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Trends in biosimilars

October 2018  |  ROUNDTABLE  |  SECTOR ANALYSIS

Financier Worldwide Magazine

October 2018 Issue


Already a multi-billion dollar market, biosimilar products are set to become even more prevalent as brand-name medicines progressively lose their grip on exclusivity rights and patent protection. Indeed, newer companies are spending vast amounts of time and resources manufacturing almost identical copies of original pharmaceutical drugs in a bid to facilitate market entry. And while there is some uncertainty as to how ‘similarity’ is assessed by regulatory bodies, with applicants and approvals on the rise, the biosimilars market seems set to continue its march toward interchangeablity.

FW: Could you provide an overview of what you consider to be some of the main trends and developments to have emerged in the biosimilars space over the past 12 to 18 months?

Herrmann: Many events observed during the last year aim at accelerating the development and marketing of biosimilars. We have seen, for example, that companies are shortening the overall clinical development timelines by using staggered phase I/III approaches, rather than choosing the classical sequential approach in countries where this is accepted by regulatory bodies. With the Supreme Court’s decision of the ‘patent dance’ being optional, launching biosimilars on risk while patent litigations are still pending is another strategy that shortens the time to market. Simultaneously, we also see a clear trend on the opposite side as originator companies are starting to protect themselves against biosimilar competition by introducing innovation into their products, such as improved formulations and medical devices.

Harston: One important trend in the biosimilars space has been accelerating growth in the number of approvals and applicants. In the US, eight biosimilars have been approved in the past 16 months, versus 12 total biosimilars approved since enactment of the BPCIA in 2009. The European Medicines Agency (EMA) has approved at least 23 biologics since the start of 2017, which is about half of the total number approved since establishment of the biosimilar regulatory framework in 2005. Both well-established pharmaceutical companies, such as Pfizer, Amgen and Allergan, and relatively newer companies, such as Sandoz, Biocon, Celltrion and Samsung, are fuelling exponential growth in the biosimilars space. Another trend to watch will be label amendments by reference product sponsors that effectively extend patent protection terms.

Bordner: One of the more potentially impactful, if not ambitious, recent events in biosimilars was the publication of the Food and Drug Administration’s (FDA) ‘Biosimilars Action Plan’ in July 2018. Shortly after the plan went public, FDA commissioner Scott Gottlieb delivered a speech at the Brookings Institution. Predictably, the tone of the commissioner’s remarks was decidedly pro-development and pro-competition, focusing on initiatives to reduce healthcare costs by spurring biosimilar competition and development in a “virtuous cycle of innovation and competition”. The commissioner also noted the paucity of competition in the field, despite the number of approved biosimilars.

Yen: Much has happened over the last 18 months with respect to US litigation-related attempts at biosimilar market entry. The Supreme Court’s landmark decision last year in Sandoz v. Amgen ruled that biosimilar applicants can effectively opt out of the ‘patent dance’ procedures under the Biologics Price Competition and Innovation Act (BPCIA) – the US law governing biosimilars – by refusing to provide early access to their abbreviated applications or manufacturing information, adding strategic complexity to US biosimilars patent litigations. The Court also ruled that biosimilar applicants can give the required 180‑day notice of commercial marketing even long before FDA approval – effectively granting biosimilars applicants the ability to market their products immediately after FDA approval, unless otherwise barred by judicial relief granted in patent litigation.

Loh: From a regulatory and legal perspective, two important trends we have seen over the last year are the ongoing uncertainty at the FDA over how to assess ‘similarity’ and ‘interchangeability’ – with the FDA having recently withdrawn its 2017 draft guidance on statistical approaches for evaluating ‘similarity’ – as well as an increase in the number of inter partes reviews (IPRs) filed against patents for biologic reference products.

Jadeja: There have been many significant and exciting legal, regulatory and commercial developments in the biosimilars space, as the healthcare industry embraces the potential benefits biosimilars can bring to meeting patient needs. Overall, these developments will smooth the way for continued growth in the biosimilars market. The number of biosimilars having an impact on the market is increasing and legal, regulatory and pricing systems are evolving both in recognition of the potential benefits and value biosimilars bring and in response to increasing competition and a critical review and testing of the systems by all players in the market. Significantly, 2017 saw 16 biosimilars receive marketing approval in Europe and five biosimilars receive marketing approval in the US. 2018 will see many watching the evolving market with news of a number of key biosimilar launches.

Gallagher: Over the past 12 to 18 months, we have seen an increasing rate of biosimilar applications being filed and FDA approvals of biosimilar products. While we expect that trend to continue, FDA approvals of biosimilars has not yet equated with commercial availability or market uptake of biosimilars in the US. Both the FDA and the Federal Trade Commission (FTC) have expressed concern that biosimilar approvals have not led to market availability and price competition for biologic medications. While there are many factors from various aspects of the healthcare industry that will impact growth of the biosimilars market as it matures in the US over the next few years, two influencers that will unquestionably play a key role in the growth of biosimilars will be prescribers, as they become more comfortable and familiar with biosimilars, and payors, as the pricing and formulary structure for biosimilars develops.

Global sales of biosimilars are already expected to reach $100bn in 2025. However, the situation in the US is a bit different as of today.
— Andreas Herrmann

FW: What does the increase in US Food and Drug Administration (FDA)-approved biosimilars tell us about the health of the industry?

Bordner: The number of biosimilar products enrolled in development programmes has steadily increased since the programme’s inception in December of 2012. During this time span, progress has been made on many fronts. The FDA has issued numerous guidance documents and there have been advances in analytical techniques for evaluating biologics. Additionally, US courts have favourably interpreted, for the biologics industry, key provisions of the BPCIA. Most importantly, prescribers appear to be growing more comfortable with biosimilars. In sum, the biosimilar development pathway has successfully expanded patient access to important biologics by bringing a small first generation of biosimilar products to patients at modest cost reductions.

Yen: In the case of biosimilars, government and lawmakers were out in front of industry. Approved in 2010, the BPCIA remained largely dormant until around 2016. Now, however, the biosimilars industry is getting its legs, along with the FDA. Filings are steadily increasing, and it is apparent that more and more companies are investing in biosimilars – including companies that are not regular players in the pharmaceutical space. Companies traditionally on the ‘brand’ side for small molecule products under the Hatch-Waxman regime have expanded into the biosimilar space as well. So far, the FDA has approved 12 biosimilars – eight between 2017 and this year – but only three products are on the US market, with the rest making their way through patent litigation or on the sidelines following out-of-court settlements.

