With the election over, many expect to see a framework for guiding biosimilars to market. But with so many issues remaining to be overcome, progress may be slow.
Abstract
With the election over, a clear framework for guiding follow-on biologics to market may soon emerge. But difficult issues of cost, timing, and even terminology are keeping innovators and generic rivals on opposite sides of the fence.
Last, spring, Alison Lawton, senior vice president of regulatory affairs at Genzyme received surprising news from the U.S. Food and Drug Administration.
Rather than approve a larger-scale version of the company’s own alglucosidase (Myozyme), a biologic used to treat Pompe disease, the agency decided that the drug-maker would have to submit a separate biologics license application. The reason? The FDA ruled that a larger-scale version made at a different manufacturing site should be considered a different product, because of small differences in chemical structure.
The move underscored the complicated debate over the process to be used by regulators to approve follow-on biologics. The FDA’s decision in the Genzyme case clearly suggested the agency’s reluctance to approve follow-on biologics, sometimes called biosimilars, without sufficient clinical data to prove that the new version is at least as safe and effective as the original — even if there are only slight differences in compounds from the same manufacturer. In other words, the decision exemplified the case-by-case approach the agency is taking toward follow-on biologics, even in a situation where the same company makes both versions of a treatment.
“Was this a [case of a] new company trying to understand the product? No. We’re the innovator. We have a tremendous amount of experience with this product. Not just the manufacturing, but understanding the biochemical structure and activity,” says Lawton. “We identified small differences in the carbohydrate structure. We provided a lot of information —we provided additional clinical data, although the data were limited because the number of patients was small, given that this is a rare disease. And the FDA struggled with whether this was sufficient. In the end, they weren’t comfortable. And so the agency set a higher hurdle.
“This kind of situation may not occur for every product — some are more simple, while others are more complex. But I think it does send the message that if there’s even a slight question that the FDA needs answered in order to make an approval decision,” she says, it will mean that the manufacturer will have to submit more clinical data.
“Without question, it’s important to have a law passed in the United States so we can start the process moving,” says Henry Grabowski, PhD, at Duke University.
TUG OF WAR
Of course, the dilemma that Genzyme faces may well be an unusual twist, given that most approval applications submitted to the FDA are likely to be filed by a company that is not the innovator. Nonetheless, the decision illustrates the ongoing tensions and frustrations over the lack of a specified framework — or regulatory pathway — to guide the agency and manufacturers in getting follow-on biologics to market.
Despite swelling healthcare expenditures that have helped to focus attention on the growing number of pricey biologics arriving in hospitals, clinics, and physician offices, a definitive regulatory pathway for biosimilars does not appear to be close to emerging in the United States. The reason is that most biologics are regulated by the Public Health Service Act, which has no provision for follow-on biologics in the same way that the Food, Drug and Cosmetic Act makes it possible for approvals of generic versions of small-molecule compounds. Although Europe adopted a framework three years ago, Congress has so far failed to coalesce around any of the three different bills that have been introduced by members of the Senate and the House of Representatives.
“I think things are moving faster in the European Union, but as a result, we have a model across the ocean,” says Duke University Professor of Economics Henry Grabowski, PhD, who directs the university’s pharmaceuticals and health economics program. “Without question, though, it’s important to have a law passed here in the United States so we can start the process moving. Of course, it will take a while before we see big savings — at least, a few years.”
The failure to move faster reflects substantive differences among numerous parties looking either to make or save money — biotech and generic drugmakers, insurers and managed care organizations, large employers and unions, universities and venture capitalists, and patient advocates and consumer groups. And their behind-the-scenes tug of war over an issue that is highly complicated has, for more than a year, made it difficult to find a compromise.
One explanation for the logjam has been the backdrop pertaining to drug safety. There may be nearly universal agreement that the U.S. healthcare system is badly broken, or at least in need of serious reform, but for some, the debate over speeding regulatory approval of follow-on biologics is not only about cost.
