INNsight article by Peter Wittner, Interpharm Consultancy, April 2010

In one of the most significant developments ever in the history of US healthcare, the House of Representatives finally passed HR3590, the ‘Patient Protection and Affordable Care Act’ which for the first time ever brings healthcare cover to the entire US population.

Amongst the most significant sections of a significant Act is the section relating to Biosimilars with the catchy name “TITLE VII—IMPROVING ACCESS TO INNOVATIVE MEDICAL THERAPIES, Subtitle A—Biologics Price Competition and Innovation”. Nevertheless, it may well turn out to be of immense importance to the generics industry because it includes the revolutionary “Sec. 7002. Approval pathway for biosimilar biological products” that finally opens up the road to a Biosimilars market in the US.

The text of any legislation is generally pretty dry and uninteresting – remember that it is, after all, written by lawyers – and this is no exception, but the text does nevertheless include some interesting sections. Right at the start there is a surprise in the section dealing with “LICENSURE OF BIOLOGICAL PRODUCTS AS BIOSIMILAR OR INTERCHANGEABLE.” Bear in mind that the majority of EU countries either have some form of law precluding the possibility of interchangeability or else doctors and pharmacist who are reluctant to consider the possibility. To me, including the word “interchangeable” in the title and text seems like a form of insurance built in to the text by the legislators in an attempt to preclude Big Pharma arguing that it is too risky to allow use of generic versions of their products.

Of course, the Biosimilar manufacturers will have to find a way of proving interchangeability of their product to the satisfaction of the FDA and there is no guarantee that they will be able to do so. Nevertheless, it is significant that the possibility exists and is protected by law.

The issues of exclusivity are addressed with the generics industry losing out to Big Pharma on the one hand and winning on the other. Originator products gain a massive 12 years of exclusivity,
                            “Approval of an application under this subsection may not be made effective by the Secretary until the date that is 12 years after the date on which the reference product was first licensed ….”
but the first Biosimilar gains 12 months before any other copy can be marketed. The exclusivity granted to the originator at 12 years is more than twice the 5-year period that is granted to ordinary non-biological brands. On the other hand the first small molecule generic to file under Paragraph IV only wins 6 month’s exclusivity from the FDA whereas the first biosimilar gets twice that with a full year of exclusivity.

For those keen readers who want to know when we get to the section about patents, this is it. The Act includes similar provisions to those in Hatch-Waxman dealing with how an originator can respond to a generic application.
                            “Not later than 60 days after the receipt of the application and information …. the reference product sponsor shall provide to the …. Applicant…
                         ‘‘(i) a list of patents for which the reference product sponsor believes a claim of  patent infringement could reasonably be asserted by the reference product sponsor, or  by a patent owner that has granted an exclusive license to the reference product sponsor with respect to the reference product, if a person not licensed by the reference product sponsor engaged in the making, using, offering to sell, selling, or importing into the United States of the biological product  that is the subject of the … application; and
                          (ii) an identification of the patents on such list that the reference product sponsor would be prepared to license to the …. applicant.”

In return, the applicant has the opportunity to provide a statement describing
                           “the factual and legal basis of the opinion of … applicant that such patent is invalid, unenforceable,  or will not be infringed by the commercial marketing of the biological product  that is the subject of the …. application; …”
which is rather reminiscent of what a Paragraph IV applicant has to do.

The Biosimilars market in the US will not open up tomorrow since the FDA has first to formulate its procedures for handling them. Nevertheless, when it does the potential is very large.

The trade association GPhA points to the high cost of such products in the US “the lung cancer drug Avastin® costs about $100,000 per year; and the cost for Cerezyme®, used to treat Gaucher disease, can run $300,000 or more per patient per year” and looks at how much might be saved by biosimilars. “Estimates from various economic impact studies pin the projected savings from $42 billion on the low end to as high as $108 billion over the first 10 years of biogeneric market formation.”

Consider the fact that BigPharma is expected to sell over $60bn biological products in 2010. If generic companies can take a part of that, each 1% of market share will be worth $600m and, even if discounted by 25%, this will still be worth $450m!

If you have any questions or comments on this article, please feel free to contact me.