Loh: The recent uptick in FDA approvals demonstrates that the potential for growth in the US is strong. The US biosimilar market, however, still remains considerably smaller than the biosimilar market in the EU, so I expect that the US will spend the next few years playing ‘catch up’.

Jadeja: Biosimilars are here to stay, and in the US, as has been seen in Europe, will continue to have an increasingly significant role in the complex picture of healthcare provision, especially if the regulatory regime can continue to adapt and develop progressive, scientifically sound approaches and initiatives. We are not yet seeing the increase in the number of approved biosimilars translate into an increase in access to, or uptake of, all these biosimilars. The landscape is complex and many factors play a role. As well as the role of the regulatory system, other factors include disputes around patents protecting the original innovation.

Gallagher: The industry is strong and ripe for growth. Companies are looking for opportunities to develop products that can differentiate themselves in the market, and help differentiate the company’s overall product portfolio. As more clarity comes to the regulatory pathway for biosimilars in the US, more companies will be open to taking advantage of those opportunities. The trailblazers have established a pathway to approval for biosimilar products in the US, and there will be more to follow. Additionally, the increase in FDA approvals signifies the strength of the biosimilars industry globally.

Harston: The current commissioner of the FDA, Scott Gottlieb, has been pushing speedier approvals in a bid to lower drug prices. The increase in approvals over the past few years will encourage more pharmaceutical manufacturers to develop and apply to market drug products, including both innovator and biosimilar products. Accordingly, the pharmaceutical industry in general, including the biosimilar industry, remains healthy, and a looser regulatory environment spurs investment toward newly approved products by both reference product sponsors and biosimilar manufacturers. Although a majority of approved biosimilars have yet to launch in the US, approvals of such products are likely to lead to additional approvals, similar to the European market where, for example, nine filgrastim and seven adalimumab biosimilars have been approved.

Herrmann: The biosimilar industry, especially in highly regulated countries, is on track. The regulatory expectations and pathways are clear, most big pharmaceutical players have stepped into biosimilar development, first products entered the market in Europe 10 years ago and the annual growth rate is outperforming all other pharmaceutical sectors by far. Between 2015 and 2030, a total of 46 biological compounds with expected annual revenues of more than $145bn will lose patent protection and data exclusivity. Global sales of biosimilars are already expected to reach $100bn in 2025. However, the situation in the US is a bit different as of today. Although the FDA biosimilar approval rate increased in 2017, the total number of biosimilars approved that year, which was five, is still lagging massively behind the EU, with the approval of 11 different biosimilars.

The increase in approvals over the past few years will encourage more pharmaceutical manufacturers to develop and apply to market drug products, including both innovator and biosimilar products.
— Aydin H. Harston

FW: What impact do you expect recent legislation, such as the US Biosimilar User Fee Act (BSUFA), will have on the biosimilars industry?

Yen: Recent legislation that relates to user fees charged by biosimilar manufacturers is not likely to deter companies from investing in, and seeking approval for, biosimilars. When BSUFA legislation first passed in 2012 (BSUFA I), industry responded positively, because along with the high price tag of user fees came some certainty regarding how long applicants would wait to get a biologics licence. By 2017, the FDA had largely met its goal of licensing applications in around 10 months from filing. Recent BSUFA legislation (BSUFA II) increased fees charged, by around 25 percent, while extending the FDA’s time to licence biosimilar applications to 12 months from the FDA accepting the application, and providing a new review model designed to limit the number of review cycles for the FDA to approve a biosimilar product.

Loh: The BSUFA is intended primarily to help accelerate the pace of abbreviated biologics licence applications (aBLAs). At present, the FDA appears to be meeting its goal of expeditiously issuing approvals for aBLAs. As the number of aBLA submissions rises and imposes greater burdens on the FDA, the benefits of BSUFA will become more apparent.

Gallagher: At this point, the most significant impact in terms of policy for biosimilars in the US is likely to be coming from the FDA rather than from Congress. User fees are a part of doing business in the US for pharmaceutical companies, whether small molecules, generic products, biologics or biosimilars, and BSUFA was expected. In July 2018, the FDA published its ‘Biosimilars Action Plan’ outlining its initiatives to improve biosimilar competition and market availability. On 4 September 2018, the FDA held a public hearing to get stakeholder input on the initiatives in the Biosimilar Action Plan. As evidenced by the robust discussion at that meeting, policy and guidance developed by the FDA in areas relating to interchangeability, naming, information in the Purple Book, study design, and data analysis and collection, would have a significant impact on the industry.

Jadeja: The BSFUA was introduced with similar objectives in mind to the Hatch-Waxman amendments for generics. That is, to provide an abbreviated statutory pathway to approve biosimilars, thereby supporting market competition, while continuing to encourage innovation. Twelve biosimilars have now been approved under the BSFUA – so it is undoubtedly having some traction in the availability of biosimilars. However, the BSFUA is just the framework for driving availability of, and access to, biosimilars.

Herrmann: BSUFA launched in 2012 and was reauthorised in 2017. BSUFA II was put in place to collect fees from biosimilar companies to support the assessment of biosimilar programmes and their approval. The ultimate goal is to bring competition into the market place and help patients to get access to biosimilars. With the new five-year financial plans launched in 2017, the FDA has slightly adjusted downwards its review times based on a carry-over from previous years, but commits to hire more people to be able to cover the growing demand from industry. However, it remains unclear whether the 27 percent increase in personal costs over the next two years is enough to guarantee sufficient support for meetings and in-time approvals, if the number of applications is rising as fast as in 2017 – 12 applications compared to 10 within a four-year period previously.

Harston: Recent legislation, particularly the newly enacted version of the BSUFA, is intended to empower the FDA to provide strengthened guidance, earlier meetings, and additional advice and resources to biosimilar applicants in exchange for increased fees in order to expedite and improve the approval process. At the time that the original BSUFA was enacted, the biosimilar programme was in its infancy and there was little data available on which to base the fees. With BSUFA II, the agency and the industry have the benefit of several years of real-world experience. As such, the new legislation is expected to significantly increase user fees for industry in exchange for increased guidance and advice aimed at expedited and streamlined biosimilar approvals.

