As blockbuster drugs go off patent, the pharmaceutical industry is scrambling for fresh revenue sources. Follow-on versions of biologics, or "biosimilars," are being pitched as BigPharma's saving grace. One question remains unaddressed in the discussion: is anyone actually planning on selling biosimilars in the United States?
What are biosimilars?
Biosimilars are a new class of protein-based biologic drugs intended to serve as a replacement for existing biologic medicines when those original drugs go off patent. Biologic drugs include insulin, human growth hormone, monoclonal antibodies and other therapies for such difficult-to-treat illnesses as rheumatoid arthritis, cancer and Crohn's. Though designed to work similarly to their biologic predecessors, they are not "generic" despite some politicians and journalists' use of the term. The closest they will ever get to generic is to be deemed "interchangeable" once they have been approved via a pathway such as the one envisioned in the 2010 Health Reform Law, but that pathway does not yet exist.
Given the current state of scientific development, we rarely succeed in replicating proteins’ complex folding and unfolding processes under the best conditions: biologic companies have a hard enough time proving equivalence between batches of the same medication, even though they themselves hold all of the intellectual property and often use the exact same equipment and scientists. (see Genzyme’s Fabrazyme, which is once again experiencing quality control problems, for an example).
For biosimilars, we depend instead on a more nuanced determination: are they similar enough for the second drug to be considered a follow-on (a continuation) of the original drug? A few differences here and there are permissible, but does the new drug basically do the same thing the old drug did? If so, we can call them similar and permit the new drug to enter the market under the biosimilar designation.
Why do they matter?
Given these complexities, why are these drugs so important? First, they represent big money for pharmaceutical companies, and potential cost savings for governments, insurance providers and patients.
We know the Food and Drug Administration (FDA) seeks to regulate them: earlier this year it requested $124 million of the 2012 budget to develop a biosimilar approval pathway and on August 4th it released a report in the New England Journal of Medicine sketching its plans. It seems American insurers are concerned about covering them: that same day, a survey by Decision Resources indicated major hesitation among surveyed payers over approving complex biosimilar drugs such as monoclonal antibodies (mAbs), saying they would need more data to prescribe such medications than the FDA plans to request.
Will we ever get them?
For insight, I turned to Novel Health Strategies consultant Dr. Saurabh Aggarwal. After years as a lab researcher, Dr. Aggarwal now advises both biologic innovator and biosimilar companies on the economics of market entry.
According to Aggarwal, the FDA is already planning to require too much data for biosimilars to succeed in the US. “For biosimilars to be successful, the amount of data required from a regulatory standpoint cannot be as onerous as that required to get a pioneer biologic approved.” Even then, there is no guarantee that the drug will be successful. “Look at Europe: biosimilars have a relatively easier pathway, yet they have only been successful in Germany and the UK.” In Europe, not only are regulations less strict than those in the United States, but an EMA approval permits full interchangeability with the reference product. This means pharmacies can exchange the drug for the patented name-brand version without needing doctor or patient approval.
Pathway to nowhere?
Given that the US biosimilar approval pathway as now imagined does not anticipate full interchangeability, is US biosimilar development doomed before it begins? According to Aggarwal, quite possibly. “The fact is, you need interchangeability in the label to succeed. The amount of investment you need to obtain that designation - there is no financial model that would make the case to conduct those studies.”
Dr. Aggarwal is far from optimistic that a biosimilar would be designated as interchangeable with its reference drug, despite the fact that previous proteins have been in Europe. “The way the current biosimilars provision is written, if you want interchangeability to be on the label, you need clinical studies to show that you can replace the branded product. Step into the shoes of any of the current companies considering biosimilar development. You can use the analogy that biosimilar developers are like generic manufacturers, so their estimate of what they can invest is maybe 5-10 million dollars. The FDA approval pathway as explained so far would require far more than that.”
Recent EMA guidelines on biosimilar mAbs development replace interchangeability with a lesser requirement that a biosimilar antibody simply not be more harmful than the reference antibody. Though the EMA guidelines still require clinical trials, including safety trials, the EMA guideline is still a lesser standard than that for a pioneer biologic, and a lesser standard than industry groups have proposed here in the US. The EMA Guideline states that “[t]he focus of the biosimilarity exercise is to demonstrate similar efficacy and safety compared to the reference product, not patient benefit per se, which has already been established by the reference product.” Hence, differences will be tolerated on a case-by-case basis, as long as the biosimilar is exactly that: similar.
Given the fact that payers have already expressed such a lesser standard will not be accepted here, and considering the expense associated with proving interchangeability, why would a biosimilar company seek a US FDA interchangeability designation in the first place? Dr. Aggarwal opines that there is no other way to profit from the US market. “Take a scenario where no one gets interchangeability. Then the pathway has biosimilars that aren't interchangeable. If the FDA says they're not interchangeable, then doctors don't want to use it and payers don't want to pay because they're worried that if something were to happen they couldn't support the use of those products.”
They’re working elsewhere, why not here?
Across the world, government and payer demand for biosimilars keeps growing, as everyone seeks ways to cut the cost of healthcare. According to Dr. Aggarwal, those macroeconomic conditions will create the market for biosimilars. “If you look at branded products, the more aggressive they get in their price, including the aggressive pricing biologics companies have set in China, Spain and Italy, the more payers are looking to save costs by looking at biosimilars.” The pressure is on for regulators to create incentives and minimize confusion for uptake of these products. “In the UK and Germany, many of those people have used biosimilar CSF and EPO [erythropoietin] and there have been no adverse reports. They have so well endorsed and used; why can't Spain, France, Italy or the US do the same?”
One reason that we are not doing the same might be that the large, influential companies here in the US still have major branded biologics in the pipeline. Hence, these bigger players are waiting and watching while they lobby to protect their branded interests, which are far more profitable at present than any risky foray into biosimilars. Current budgets for lobbying Capitol Hill on behalf of these companies' branded biologics are equal or greater to their entire budgets for US biosimilar development.
Add generic drug lobbying to that mix: earlier this year, CVS Caremark and the Generic Pharmaceutical Association (GPhA) filed a statement denouncing what they saw as the existing biosimilar provision's twelve years of “market exclusivity,” finding the lack of distinction between data and market exclusivity in the law ambiguous enough for attack. This has reignited an impassioned debate about the biosimilars provision in President Obama’s 2010 Health Reform Law: did the legislative drafters intend to grant pioneer biologics developers twelve years of data exclusivity, or of market exclusivity, or of both? Yet according to Aggarwal, biologics companies and biosimilars companies are not making strategic business decisions based on the period of data exclusivity, market exclusivity or any non-patent exclusivity. They are making decisions based on the science.
Will science rule the day?
As a scientist by training, Aggarwal thinks we are ready to create biosimilars that will meet all parties' stringent criteria. He sees labs using sufficient techniques and analytical methods to perform reasonable pharmacokinetic/pharmacodynamic (PK/PD) studies and sufficiently characterize the relevant proteins and their functions. “There are two schools of thought: one that you cannot say A is similar to B and thus interchangeable; and one that yes, based on available analytical methods, you can say that. Based on my hands-on background in the lab, I am in the latter school of thought.” According to Dr. Aggarwal, “the tide is turning” for biosimilars; we just need to create a legislative pathway that is in line with clinical and scientific data. “There is a market for biosimilars, but we have to create a reasonable legislative pathway that is not biased toward whichever lobbying group has more of a voice on Capitol Hill.” Given the range of concerns expressed by regulators and payers, the future of the biosimilars market depends on Aggarwal being right.