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Dec. 8 — The Federal Trade Commission's prediction six years ago that prices for biosimilars would be discounted by 15 percent to 30 percent of the reference biologic product's price compared to the 70 percent discount for generic drugs has turned out to be on the money, an FTC attorney adviser said Dec. 8 at a conference.
Elizabeth Ann Jex said at a session of the ABA Health Law Summit in Washington that the price for Zarxio, the first biosimilar approved by the Food and Drug Administration, is 15 percent less than the reference product (RP) Neupogen, “which is entirely consistent with what FTC wrote in 2009.” The FDA approved Zarxio on March 6 (9 LSLR 328, 3/20/15), and the drug hit the market later in the year (9 LSLR 1008, 9/18/15). Novartis said upon Zarxio’s release that the U.S. wholesale list price for a 300-microgram syringe was $275.66, with the 480 mcg version costing $438.98. Neupogen costs $324.30 and $516.45 for the same syringe formulations, according to Amgen’s court filings.
Jex said that the FTC had also predicted in 2009 that competition between an RP and a biosimilar would resemble brand-to-brand competition more than the dynamics of brand versus generic drugs; that there would likely be only two to three biosimilars per RP seeking FDA approval; and that the lack of automatic substitution between biosimilars and an RP would slow the rate at which a biosimilar could acquire market share.
“Sadly, what we wrote in 2009 is coming to bear,” Jex said.
Looking at the situation from the clinical perspective, Steven Lucio, senior director of clinical solutions and pharmacy program development for health-care services company Novation, noted the differences between generic drugs and biosimilars. He said, “Acceptance of the biosimilar paradigm by physicians and patients must include a willingness to trust more in analytical evaluation than relying on clinical studies.”
The session was titled “Biosimilars: Overcoming the Legal, Regulatory and Practice Hurdles to Access and Adoption.”
Lucio said that the marketplace is no longer dominated by small-molecule, chemically-derived drugs like Lipitor for high cholesterol, but by biologics such as Humira and Enbrel for arthritis and Sovaldi for hepatitis C.
“I am often asked, ‘When can we expect the first generic biologic drug?' And the answer is, ‘Never,' ” Lucio said. “Generic drugs are identical and therefore interchangeable with the brand drug. But biologic drugs are much more complex, they are much more difficult to manufacture and they vary over their life cycle from batch to batch. Copies of biologics can’t be identical, only biosimilar.”
Lucio noted that for the approval of generic drugs, the indications of the generic are the same as for the brand name; the cost to develop a generic are $1 million to $4 million; and the price discounts from the brand-name drug range from 50 percent to 90 percent.
In contrast, Lucio said, a biosimilar developer must conduct at least one clinical trial; the biosimilar might not include all indications; and it may be interchangeable with the RP only if it receives additional approval from the FDA indicating it is interchangeable.
So far, he said, development costs for biosimilars range from $100 million to $250 million, and the discounts can range from 15 percent to 30 percent.
“We've made progress in biosimilars,” Lucio said, noting the approval of the first one. “Hopefully, four or five more will be approved in 2016. Pending issues are naming for the biosimilars, whether more complex biosimilars will be approved for all of the uses of branded biologics and to what extend FDA will make interchangeability easy or hard. The challenges for physicians are a lack of familiarity with the biosimilar paradigm and with the processes for biologic manufacturing and approval.”
Jex said that in its 2009 report, the FTC recommended against any additional exclusivity period being given to the RP. “But Congress didn't listen to us, and the Biologics Price Competition and Innovation Act (BPCIA) gives 12.5 years of data exclusivity for biologics that is in addition to the exclusivity the RP gets from its patents.”
She called the BPCIA's patent resolution mechanism “obscure and poorly constructed, in my opinion.”
Jex then discussed the FTC's comments on the FDA's draft guidance on biosimilars naming.
The FDA proposed that reference products and biosimilars have nonproprietary names that share a core drug substance name and, to better identify each product, an FDA-designated suffix that is unique for each product (9 LSLR 1033, 9/18/15). This suffix would be composed of four lowercase letters that won't carry any meaning. For example, the nonproprietary name of a reference product could be replicamab-cznm, and a biosimilar to that product could be replicamab-hixf.
In its comments on the draft guidance, the FTC said that the purpose of the FDA’s naming convention is to improve pharmacovigilance—monitoring the effects of drugs after they have been licensed for use, especially to identify and evaluate previously unreported adverse reactions—and to minimize possible inadvertent substitution of biological products that the FDA hasn't determined to be interchangeable.
But the FTC wrote that the FDA's “naming convention, which departs from the FDA tradition, may cause physicians to believe mistakenly that the products necessarily have clinically meaningful differences, potentially resulting in reduced price competition in biologic drug markets.”
Jex said that 95 percent of all adverse events are reported by drug manufacturers.
“It's odd, then, that they are saying the reports are ambiguous,” she said.
“In addition, 70 [percent] to 90 percent of all biologics are dispensed in clinical settings where doctors prescribe them. Under the BPCIA, no biosimilar can be automatically substituted without the intervention of a prescribing physician. There isn’t a danger of inadvertent substitution now or in the foreseeable future. This concern about inadvertent substitution appears to me, at least, to be exaggerated and overblown,” Jex said, adding that there have been no data or anecdotal reports of immunogenic harm due to substitution of biosimilars for a reference biologic.
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