Bordner: Several weeks before BSUFA I expired in September 2017, a bipartisan reauthorisation act, BSUFA II, was signed into law by president Trump. BSUFA II made substantial changes to address expected challenges through the next reauthorisation due in 2022. Comparing BSUFA I and BSUFA II, sponsors are now required to pay development fees, application fees and programme fees, now capped at five per year, per company. Thus, the number of potential fees has been reduced and streamlined. More importantly, BSUFA II makes structural changes intended to “enhance predictability, timeliness and efficiency of the regulatory review process” that “will increase patient access to biosimilars”, according to FDA guidance.

The Supreme Court’s decision in Sandoz v. Amgen, the first case to interpret the BPCIA statute, strongly favours the biosimilars industry.
— Thomas Bordner

FW: How would you characterise the implications of the 2017 Sandoz v. Amgen case? What lessons should the biosimilars industry learn from the judgements handed down by the Supreme Court?

Loh: Sandoz v. Amgen focused on two narrow questions of statutory interpretation. Accordingly, the Supreme Court’s answers to those questions were narrow, and focused on the statutory language of the BPCIA, rather than on practical consequences or policy considerations. One lesson that can be drawn from Sandoz is that it can be difficult to bring policy arguments to the attention of the Supreme Court, particularly if there are competing policy arguments that favour both sides.

Gallagher: The BPCIA is not particularly a model of clarity, but its lack of clarity can create opportunities for varying interpretations. The Sandoz v. Amgen case epitomised two examples of provisions in the statute that were susceptible to interpretation. First, the question whether a biosimilar applicant had the option not to participate in the ‘patent dance’, and second, whether the FDA had to licence a biosimilar before the sponsor could send a notice of commercial marketing. As the case proceeded through the appellate process all the way to the Supreme Court, it became clear that the judges and justices wanted to know the FDA’s position or guidance on the issues.

Harston: The Supreme Court’s decision benefits biosimilar applicants in two ways. First, a biosimilar applicant’s failure to provide its application and manufacturing information to the reference product sponsor is not enforceable by injunction. Thus, the branded manufacturer may not immediately know what patents and what claims can properly be asserted in instances when a biosimilar applicant does not provide such information. Second, because the biosimilar applicant can give marketing notice in advance of launch, there will not be an additional six month monopoly for the reference product sponsor. Industry should carefully weigh whether the advantages afforded by the ‘patent dance’ will outweigh disadvantages of its disclosure requirements and give marketing notice well ahead of approval.  

Jadeja: The Sandoz v. Amgen case was significant for many reasons, not least because it was the first time the application of the BPCIA and questions concerning biosimilars had been under scrutiny by the US Supreme Court. As well as testing the legal framework, the case undoubtedly raised the profile of the biosimilar industry and its complex landscape. The outcome of the case was supportive of the biosimilar manufacturer in confirming that it was not obliged to start the ‘patent dance’ – in effect refusing to grant the innovator access to its information. With no doubt significant implications for both parties in this particular case, its effects might not be so widely felt in practice as some suggest.

Bordner: Commentators widely regard the Sandoz v. Amgen decision to be highly favourable to the biosimilars industry. There has been a flurry of aBLA-related litigation, perhaps in view of Amgen v. Sandoz, specifically concerning biosimilar filgrastim and pegfilgrastim, a PEGylated filgrastim analogue. As of 7 August 2018, at least nine such cases stood either pending, on appeal or affirmed between Amgen as the reference product sponsor, and a host of competitors including Sandoz, Apotex, Coherus BioSciences, Mylan, Adello Biologics and, most recently, Hospira as respective aBLA applicants. Looking at the Amgen v. Adello case, it is notable that Adello elected to forego the ‘patent dance’ by not exchanging any Section 262(l)(2)(A) information with Amgen.

Herrmann: Litigation gives biosimilar applicants more freedom to decide whether or not they want to share sensitive information with the reference product sponsor, and provides them with an opportunity to launch six months earlier by not waiting for FDA approval to start the 180-day notice clock. At the end of the day, however, the overall impact may not be that significant, since applicants will also carefully consider the risks that biosimilar marketing bears when patent lawsuits are still ongoing, such as royalties or recalls. The biosimilar applicant waives control for scope and timing of pre-approval litigation to the reference product sponsor by skipping the ‘patent dance’.

Yen: The Supreme Court ruling in Sandoz, and the developments that have followed, have generally weighed in favour of biosimilars applicants. Following the Supreme Court’s ruling in Sandoz that federal courts cannot enjoin biosimilars applicants to produce their aBLA or manufacturing information under the BPCIA ‘patent dance’, the Federal Circuit ruled in December 2017 that state law also cannot be used to compel compliance with the ‘patent dance’ exchanges. In the wake of Sandoz, biosimilars applicants have taken various approaches, such as foregoing the ‘patent dance’ in whole, or starting with the ‘patent dance’ procedures but abandoning them midstream.

FW: What, in your opinion, does the Sandoz v. Amgen litigation mean for the credibility of the Biologics Price Competition and Innovation Act of 2009 (BPCIA), as well as the process known as the ‘patent dance’?

Gallagher: Without question, the decision in the Sandoz v. Amgen case creates a multitude of options and opportunities for biosimilar applicants. On a case-by-case basis, the biosimilar applicant and the reference product sponsor will need to evaluate whether partaking in the ‘patent dance’ is more or less advantageous than foregoing the statutory exchange. The answer will not be the same for each product a company develops, and may change as the process unfolds. The BPCIA creates a framework of incentives for a biosimilar applicant and reference product sponsor to negotiate patents to be litigated in advance of approval and launch of a biosimilar product.

Bordner: The Supreme Court’s decision in Sandoz v. Amgen, the first case to interpret the BPCIA statute, strongly favours the biosimilars industry. We are told by the Court that the BPCIA provides a “carefully calibrated scheme for… adjudicating …infringement”. Under the provisions of the BPCIA, the biosimilar applicant and the sponsor typically exchange information in what is known as the ‘patent dance’. The court faced the question whether the sponsor can enjoin the applicant to dance when they have chosen not to. The answer was no. The sponsor cannot enjoin the applicant to provide information even though Section 262(l)(2)(A) of the BPCIA states the applicant “shall” provide information, a copy of the aBLA and manufacturing information to the sponsor.