“Look at heparin, which has helped the pendulum swing again” toward safety and away from speedy approvals, says Linda Horton, a partner at Hogan & Hartson, in Washington, and former director of international policy at the FDA. “There is maximum sentiment for protecting Americans from being harmed. The idea that there should be a priority for giving regulatory shortcuts doesn’t match up in the eyes of the Congress.”
Timing also has played a prominent part in the ongoing inability to pass legislation. Even though all three previously mentioned bills were introduced in Congress by the early part of this year, the presidential election and the faltering U.S. economy managed to push health-care costs down the list of priorities and distracted Congress from negotiating an acceptable compromise. Ironically, the delay persisted even as BIO, the biotechnology industry trade group, began pushing for a resolution over concerns that, according to Congressional sources, the next president would be less sympathetic to industry arguments.
Nonetheless, as the presidential election becomes history, nearly everyone involved in the effort to provide the FDA with a pathway believes that a bill can be passed sometime in 2009. “The timing has been challenging,” says Jim Greenwood, BIO’s chief executive officer. “It’s difficult in an election year to get anything done on a bipartisan basis. The closer you get to an election, the less inclined Congress becomes to taking on a controversial issue. But if continued fighting postpones passage by years, then everyone loses.”
“NO REASON TO WAIT”
Indeed, the pressure to pass legislation is growing rapidly. The sour economy may have surpassed healthcare as one of the most pressing problems confronting the country, but healthcare costs continue to rise and, as a result, the issue has certainly not receded very far into the background. “There is no reason to wait,” says Kathleen Jaeger, president of the Generic Pharmaceutical Association, the industry trade group. “What needs to happen is that we should get a bill that offers a consensus on being able to get affordable medicines to consumers sooner rather than later.”
“The problem is that people get tangled up in the terminology,” believes Sara Radcliffe at BIO, the industry trade group. “There’s no regulatory definition for interchangeability, and people use it in many different ways.”
Not surprisingly, those pushing hard for legislation to create a pathway for the FDA have floated various estimates for cost savings. For instance, the Pharmaceutical Care Management Association, the trade group for pharmacy benefit managers, released a study suggesting a regulatory pathway for follow-on biologics could save Medicare Part B an estimated $14 billion over the next 10 years. And a study by Insmed — a biotech that this year became the first U.S. company to demonstrate bioequivalence for a follow-on biologic — estimated $67 to $108 billion in savings over 10 years. Insmed predicts $236 to $378 billion in savings over 20 years for versions of the top 12 categories of biologics with patents that either have expired or will expire soon.
Perhaps the most significant estimate on cost savings, however, was issued last June by the U.S. Congressional Budget Office, which found that the Senate biogenerics bill — the other two proposals came from the House — would reduce total expenditures on biologics in the United States by $25 billion between 2009 and 2018. Over that 10-year period, savings would equal roughly 0.5 percent of national spending on prescription drugs, valued at wholesale prices. Moreover, the bill would reduce budget deficits — or increase surpluses, depending on your point of view — by $6.6 billion over the same period.
POINTS OF DEBATE
Savings aside, three key points have been stumbling blocks ever since the issue emerged on the regulatory radar screen. The first is whether follow-on biologics will cause immunogenicity, or production of antibodies that may cause a follow-on biologic to be ineffective, if not unsafe. This concern is reminiscent of the argument made by brand-name pharmaceutical companies that, in certain cases, a generic product may be similar to the original drug but lacks bioequivalency, which may result in an undesirable reaction in some patients.
As Secretary of Health and Human Services Michael Leavitt pointed out in a letter last year to Massachusetts Democratic Sen. Ted Kennedy, chairman of the Senate Committee on Health Education, Labor, and Pensions, “The impact of immunogenicity can be serious and life threatening.” He added that, in most cases, follow-on biologic products will not be the same as the “reference product” and their relationship to the innovator drug should not be equated to that of a generic chemical compound to a brand-name medication. Leavitt went on to say that, “In addition, even if a follow- on protein product is determined to be biosimilar to the reference product, immunogenicity could preclude patients from switching from one product to another.”
