October 28, 2019 PAP-Q3-19-CL-015
Given biologics’ complexity, the global scientific community has rightfully questioned its collective understanding of these therapeutics. Could the industry really develop and manufacture therapeutics that would behave similarly and have the same — or at least similar — clinical outcomes as an innovator biologic? Were biosimilars interchangeable with innovator drugs? These questions were warranted, and the world pushed forward to address them. Most global markets achieved confidence in their biosimilars review and approval processes. Additionally, most nations concluded that their people were better served by having access to lifesaving medications rather than waiting until every question was answered fully.
The United States trailed the EU and other nations in implementing legislative and regulatory constructs to support its biosimilars market. The EU was the first to release biosimilar guidelines, in 2005. The biosimilars market was legislatively created in the United States by the signing of the Biologics Price Competition and Innovation Act (BPCIA), part of the Affordable Care Act, in March 2010. However, the U.S. Food and Drug Administration (FDA) did not release its first biosimilars draft guidance until 2012.
The commercial U.S. biosimilars drug market was effectively established in 2015 with the approval of Sandoz’s Zarxio®, which quickly established itself by constituting approximately 45% of the short-acting filgrastim prescribed in the United States. Despite this success, the United States again lagged behind the EU, which had launched its first biosimilar in 2006 — a full nine years earlier.
After the approval of Zarxio in 2015, FDA biosimilar approval rates began to accelerate. As of July 2019, 21 biosimilars have been approved by the FDA, and the approval rate has been rising. However, only six of these approvals have been brought to market — the remaining products have been held up in IP-related litigation. Contrast this with the 40+ biosimilars actively on the market within the EU, not to mention the markets of numerous other nations.
In countries dedicated to providing healthcare services to all citizens, the fiscal relief offered by biosimilars is quite welcome. However, by following the money in the U.S. healthcare market, one is not surprised to learn that the overwhelming energy has been directed toward slowing the development of the market, rather than accelerating it. Slowly but surely, however, the tide is turning, and here are some reasons why.
Similar to the patent cliff small molecule drug manufacturers endured years ago, biopharmaceutical manufacturers are in the midst of their own patent cliff. By 2020, more than $67 billion in biological patents will expire, including patents for blockbuster biologics like Lantus® and Avastin®. Expiring patents, of course, present opportunities for biosimilar development.
The lack of FDA interchangeability guidance slowed biosimilar adoption, because pharmacists cannot substitute a biosimilar without interchangeability status. However, the FDA released a highly anticipated guidance, “Considerations in Demonstrating Interchangeability with a Reference Product,” in May 2019, which offers a path to achieving interchangeability status.
In June 2017, the U.S. Supreme Court settled Amgen v. Sandoz, determining that biosimilar applicants are not required to participate in the patent dispute resolution procedures (also known as the “Patent Dance”) outlined in the BPCIA. Additionally, a biosimilar applicant may provide 180-day notice of commercial marketing before the biosimilar product is licensed, thereby not affecting its commercial launch.
While some legal questions were clarified by Amgen v. Sandoz, and numerous other cases are making their way through the courts, biosimilar developers are becoming more comfortable with the rigorous legislative landscape before them.
This said, there is no shortage of opportunity for innovators to continue to slow the pace of biosimilar commercialization.
While the current legislative environment in the United States is far from predictable, there increasingly appears to be the desire on both sides of the aisle to tackle drug pricing questions.
Is the U.S. biosimilars market really poised for takeoff? The signs are positive, but it is truly the legal and legislative arena that will determine the market’s fate.
With over 25 years of experience, Haig has accumulated a wealth of knowledge and experience in global business leadership and strategic facilitation and planning. Over the last 15 years, Haig has built Haig Barrett into a leading consulting firm with clients ranging from chemicals, automotive, energy, pharmaceutical and biotech sectors. Prior to founding Haig Barrett, Haig has led divisions for leading global Fortune 50 corporations including Rio Tinto. Haig graduated with a B.Sc. Honors in chemical engineering from Surrey University, England.