Jadeja: The litigation neither undermines nor enhances the credibility of the BPCIA. It simply helps the dancers know how and in what circumstances the first foot must be put forward. When the music starts, as it often will, there will be a key tactical and strategic move by the biosimilar manufacturer to either start the dance or wait for the innovator to take its own recourse.

Herrmann: One should consider first and foremost that the overall objective of the BPCIA is to provide a legal framework for the manufacturing and licensing of affordable biologics. In this light, the Supreme Court’s decision encourages the credibility of the BPCIA, by basically stating that entering the ‘patent dance’ is optional and the clock for the 180-day notice period does not have to start following biosimilar approval, which would be a de facto exclusivity extension of six months. Until now, the majority of biosimilar applicants are still getting engaged in the ‘patent dance’ for different reasons, as it gives the biosimilar applicant control over the litigation process.

Yen: Sandoz has taken the spring out of the step of the ‘patent dance’. Despite Congress drafting the extensively detailed back-and-forth regime reflected in the ‘patent dance’, Sandoz cleared the way for biosimilar applicants to avoid the ‘patent dance’ entirely. Biosimilars applicants have recently been experimenting with a variety of strategic approaches, including making only partial use of the ‘patent dance’ procedures, which are now percolating through hotly contested district court proceedings. In combination with parallel patent disputes in before the Patent Trial & Appeal Board (PTAB), the uncertainty of the course of litigation in the wake of Sandoz has resulted in even greater complexity than Congress envisioned.

Harston: The BPCIA still provides a pathway for biosimilar applicants and reference product sponsors to settle patent issues prior to launch of biosimilar products. While some may argue that the Supreme Court’s decision in Sandoz v. Amgen has gutted the BPCIA, in practice, many biosimilar applicants have chosen to engage in the BPCIA’s ‘patent dance’ since the decision. The BPCIA clearly made engaging in and completing the ‘patent dance’ optional. The Supreme Court’s decision further underscores the optionality of the dance. While the Court’s decision may arguably lead to increased uncertainty in situations where the biosimilar applicant refuses to provide any information to the reference product sponsor, thereby ‘hiding the ball’, such tactics do not appear to be beneficial for biosimilar applicants in most cases.

Loh: After the Sandoz decision issued, some commentators suggested that Sandoz might decrease incentives for biosimilar makers to participate in the ‘patent dance’ and create opportunities for biosimilar makers to initiate early declaratory judgment litigation. But recent efforts to read Sandoz this way have encountered resistance at the district court level. Two California courts in 2018 rejected the notion that Sandoz gives biosimilar makers the unfettered ability to file declaratory judgment suits without having first completed their obligations under the ‘patent dance’.

Biosimilars applicants have recently been experimenting with a variety of strategic approaches, including making only partial use of the ‘patent dance’ procedures, which are now percolating through hotly contested district court proceedings.
— Vanessa Y. Yen

FW: How contentious are the issues involved in naming and labelling a biosimilar? How have biosimilars companies responded to the FDA’s final guidance on the non-proprietary naming of products?

Jadeja: Issues concerning naming and labelling of biosimilars are understandably contentious with innovator and biosimilar companies vying for market position, while actively supporting the need for systems which are clear and facilitate pharmacovigilance. The approaches to labelling are largely aligned between Europe and the US in that the data from studies conducted to support biosimilarity do not appear on the labelling of biosimilars – which largely incorporate the information of the reference medicine – but is nevertheless publically available. In the EU, the data is found in the European Public Assessment Report. The approaches to naming, however, are not aligned. In the EU, labelling will give the unique brand name and the shared product name. On the other hand, the new naming guidelines in the US propose that the name is to be a non-proprietary name with a unique but meaningless suffix.

Harston: The FDA’s biosimilar naming guidance has been criticised by brand name and biosimilars manufacturers, as well as pharmacy groups, for multiple reasons. Requiring a random four-letter suffix is argued to create financial burdens and wreak havoc on tracking and billing systems. Requiring a different non-proprietary name for a biosimilar having the same active ingredient as the reference biologic is argued to thwart competition by creating confusion and distrust among providers and patients, and potentially preventing substitution with biosimilars. Reference product sponsors criticise the guidance for allowing random suffixes that are not uniquely tied to biosimilar company names.  Industry has also criticised the retroactive application of the guidance.

Yen: The issue of naming biosimilars was vigorously disputed a few years ago, before the FDA published its final guidance for industry on nomenclature in January 2017. Under the current guidance, US biosimilars are given a non-proprietary name that is the same as the reference product, plus a four-letter suffix that the FDA describes as “devoid of meaning”. One important question remaining is how the FDA will name a biosimilar product that is deemed to be interchangeable with the reference product, and that debate, along with how the FDA will make the underlying determination of interchangeability. We expect this issue to remain hotly contested in the coming years.

Herrmann: The biosimilar industry, with prominent representatives such as Sandoz, heavily opposed the requirement to use a non-meaningful four-letter suffix for biologics – a requirement which is unique to the US. The FDA’s intention of using this differentiation code is to enhance patient safety and drug traceability. Apart from adding a huge amount of bureaucracy, all arguments brought up by the FDA for the use of the suffix are already satisfied by other factors, most importantly the national drug code. The main worry of the biosimilar industry is thus that the suffix is creating unnecessary safety concerns for pharmacists, physicians and patients because it again questions the similarity between biosimilars and their originators.

Loh: The issue remains contentious. Some biosimilar advocates have argued that the non-meaningful four-letter suffixes required by the FDA’s naming guidance are confusing to providers and patients, and may therefore slow the adoption of biosimilars. And although the FDA’s guidance requires the addition of suffixes to the names of both biosimilar and reference products, the biosimilar industry has noted that this requirement has been imposed somewhat asymmetrically – while the FDA has required new reference products to include a suffix, no suffix has yet been applied to reference products that were approved before the guidance was issued.

