Featured Health Business Daily Story, Jan. 11, 2012

2012 Outlook: With Biosimilars Guidance Expected Soon, Payers Need to Plan Benefit Strategies

Reprinted from SPECIALTY PHARMACY NEWS, a monthly newsletter designed to help health plans, PBMs, providers and employers contain costs and improve outcomes related to high-cost specialty products.

By Angela Maas, Managing Editor
January 2012Volume 9Issue 1

Multiple sources tell SPN that the release of biosimilars guidance is imminent, but as of SPN’s Jan. 3 deadline, the expected guidance had not yet been issued. The FDA, though, last month released proposed recommendations for a biosimilars user fee program that echoed those under the Prescription Drug User Fee Act (PDUFA).

Gillian Woollett, Ph.D., vice president at Avalere Health LLC, says the FDA “has promised to soon publish three draft guidances on biosimilars.…These guidances will mark a step forward for the agency as it seeks to implement an abbreviated approval pathway for biosimilars, authorized as part of health care reform.”

Woollett says Avalere expects the documents to:

  • Demand a “strong scientific core to all applications,” but also reduce requirements for preclinical and clinical studies before a biosimilar is licensed.

  • Require postmarket commitments.

  • Not contain details on interchangeability.

Stephen Cichy, senior vice president of managed care sales, marketing and product development for BioScrip, Inc., tells SPN that “initial draft guidance is expected to be general and directed to providing preliminary guidance regarding development programs for proposed biosimilar biological products…and related issues.”

“The story on biosimilars may be less about the legislative pathway to allow biosimilars onto the marketplace. The model for biosimilars may be more driven by the sheer number of biotech products set to come off patent,” he says. According to Cichy, estimates show that drugs with “as much as $40 billion of net sales are forecast to come off patent over the next nine years.”

Products that potentially may be impacted as early as 2013 include multiple sclerosis therapy Betaseron (interferon beta-1b) and multiple growth hormone products, he says. “Other notable products that are scheduled to come off patent include [anti-inflammatory drug] Enbrel as early as fiscal year 2014 and [multiple sclerosis drugs] Avonex and Rebif in 2015.”

Cichy says that it’s “possible that certain competitive pressures could begin to surface as early as this year…that could hint at new service models.”

Randell “RJ” Correia, Pharm.D., senior vice president of pharmacy services for OptumRx, tells SPN that he doesn’t expect these new therapies to have an impact until 2014.

Helen Sherman, Pharm.D., chief pharmacy officer of pharmacy services for RegenceRx, agrees. “2014 seems to be when we’ll see the first biosimilar,” she tells SPN. She says she doesn’t have any “specific information on what the [initial] products will be, but they’ll likely be products already out in Europe,” such as epoetin and filgrastim.

As for the guidance itself, “it will probably be very drug-specific as to how the agency evaluates” the products, she says.

Look to Other Approvals

Sherman notes that “some of the products [on the U.S. market] with a biologic component have been approved through the small-molecule pathway,” a New Drug Application, rather than a Biologics License Application used for large-molecule drugs.

For example, the anticoagulant heparin was approved as a small-molecule drug, and then Lovenox (enoxaparin) was approved through the same pathway. “Because of this precedent, generic enoxaparin was approved as a small molecule,” she explains.

“Health plans and health care professionals are going to need to pay attention to how a drug is approved — which they haven’t had to do before — to understand how interchangeable biosimilars are.” They need to take “a closer look,” she says, at follow-on medications with a biologic component approved through an Abbreviated New Drug Application (ANDA).

When the FDA approved generic enoxaparin, “lab testing was accepted” as part of the ANDA, but Europe required the drug to go through clinical trials, Sherman says.

The FDA likely will require biosimilars to undergo “some level” of clinical trials, she says, but it will need to address questions of how much is enough, how long of a study duration is needed and whether the intermediate end point is appropriate.

With biosimilars, “the drug production process and delivery devices may be an important managed care consideration for many products,” notes Cichy. “Because of this, generic substitution as we do today with traditional products may not occur.”

In addition, cautions F. Randy Vogenberg, Ph.D., a principal with the Institute for Integrated Healthcare, “product cost differential will not meet the high cost savings expectation nor solve the extreme dollar spend situation on biologic products versus traditional drug products in existing insurance benefit products.”

Sherman points out that when people view biosimilars as “generic biologics,” that “generic” evokes “certain assumptions in benefit design. The most important thing to know is that a generic small-molecule drug is the same product as the innovator drug. But a biosimilar is similar but not exactly the same as [the innovator] biologic.”

FDA Proposes Four Types of User Fees

In the meantime, on Dec. 7 the FDA released proposed recommendations for a biosimilar user fee program that would be in effect for fiscal years 2013 through 2017, as ordered by the Biologics Price Competition and Innovation Act of 2009, part of the health reform law. The agency has until Jan. 15 to make changes before it submits the document to Congress.

The FDA proposed the following types of fees:

  • Biosimilar product development fees;

  • Marketing application fees; and

  • Establishment and product fees.

Biosimilar product development fees would include both initial and annual fees for biosimilars in development. In addition, the FDA expects that the cost of reviewing a biosimilar application will be similar to the cost of reviewing a Biologic License Application, so the agency proposes that the marketing application fees for biosimilars would be equal to the fees under PDUFA, minus any biosimilar product development fees.

Similarly, the FDA estimates that the complexity and effort it will need to devote to manufacturing oversight and postmarketing safety for biosimilars would be comparable to that of biologics, so the establishment and product fees would be equal to the same fees under PDUFA.

The agency also proposed holding biosimilar initial advisory meetings and biosimilar product development meetings to help manufacturers develop these products.

The Biotechnology Industry Organization and Pharmaceutical Research and Manufacturers of America both expressed their support of the proposals.

The agency is taking comments on the recommendations until Jan. 6.

Manufacturers Are Preparing for Biosimilars

Manufacturers certainly have been preparing for the entry of these drugs as competitors to many high-cost therapies, and various companies have been making deals to work together. In December alone, deals to collaborate on biosimilars development were struck between Amgen Inc. and Watson Pharmaceuticals Inc., as well as Baxter International and Momenta Pharmaceuticals.

Woollett says that the expected guidances should “provide a perfect context in which to evaluate the commercial value and likely significance of the many partnerships, licensing and strategic agreements that have been announced recently.”

View the proposed recommendations for the user fee program at http://tinyurl.com/7knqqph.

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