Magazine
How Similar Must Biosimilars Be?
Follow-on biologics are on their way
By Ed Silverman
Will there ever be a pathway for follow-on biologics?
There is actually little debate that a framework is inevitable. Congress will eventually craft some kind of bill that will make it possible for the FDA to develop a clear pathway for manufacturers. In fact, there is more than enough pending legislation: Two bills have been introduced in the House and one in the Senate, and another is expected to debut in the Senate sometime this spring.
“This is like the proverbial train moving down the tracks,” said Bob Franks, president of the HealthCare Institute of New Jersey, the trade group that represents many drug and device makers. “It will happen. It just needs to stop at a few stations along the way.”
Just the same, the issue is playing out longer than some may have expected, even though healthcare reform is such a hot-button topic now that Barack Obama has moved into the White House. Last fall, for instance, there was a growing belief that a decision on follow-on biologics might be close to taking shape by now, especially as employers and insurers increasingly lobby over the price of these medicines, more of which arrive every day in hospitals, clinics and physician offices nationwide.
Instead, Congress continues to mull over competing bills and, even though the cost of biologics is a regular fixture in debates and white papers about healthcare, a resolution could be several months away. As recently as late April, Ann Witt, the health counsel to Henry Waxman, the California Democrat who chairs the House Energy & Commerce Committee, told a seminar that the timing for passage is unclear.
“I don’t know what’s going to happen with these bills,” said Ms. Witt. “Although this is a very high priority for Mr. Waxman, there are some other high priorities right now (in the committee): mainly healthcare reform and climate change. And finding the time to get this bill through is challenging.”
There are several sticking points, including cost, timing and terminology, such as interchangeability, that have kept brand-name innovators and their generic rivals from reaching a compromise. But the key hurdle is data exclusivity, which is another way of describing the amount of time a company will be granted before a competing version of its biologic is allowed to enter the marketplace. As Mark Schoenebaum, a securities analyst at Deutsche Bank recently described it an investor note, this is “an extremely important issue” to the biopharma industry.
Although there has been some movement compared to the opening rounds of the debate during the Bush administration, both sides remain far apart. In particular, the House bill introduced by Waxman, HR 1427 – Promoting Innovation and Access to Life-Saving Medicine Act, would grant innovators five years of data exclusivity, a term the biopharma industry and its supporters argue is a non-starter.
The bill, which was introduced in March, “aims to cut prices, but instead cuts corners,” according to a statement from the Biotechnology Industry Organization (BIO), which was equally dismissive of a subsequent bill introduced in the Senate by New York’s Chuck Schumer and Ohio’s Sherrod Brown, both Democrats, along with Susan Collins, a Republican from Maine, and Florida’s Mel Martinez, another Republican.
Not surprisingly, biotechs have lined up to support a competing House bill introduced by California’s Anna Eshoo and Jay Inslee, both Democrats, and Joe Barton, a Republican from Texas. Their legislation, HR 1548 – The Pathway to Biosimilars Act, would offer 14 years of data exclusivity.
The bill “establishes parity with the outcomes of the Hatch-Waxman regime developed for traditional pharmaceuticals, balancing the need to increase access, lower costs, ensure drug safety and promote continued biomedical breakthroughs,” Jim Greenwood, president and chief executive of BIO, said at the time it was introduced in March.
Of course, the difference between five and 14 years of data exclusivity is significant and unlikely to be bridged easily, at least until someone decides to play King Solomon and take a sword to the proverbial baby. To some, this suggests that Congress will eventually settle on the model used by regulators in Europe, where 10 years of data exclusivity was granted brand-name innovators.
“I seriously doubt that we’ll see a period of data exclusivity less than what Europe is currently providing,” says John Vernon, a professor of health policy and management at the University of North Carolina at Chapel Hill. “The U.S. is the carrot that drives the R&D spending around the world. Anything less than what Europe offers would be seen as poor judgment. I also think that anything above 10 years remains possible.”
No one disputes, though, that biosimilars will offer savings. A report last summer by the Pharmaceutical Care Management Association, a trade group for pharmacy benefit managers, projected that a pathway for follow-on biologics could save Medicare Part B as much as $14 billion over the next decade. At the same time, the Congressional Budget Office forecast that an earlier version of the Senate proposal could reduce expenditures by $25 billion by 2009 and 2018. Estimates can vary, but the message is the same — the bottom-line savings can be real.
Meanwhile, there are other arguments that must be settled. For instance, when is a biologic similar, highly similar or clinically meaningful? As one can imagine, this is more than mere semantics. Huge dollars are at stake, because the definitions assigned by the FDA will, naturally, determine how physicians behave. Doctors want to know that a substitute medication is just that — a substitute, not an also-ran.
Biopharmas argue that so-called interchangeability, which refers to the extent to which a generic should be substituted for a brand-name medicine, can have serious consequences. To make their case, they point to immunogenicity, which is the production of antibodies that can can cause a biologic to be ineffective. This is reminiscent to bioequivalence between small molecule medicines and generics, which led to a debate over the need for rigorous clinical trial testing.
The biotech industry has repeatedly made clear that if a pathway is created for interchangeability, then rigorous clinical trial data should be required of any generic manufacturer. “We’d support regulation so long as there is enough clinical evidence to ensure safety,” David Lacey, Amgen’s vice president of research, said at a recent industry conference when asked about biosimilars.
As the pathway becomes inevitable, the lineup of active combatants is likely to get very interesting. With more brand-name drug makers deciding that follow-on biologics offer growth prospects for otherwise moribund balance sheets, they will also want a pathway to make and sell their own versions. Merck, for instance, recently created a new unit for this purpose and bought the follow-on biologics business from Insmed, which last year became the first U.S. company to demonstrate bioequivalence for a follow-on biologic.
This suggests that brand-name and generic drug makers could become key allies in a battle to make new versions of widely used medicines. An interesting concept, as the major innovators look to develop new sources of revenue. Just the same, it will take a few months — if not longer — until the landscape is sorted out.