Bordner: While there were, and still are, contentious naming issues, such as biosimilars using the reference product’s international non-proprietary name (INN), there is at least one criticism shared by biosimilars and innovators alike regarding the guidance on randomised non-proprietary suffixes added to the INN. According to the guidance, a suffix “should not:… look similar to or otherwise connote the name of the licence holder”. The guidance seeks to promote pharmacovigilance, safety and error reduction. It would seem that identifying the manufacturer in as many ways as possible would further those objectives. Perhaps the non-proprietary suffix issue continues to simmer in view of the observation that Sandoz’s Zarixio – filgrastim-sndz – product seems to contravene the guidance. In fairness, the Zarixio product was approved well before the guidance was given, nevertheless the suffix remains unchanged. As to labelling, it will be interesting to watch how label carve-out issues being addressed in the etanercept litigation between Amgen, as the reference product sponsor, and Sandoz, as the aBLA applicant, unfold.

Gallagher: The naming issue was heavily disputed before the FDA issued its ‘Guidance for Non-proprietary Naming of Biological Products’ in January 2017, and it still remains a highly contentious topic. The FDA determined that non-proprietary names for biological products would consist of the product’s original proper name followed by a unique identifying suffix to distinguish among products made be different manufacturers. Many stakeholders in the biosimilars industry point to this as a contributing factor in the lack of market uptake for biosimilars in the US. The FTC opposed the FDA’s proposal to use differentiators for biosimilars, and reiterated that opposition responding to the FDA’s request for comment on the FDA’s Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs. At the FDA’s 4 September public hearing, the FDA’s naming convention, including distinct suffixes for biological products, remained a topic of discussion and disagreement.

FW: In terms of switching patients from originator biologicals to biosimilars, to what extent have you observed a change in attitudes? What guidance are bodies such as the European Society of Medical Oncology (ESMO) providing on this issue?

Yen: The attitude of payors, physicians and patients in the US has not changed much with respect to the use of biosimilars. For example, some insurers might only allow substitution of a biosimilar for an originator product if a patient had an adverse reaction to the originator treatment, where it might be the case that a patient with such a reaction should be switched to an entirely different drug. Notably, the FDA has yet to approve a biosimilar product as truly ‘interchangeable’ under the BPCIA – which also may have an impact on the market’s perception of products deemed only ‘biosimilar’.

Herrmann: Whereas switching between small molecule generics is widely accepted, there is still reluctance to switch between originators and biosimilars. This hesitation, however, is not supported by any data generated in the EU or US so far, where no statistically significant differences in safety could be observed. For scientists trained in the field, it is obvious that the batch to batch variability, and even more the variability introduced by process changes, is comparable to the variability between biosimilar and originator biologics. Thus, biosimilarity is not a new concept; it has been known since the first biological product was introduced into the market. However, physicians, healthcare providers and patients need to be well informed and convinced by the safety and efficacy of a biosimilar.

Bordner: Few people would suggest a headlong charge into swapping biosimilars for reference products. Biologics are structurally complex, sensitive to manufacturing conditions and difficult to characterise – factors that warrant considerable caution. Consequently, clinical confidence in biosimilars is somewhat lacking and providers are understandably hesitant to prescribe biosimilars to patients already receiving originator products. Nevertheless, biosimilar patient exposure days are pushing tens of millions and the volume of studies comparing biosimilars to originator products continue to accumulate. ESMO’s aim “to explore the issues surrounding biosimilars that are relevant [to] oncology, especially the prescribers” recognises these factors and encourages “all key actors… to understand the complexities of biosimilars”.

Harston: While there are currently some studies on switching patients between certain reference products and biosimilars, a broader base of evidence will help physicians, patients and payors decide whether a given biosimilar product will be as safe and effective as the reference product. While payors have become increasingly likely to authorise switches to reduce costs, biosimilar quality assurance is a main concern given the relatively complex manufacturing, storage and transportation processes for biologic products. Both the ESMO and the American Society of Clinical Oncology (ASCO) have issued statements affirming commitment to enhancing confidence in biosimilars through provider education and advocacy for policies that ensure efficient approval, unrestricted access and appropriate use of biosimilars.

Gallagher: Attitudes toward switching in the US have been slow to change. For all the attention to FDA policies, regulatory approval pathways, pricing and naming, conservative approaches by physicians to switching is perhaps one of the two biggest hurdles that is currently impeding rapid uptake of biosimilars in the US. This probably should not be a surprise. If a physician is treating a patient who is already on the originator biologic and the patient is responding well to treatment, neither the physician nor the patient has any incentive to switch the patient to a biosimilar, especially when the first product has already been approved by insurance, and the patient will not pay any less out of pocket for switching to the biosimilar. Statements from organisations such as the ESMO are certainly helpful in educating physicians and patients about the safety and benefits of biosimilars.

Jadeja: It is important to flag the difference between automatic substitution and switching. The former is done by the pharmacist without consulting the physician. The latter is a decision taken by a physician to prescribe one medicine over another. The attitude to switching of the UK’s healthcare providers is neatly reflected in the commissioning framework for biological medicines 2017, prepared by NHS England, which states: “it is now important for the NHS to embed the principles of switching to the best value biological medicine into commissioning and clinical practice, if we are to realise the optimal rate and extent of savings associated with these medicines”. The joint position paper by the European Biopharmaceutical Enterprises (EBE), the European Federation of Pharmaceutical Industries and Associations (EFPIA) and the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA) highlights the central role of physicians in any switching decision made on the basis of clinical judgement before considering the overall value proposition of the medicine. Automatic substitution is not considered appropriate for biological medicines.

Some biosimilar advocates have argued that the non-meaningful four-letter suffixes required by the FDA’s naming guidance are confusing to providers and patients.
— Christopher E. Loh

FW: As far as the pricing of biosimilars is concerned, is the industry doing enough to meet the goal of reducing prices? What can the industry do to balance high manufacturing costs with making biosimilars affordable to the public?

