Featured Health Business Daily Story, Dec. 22, 2014

Stakeholders Call for FDA Guidance on Biosimilars, Tout Potential Cost Savings

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
December 2014Volume 11Issue 12

With prices for biologics eating up more and more of payers’ budgets, competition in the form of biosimilars may be one of the best ways to counter the concerns. That was the main message expressed by speakers at the Dec. 4 meeting Rx Innovation: A Discussion on Biosimilars, Patient Access & Affordability that was hosted by The Hill and sponsored by Express Scripts Holding Co.

That same day, Express Scripts unveiled its projected savings due to biosimilars:

  • The two drugs with biosimilar applications at the FDA now — versions of Neupogen (filgrastim) and Remicade (infliximab) — could bring about $22.7 billion in savings over their first decade on the U.S. market. Biosimilar Neupogen is projected to make up $5.7 billion of that total, with biosimilar Remicade responsible for $17 billion. The estimates assume a 30% discount in price for the biosimilars and use by 30% of patients new to therapy rather than people switching over from the reference products.

  • If the FDA approves biosimilar versions of 11 selected biologics, including blockbusters such as Avastin (bevacizumab) and Herceptin (trastuzumab), an estimated $250 billion in savings over the next 10 years could be realized.

Speaking at the conference, Sen. Richard Blumenthal (D-Conn.) maintained that biosimilars are a “tremendously important and profoundly significant subject to the future of medicine in the U.S. and to our health.” The government, he said, “has the obligation to establish rules for the road,” particularly on approval and reimbursement of biosimilars. “Right now, there are no rules. There are only draft guidances, not final guidance,” he noted. “FDA has the obligation to move as quickly as possible” on the issue of approval. On reimbursement, “CMS has the obligation likewise to move ahead.”

Rep. Gus Bilirakis (R-Fla.) agreed. “It benefits companies, the FDA and most importantly the patient if the FDA provides clear guidance on the issue,” he maintained. “Too often, the regulatory structure gets in the way of innovation,” as does the “risk-averse nature of the FDA.” Biosimilars, he noted, “have had remarkable international success,” and in Europe and Asia have “reduced treatment costs by 40%.…Competition lowers prices. It’s the free market at work.”

Dan Durham, executive vice president for policy and regulatory affairs for America’s Health Insurance Plans, asserted that “biosimilars bring competition,…and you have to have competition to bring value to consumers.…When you don’t have a competitive market,…pharmaceutical manufacturers have the power to set the price. Congress gave them that power; you can’t abuse that.” But now, “you have abusive pricing,” and plans have “no leverage to negotiate with monopolistic pricing.”

Lori Reilly, executive vice president for policy and research at the Pharmaceutical Research and Manufacturers of America, pointed out that “payers have lots of tools” to manage specialty drugs, and “they use these tools extremely aggressively,” such as by placing these drugs on fourth and fifth tiers of formularies. But “you don’t see patients who go to the hospital for open-heart surgery [being told], ‘You need to pay 50% of this.’ Pharmaceuticals are treated differently,” she said. “Are some of these new medicines expensive? Yes, they are,…but they are creating value in the system.”

Innovation Is Needed

Matt Salo, executive director of the National Association of Medicaid Directors, agreed with Reilly that “we do need innovation to get us out of the direction in where we’re going” within the health care system. But the bottom line, he said, is that “Medicaid as a payer is not equipped to be paying prices for the types of things we’re seeing out there like new hepatitis C drugs but also drugs in the pipeline,” such as therapies for cystic fibrosis. Right now, he said, the U.S. is experiencing “a public health crisis. But why is there price gouging going on during a public health crisis?” he asked. “I’m hopeful that biosimilar innovations are going to bring much-needed rationality.…At the end of the day, if the American people say, ‘I’m OK with my tax rates going up to cure everyone with hepatitis C while spending on education is going down,’ then I don’t have a problem [with the high prices for drugs]. But I don’t think that’s going to happen.”

Steve Miller, M.D., senior vice president and chief medical officer for Express Scripts, also urged the FDA to put out guidance that addressed issues including whether indication extrapolation would be allowed, whether the agency would accept international data on these drugs and whether biosimilars could share the generic brand name or have a distinct generic name. He also said it will be important to know how CMS will reimburse for these drugs. “Many biosimilars are administered in a doctor’s office,” said Miller. “So how CMS chooses to reimburse for them will be crucial in their uptake.”

He applauded Celltrion Inc. and Sandoz, Inc. for submitting biosimilar applications to the FDA even though the agency has not released all the guidance it’s said that it would. By doing this, the companies “are forcing the issue.” Miller said he’s “really hopeful” that the FDA would approve these products in 2015. “It’s seven years after Europe, but we’re still getting there,” he said. “There is a potential floodgate of products that can come through the pathway.”

Sally Howard, deputy commissioner for policy, planning and legislation for the FDA, said that the six draft guidances the agency has released so far on biosimilars should help “the industry to understand the data they’ll need to submit to demonstrate biosimilarity.” But while other speakers were calling for the FDA to issue additional guidance in order to speed biosimilars to market, Howard says the agency is of the opinion that “no additional guidance is needed before a product [can be] approved.” That said, “we do anticipate issuing more guidance…in the near future,” she added. “We’re very supportive of this industry.…The way we proceed builds confidence in this industry, this market.…Could we have gotten out our guidances sooner? Yes. Are there guidances we wish we had gotten out? Yes.”

David Gaugh, senior vice president of sciences and regulatory affairs for the Generic Pharmaceutical Association, pointed out that “a draft [guidance] can be a draft forever.” The information in the six draft guidances “gives us the end goal we need to get to.…I think we’ll see several filings in the coming months.”

After the meeting, Miller told SPN that Express Scripts wants “to take in as much information as possible” about biosimilars, and much of that is “through the pharmaceutical companies we’re working with.” He noted that “the No. 1 producer of biosimilar EPO [i.e., erythropoietin] in Germany is Hospira, a Chicago-based company. But they can’t sell that product in the U.S. They’re teaching us a lot about how they got to be No. 1 in Germany. Sandoz and Boehringer Ingelheim are teaching us the same thing.” Pharmaceutical manufacturers are “important stakeholders to us. We’re learning a lot,” particularly about doctors’ acceptance of and patient access to biosimilars.

Reilly talked about safety and efficacy issues, noting that while “Europe has shown that we’ve not seen significant safety concerns [around biosimilars], that doesn’t mean let’s let our guard down.” Durham responded that “safety is paramount for health plans” and pointed to a Journal of the American Medical Association study conducted a couple of years ago showing that among the “drugs approved by the FDA on the condition the companies do post-marketing studies,…40% haven’t even started. Let’s talk about safety.”

Gaugh noted that there are “thousands of drugs approved by the FDA currently out there with adverse events. Are we not concerned about those as well? Why are we focusing on this small class of drugs?”

© 2014 by Atlantic Information Services, Inc. All Rights Reserved.

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