring committee and partner integration committee. Elaine received her JD from The Ohio State University College of Law.

Alexandra Lu, JD, is an associate in Goodwin Procter’s litigation department. She received her JD from Yale Law School.

 
Ms. Herrmann Blais and Ms. Lu are co-founders of Big Molecule Watch (www.bigmoleculewatch.com), a blog covering developments in the biosimilars industry.

References

1. The US Federal Food and Drug Administration. Biosimilar Biological Product Authorization Performance Goals and Procedures, Fiscal Years 2013 through 2017. http://www.fda.gov/downloads/Drugs/DevelopmentApprovalProccess
   /%20HowDrugsareDevelopedandApproved/ApprovalApplications
   /TherapeuticBiologicApplications/Biosimilars/UCM281991.pdf. Accessed October 30 2015.
2. Goodwin Procter's Biosimilars: A Guide to Regulatory and Intellectual Property Issues includes greater detail on the EU experience and other matters related to the biosimilar industry. For more information, visit: www.goodwinprocter.com/News/Press-Releases/2015/1_12_2015-Goodwin-Procter-Publishes-Guidebook-On-Biosimilars-Regulatory-IP-Issues.aspx
3. Aitken M, Berndt ER, Cutler DM. Prescription Drug Spending Trends In The United States: Looking Beyond The Turning Point. www.HealthAffairs.org. http://content.healthaffairs.org/content/28/1/w151.full Accessed October 30 2015.
4. The March 19, 2015, Order denied Amgen's motion for a preliminary injunction of Sandoz's product launch and rejected Amgen's interpretations of the BPCIA dispute resolution provisions. The Order, and the argments leading up to the order, are covered in greater detail in Goodwin Procter's Client Alert: Order in Amgen v. Sandoz Provides First Judicial Interpretations of the BPCIA Patent Dispute Resolution Provisions. http://www.goodwinprocter.com/Publications/Newsletters/Client-Alert/2015/03_20-Order-in-Amgen-v-Sandoz-Provides-First-Judicial-Interpretations.aspx?article=1 and in Goodwin Procter's webinar on The Impact of Amgen v. Sandoz. http://www.goodwinprocter.com/Events/Webcast-Library/2015/The-Impact-of-Amgen-v-Sandoz.aspx.

SIDEBAR
Biosimilarity and Interchangeability
To be deemed biosimilar to a reference product, the 262(k) product must be shown to be “highly similar to the reference product notwithstanding minor differences in clinically inactive components,” and there must be “no clinically meaningful differences between the biological product and the reference product in terms of the safety, purity, and potency of the product.”
[42 U.S.C. § 262(i)(2)].

To be approved as a product that is interchangeable with a reference product requires a higher threshold; the 262(k) applicant must show that its product can be expected to have the same clinical result as the reference product in any given patient, and that switching or alternating between reference and biosimilar products does not increase risks to patients in terms of safety or diminished efficacy.
[42 U.S.C. § 262(k)(4)].