Harston: As only a handful of biosimilars have launched thus far in the US, significant price reductions due to increased competition remain elusive. In Europe, as increasing numbers of biosimilar versions of respective drugs have launched, Europe’s relatively more favourable market access framework, combined with increased competition, has put downward pressure on prices. Developing a biosimilar requires significant investment, particularly where the regulatory and patent paths to market are lined with pitfalls and uncertainty. Industry should work in conjunction with regulatory agencies to streamline clinical development processes, for example by eliminating human clinical trials when unnecessary, improving quality controls and increasing manufacturing efficiencies through improved expression, purification and stable storage procedures. By negotiating better agreements with payors, industry can strike a balance of reducing costs while maximising sales volume through increased biosimilar uptake.

Bordner: The market for biosimilars is highly unlikely, at least in the foreseeable future, to achieve savings comparable to those seen with the introduction of generic small molecule drugs. There are significant costs associated with manufacturing complex and highly variable products of nature. Technological advances will undoubtedly reduce production costs for biosimilars, but only to a point. Beyond manufacturing costs, there are other factors and obstacles that will likely keep costs of biosimilars high. These include certain litigation tactics used by originators and biosimilars alike, such as settlement agreements that delay competition, still-evolving regulatory pathways that have hindered interchangeability and a general lack of transparency.

Herrmann: Pricing of biosimilars is quite different across countries and seems to depend more on the healthcare systems than on the biosimilar industry. Countries with tender systems, such as Norway, have price reductions up to 70 percent, while payer-driven countries sometimes have price reductions of just 5 to 10 percent. The mean price reduction of those biosimilars which entered the EU market several years ago is 33 percent in the EU, while the price reduction of the later-introduced biosimilar antibodies is less. Potential price reductions are related to lower investments and development risks as well as to more efficient manufacturing technologies resulting in lower cost of goods sold (COGS). Both give more flexibility for further price reductions, which in no way will be comparable to the price reductions seen for small molecule generics, because of higher manufacturing and development costs.

Gallagher: In a free market economy, the market ultimately determines the price it will bear, and the same should generally be true in the biologic and biosimilars market. It remains true that there is significant cost and risk to bringing a biosimilar product to market, and anyone who brings a biosimilar to market should be able to charge a fair price for its investment. No one is expecting the same types of price discounts for biosimilars as exist for traditional small molecule generic drugs. As the biosimilars market matures, pricing should naturally work itself out. Where attention should be devoted are factors that create potential distortions to the market to prevent biosimilars from fairly competing for market share. Formulary access, rebates, discounts and chargebacks all create potential distortions in the market that potentially create unfair disadvantages for biosimilars.

Jadeja: The pricing and reimbursement of biosimilars is complex and dealt with differently both across Europe and in the US. Pricing reductions seen in the generic industry are not indicative of the percentage price reductions that might be seen with the introduction and increased uptake of biosimilars. Products and the way the markets operate are very different. For example, the development of biologics and biosimilars is highly complex and often more expensive than the development of a small molecule drug. The position of NHS England is that the UK has already benefited from significant savings with the introduction of biosimilars and will continue to do so. The ongoing goal should be to encourage competition – and initiatives tackling a wide range of factors should be encouraged which support this, rather than focusing on pricing per se.

Yen: Critics of the industry say there is not enough being done to bring down prices, but the harder part has been finding workable solutions. The marketed biosimilars in the US are discounted at 15 to 35 percent of the originator wholesale price – and that does not account for arrangements with payors, which can potentially reduce or even reverse the disparity in net prices between originator and biosimilar products. The FDA recently introduced a ‘Biosimilars Action Plan’ of modest action steps to bring down the cost of biosimilars. These steps include developing tools, such as standardised review templates and in silico models and simulations, to correlate pharmacokinetic and pharmacodynamic responses with clinical performance, enhancing the ‘Purple Book’ to provide more transparency, exploring data sharing agreements with foreign regulators to facilitate the use of non-US-licensed comparator products and developing critical quality attributes to reduce the number of lots of the reference product required for testing.

Issues concerning naming and labelling of biosimilars are understandably contentious with innovator and biosimilar companies vying for market position.
— Nicole Jadeja

FW: What advice would you offer to biosimilars companies in terms evaluating the ethical concerns they face?

Herrmann: The ethical concerns of prescribing biosimilars or switching from originators to biosimilars are probably one of the most important items to address, at least in healthcare markets which are not primarily monetary driven. Although concerns cannot be scientifically supported, they need to be taken seriously in order to promote biosimilar uptake. The concerns can only be overcome by substantial data and information packages demonstrating the safety and efficacy of biosimilars, and may have to include clinical phase IV data, which must serve the needs of healthcare professionals and patients.

Harston: As most biosimilar products are intended to be only as safe and effective as their respective reference products, rather than conferring a significant improvement in safety or efficacy, a main ethical concern is the extent to which to conduct clinical trials in anticipation of requests from various regulatory agencies. Given the risks to patients participating in clinical trials of biosimilar products, for example that the biosimilar may be less safe or less effective than the reference product, and the perceived limited benefit to taking on those risks, industry should gain as much insight as possible into what clinical trials, if any, are necessary. New in vitro immunogenicity tests may help to alleviate some ethical concerns.     

Jadeja: The ethical considerations for biosimilar companies are no different from those facing any manufacturer of medicines – the safety, health and well-being of patients is paramount and must, as I am sure it is, always be at the forefront of the industry’s minds. The need for robust evaluation of the efficacy and safety of medicines – including post-marketing approval pharmacovigilance – underpins the whole pharmaceutical industry, and the biosimilar sector is no different. The European regulator cites the more than 10 years of clinical experience in the EU as evidence that approved biosimilars can be used as safely and efficaciously as all other biological medicines. This is a scientifically logical conclusion, but there are many stakeholders that still need to be persuaded – which is likely to require biosimilar companies to deploy a range of tools – from high-quality education together with continuing advancements in analytics of reference and biosimilar products.

Gallagher: You have one overarching concern and that is to serve your patients. Everything else will fall into place when following that guiding principle.

Yen: The ethical questions facing biosimilars companies, and physicians in the position of prescribing biosimilars or originator products, are challenging. These issues are especially prominent in the oncology space, where the potential downside risk of switching a patient off of an effective treatment could be severe. The clinical data on switching from originator to biosimilar products in the oncology space is fairly limited at present, and even designing such studies raises significant ethical questions. As biosimilar applicants and the FDA progress toward approving the first products meeting the standard of ‘interchangeable’, physicians may be more encouraged to attempt switching patients than they are at present.

Bordner: Some perceive biosimilars as being less safe and perhaps less effective as compared to reference products. These perceptions exist despite regulatory approval pathways that mandate biosimilars have similar quality, biological activity, pharmacokinetics and pharmacodynamics, if possible, and, if possible, clinical trial results demonstrating equivalent efficacy, safety and immunogenicity to their cognate reference products. Notably, the FDA’s website summarises approval criterion based on the biosimilar having “no clinically meaningful differences in safety, purity and potency from, an existing FDA-approved reference product”.

In a free market economy, the market ultimately determines the price it will bear, and the same should generally be true in the biologic and biosimilars market.
— Patrick C. Gallagher

FW: With more companies now operating in a part-innovator, part-biosimilar capacity, what steps need to be taken to avoid conflicts of interest?

Jadeja: The pharmaceutical industry is dynamic, progressive and competitive. The stark divide between companies developing either innovative or generic products is generally something of the past as science has advanced, markets have evolved and competition to develop and bring medicines to patients thrives. The industry has many examples of companies successfully operating in both the innovator and biosimilar space reflective of the fact conflicts of interest, to the extent they exist, can be managed. The relationship is one which, in my view, ensures a constantly healthy and dynamic consideration of regulatory, legal and commercial healthcare strategies and policies.

Gallagher: In some ways, the evolution of companies involved on both sides of the branded biologic and biosimilar line itself helps to diminish certain conflicts of interest. There is not a clear branded and generic divide in the biologics and biosimilars industry like there used to be for small molecule Hatch-Waxman products. Companies in the biologics industry see true financial potential for development of biosimilar products, even as they also continue to develop and market new branded biologics. Hopefully, this creates incentives for those companies to advocate for smart health policy, as they see alignment with policies that achieve a balance between incentives for continuing new innovation and access to lower cost alternative biosimilar products.

Harston: Given that large, established pharmaceutical companies are now vying to sell biosimilar versions of their rivals’ innovator products, the potential for conflicts of interest looms large. Historically, large pharmaceutical companies have partnered with each other to develop and market innovator products. Now, those same companies may be adverse in litigation related to biosimilar applications. The potential to settle litigation over biosimilar products in exchange for cooperation in other areas or in exchange for delayed authorised market entry creates risks of anticompetitive behaviour. Further, established companies can use their negotiating power with insurers, hospitals and clinics to limit competition in the biosimilars space – through rebating schemes, volume-based rebates, tying rebates and multi-year contracts restricting product sales.

Yen: From the perspective of outside pharmaceutical patent litigation counsel, the legal market for biosimilars disputes looks very different from the traditional divide of innovator ‘brand’ companies and ‘generic’ patent challengers in the Hatch-Waxman space. Some firms that have typically represented brands in Hatch-Waxman litigation have taken on representation of biosimilars applicants against other brands, while other brand-side litigation practices have tried to represent innovators exclusively in the biosimilars space. The biosimilars patent litigation space may end up looking more like the technology and electronics patent practice, where outside counsel might identify clients and ‘anti-clients’ from a business perspective, rather than staying on one side of the divide as representing only patentees or patent challengers.

Loh: From an outside counsel’s perspective, the best practices for handling conflicts of interest in the biologics space are largely the same as those for addressing conflicts of interest in other areas: identify conflicts as soon as they arise, disclose them to the affected clients or parties, and, if possible, secure from them the necessary consent and waivers required to proceed.

Bordner: Small molecule drug competition innovator companies and their generic competitors have largely been on opposite sides. Consequently, attorneys and other professionals working with clients in this sector tend to specialise in representing either innovators or their generic competitors. Attorneys representing clients in small molecule Hatch-Waxman patent litigation tend to stay on one side of the fence or the other. In contrast, the distinction between innovator and biosimilar companies is often blurred. Here we see innovators, and subsidiaries thereof, marketing authorised generics, manufacturing follow-on biologic biobetters, as well as directly entering the biosimilar market.

Herrmann: We do not see a conflict of interest as long as different drugs are considered and every company faces the same development and regulatory hurdles. The biggest conflict of interest is when an originator company is developing a biosimilar of its own originator product. This company would have a tremendous advantage compared to all competitors, because it knows both the process and the final quality attributes of the reference medical product and certainly can circumvent any patent litigation. In order to keep competition ongoing, mechanisms have to be put in place allowing fair competition in order to provide affordable biosimilars to patients.

FW: Looking ahead, what challenges are likely to dominate the biosimilars industry in the coming months and years? How do you evaluate the industry’s future prospects?

Jadeja: In the coming months and years, we will see an increasing numbers of biosimilars being approved in Europe and the US. The key challenge for the industry will be translating these approvals into the accessibility of these medicines to patients. This will require coordinated efforts by many stakeholders, including politicians, regulators, lawyers, physicians, payers, scientists, patients and economists – itself a challenge. I have no doubt we will see more regulatory initiatives, more patent and legal challenges, including potential antitrust and competition claims, better analytics, increasing pressure for cost savings, increasing demand for biosimilars, innovative pricing systems and much debate. Overall, though, the potential market for the industry is huge and will drive a vibrant industry going forward.

Harston: On the regulatory front, further guidance is required to streamline review processes and reduce confusion in terms of required testing. For example, the FDA recently issued and then withdraw its pivotal biosimilar products testing guidelines after a citizen petition challenged the guidance. Finding a sufficient number of patients for clinical trials is another challenge. For commercialisation, acceptance of biosimilars by doctors, patients and insurers remains a challenge to achieving the level of sales volumes necessary to justify investment in manufacturing more biosimilars. Patent litigation will remain a challenge given the large numbers of patents to be cleared before launch. As long as industry can balance the costs of overcoming these challenges with providing valuable products to stakeholders, it will grow.  

Gallagher: The future of the biosimilars industry looks extremely bright, both in the US and globally, as evidenced by the broad interest from those in the pharmaceutical and biotechnology industries to get involved in the biosimilars space. In the near term in the US, two challenges are likely to present the primary hurdles to be faced by those in the biosimilars industry. First, educating prescribers and patients about biosimilars, including product safety and efficacy issues. As prescribers and patients gain a better understanding of the research behind biosimilar products and become more comfortable with biosimilars as treatment options, market uptake is likely to dramatically increase. Second, market distortions created by formulary access and rebates or other financial incentives provided by branded biologic sponsors may need to be addressed so that biosimilar products can fairly compete in the market. The worst possible scenario would be to allow policies to stay in place that cause biosimilars to be unprofitable for the companies bringing them to market.

Yen: In addition to being embroiled in highly complex patent litigation on multiple fronts, reference product sponsors may also expect to endure some regulatory and antitrust scrutiny over the next several years. For example, in July 2018, the FDA commissioner gave remarks in rolling out the FDA’s ‘Biosimilars Action Plan’ where he, among other things, threatened heightened scrutiny by the FDA and the Department of Justice (DOJ) for practices that are deemed to be anticompetitive. As for future prospects of biosimilars, all eyes are on the FDA, waiting for it to approve the first biosimilar product as ‘interchangeable’, such that pharmacists can make a switch from the reference product to the biosimilar at the pharmacy level. This will be a game changer for the entire biological product industry, and could potentially impact both the pricing structure for biosimilars as well as their acceptance in the marketplace.

Loh: The present challenges are largely technical. Relatively few drug manufacturers possess the manufacturing know-how and clinical and regulatory expertise necessary to bring biosimilars to market. In the US, significant demand-side factors continue to affect the industry, including a low awareness of biosimilars among patients and providers, and inconsistent state regulations concerning the prescribing of biosimilars versus reference products.

Bordner: The US biosimilars industry must continue to push for effective pathways for interchangeability and to seek interchangeability determinations from the FDA. The EMA does not centrally regulate issues of interchangeability, switching and substitution. Instead, these determinations are left to the individual member states, their health authorities and payers to work out. As a consequence, healthcare savings arising from biosimilar introductions in some EU countries, notably Germany, are far greater than anything seen in the US healthcare system to date.

Herrmann: The most challenging question will be how companies position themselves in a market that is becoming more crowded. Differentiation from other biosimilars, as well as from the originator, without stepping over the boundary of biosimilarity, will be the most important aspect in the future. This means biosimilars should have an added value for patients, such as a better device or a formulation with less pain at injection side. Additional clinical studies should be performed to prove the benefits. Depending on the market, price reduction alone will certainly not be sufficient to gain enough market share.

 

Patrick C. Gallagher chairs the pharmaceuticals and biopharmaceuticals litigation and regulatory group at Duane Morris LLP. He practices in the area of intellectual property (IP) and regulatory law, assisting generic pharmaceutical companies, compounding pharmacies and others in the agricultural, chemical and biotechnology industries with IP and regulatory matters. Mr Gallagher assists clients with prevention and resolution of disputes and advises on best strategies for IP and regulatory compliance. He can be contacted on +1 (561) 962 2131 or by email: pcgallagher@duanemorris.com.

Nicole Jadeja is co-lead of Fieldfisher LLP’s life sciences practice and a life sciences lawyer specialising in intellectual property (IP) disputes. She has extensive experience litigating life sciences patents in UK Courts, the European Patent Office, and the Court of Justice of the European Union. She can be contacted on +44 (0)20 7861 4385 or by email: nicole.jadeja@fieldfisher.com.

Christopher E. Loh practices complex patent litigation in the areas of pharmaceuticals, biotechnology and chemistry. Over the past 15 years, he has litigated patent cases involving oncology therapies, anti-HIV therapies, anti-hepatitis drugs, antidepressants and statins, including as lead counsel. He has experience arguing before the US Court of Appeals for the Federal Circuit, and has won on behalf of patent owners in inter partes review proceedings before the Patent Trial and Appeal Board (PTAB). He can be contacted on +1 (212) 218 2206 or by email: cloh@fchs.com.

Vanessa Yen is a partner in King & Spalding LLP’s intellectual property, patent, trademark and copyright litigation team. Her practice focuses on intellectual property matters, including pharmaceutical and biotechnology patent litigation, post-grant proceedings and counselling. Ms Yen has significant experience litigating high-stakes patent disputes, and representing clients with patents covering multi-million and billion dollar products in the pharmaceutical, biotechnology and biologics industries. She can be contacted on +1 (212) 556 2212 or by email: vyen@kslaw.com.

Thomas Bordner’s biotechnology experience, gained from both an extensive in-house career as the director of intellectual property (IP) and from private practice, allows him to help his clients with their complex IP issues. He provides strategic advice and practical assistance in all aspects of patent, trade secret, trademark, and copyright acquisition and protection, as well as portfolio evaluation and management, licensing and asset monetisation. He can be contacted on +1 (617) 456 8038 or by email: tbordner@princelobel.com.

Aydin H. Harston is an associate at Rothwell, Figg, Ernst & Manbeck, P.C. His practice involves patent litigation, patent prosecution, post-grant proceedings, portfolio evaluations and opinions. Since joining the firm in 2007, Dr Harston has handled matters covering a wide array of technological fields, including pharmaceutical patent litigation and prosecution, as well as evaluation and management of biologic and biosimilar patent portfolios. He can be contacted on +1 (202) 783 6040 or by email: aharston@rfem.com.

Andreas Herrmann is a serial entrepreneur who has started and built a number of successful companies in the biotechnology industry, ranging from service to product development companies. An experienced chief executive with a demonstrable history in biopharmaceutical development and strong business development, Mr Herrmann is a professional skilled in antibodies, pharmaceutics, good laboratory practice (GLP), good manufacturing practice (GMP), biosimilars and biotechnology. He can be contacted on +41 61 205 3911 or by email: a.herrmann@valeriusbio.de.

© Financier Worldwide


THE PANELLISTS

 

Patrick C. Gallagher

Duane Morris LLP

 

Nicole Jadeja

Fieldfisher LLP

 

Christopher E. Loh

Fitzpatrick, Cella, Harper & Scinto LLP

 

Vanessa Y. Yen

King & Spalding LLP

 

Thomas Bordner

Prince Lobel Tye LLP

 

Aydin H. Harston

Rothwell, Figg, Ernst & Manbeck, P.C.

 

Andreas Herrmann

Valerius Biopharma AG


©2001-2018 Financier Worldwide Ltd. All rights reserved.