This leads to the second point of debate, interchangeability, or the extent to which a follow-on biologic can be substituted for the brand-name medication. Citing safety concerns raised by the prospect of immunogenicity, the biotech industry has balked at the possibility that follow-on biologics may be administered as readily as a generic pill for cholesterol is prescribed by a physician and encouraged by insurers.
“The problem is that people get tangled up in the terminology,” says Sara Radcliffe, vice president for scientific and regulatory affairs at BIO. “There’s no regulatory definition for interchangeability, and people use it in many different ways. Is it therapeutic equivalence? A doctor switching medications? Or is it substitutability at the pharmacy level? Even if two products are found to be biosimilar, it’s possible that any clinical differences would still be felt by the patient. In our view, patients should be given the biologic expressly prescribed by their physicians.”
“If the FDA doesn’t come up with interchangeability criteria —and I estimate that it will take some time — you may have to market a product as a follow-on biologic, and not as a generic substitution,” says Steve Russek, chief clinical officer at Accredo, the specialty pharmaceutical arm of pharmacy benefit manager Medco Health Solutions. “And so, ‘generic’ may not even be the appropriate term for a product.”
The third — and a particularly contentious — issue, though, is data exclusivity. This refers to the length of time during which a competitor cannot rely on the FDA’s prior finding of safety and effectiveness of an innovator product if seeking approval of its similar product. Biotechs favor a lengthier period and were ecstatic when Democratic Congresswoman Anna Eshoo, of California — where many biotechs and venture capitalists are based —introduced a bill that offers brand-name products 12 years of exclusivity, plus an extra two years for a medically significant innovation. According to one Congressional source, there is substantial support for offering extra incentives for additional indications.
THE BIGGEST HANGUP
For generic drugmakers, the core issue is the extent to which they would be prevented from developing their own versions of biologics. Not surprisingly, the Generic Pharmaceutical Association, which prefers only a few years of data exclusivity, labeled the length of time in the Eshoo bill “unjustifiable,” and argued that it would be “decades” before consumers would see affordable biologics. Their big concern is that patents will be wielded as an instrument in the same way that loopholes in the Drug Price Competition and Patent Term Restoration Act of 1984, commonly known as the Hatch-Waxman Act, were exploited to delay generic versions of brand-name drugs.
In fact, the Federal Trade Commission is examining the issue with an eye toward sorting out competition, incentives, and patents. The FTC, of course, has been laboring to derail so-called “pay-to-play” between brand-name drugmakers and generic rivals. So the agency is holding workshops to figure out ways “to strike the right balance between regulatory exclusivity periods and competition to spur development” of follow-on biologics.
“There’s no question that the biggest hang up is over intellectual property rights and data exclusivity,” says Duke’s Grabowski. “The branded industry wants fairly long data exclusivity, while generic manufacturers are pushing for something similar to Hatch-Waxman —maybe five years. The thinking may be that, if they wait long enough, the political winds will shift and they may get a bill more to their liking. And I think it is possible you’ll get a Congress that’s more sympathetic to biogenerics.
“Although, some Democrats have innovative biotechs in their districts that want a bill that preserves innovation. Look at California and Massachusetts, “ he continues. “To be honest, I think there may be a little shortsightedness here. You need a healthy innovative industry to have a generic industry. But again, this will all take time. Remember, the FDA tends to move slowly, it’s understaffed and, more recently, it’s being very cautious about safety. And so I think the agency will need to carefully follow guidelines and I think they will go case by case.”
One FDA official declined to be specific about particulars. But Rachel Behrman, the agency’s associate commissioner for clinical programs, cautions that the FDA is, indeed, attempting to move very deliberately as it weighs the proper course to pursue. And for that reason, she suggests the large cost savings that are projected should be considered as just that — nothing more than estimates.
“Remember that many of the projections have been based on the generic drug model, which includes switching” between drugs, she says. “But it’s not likely, scientifically speaking, to be the model that might happen.”
It didn’t matter who won the election
Both Sens. John McCain and Barack Obama have favored the creation of a regulatory pathway for follow-on biologics, but during the presidential campaign, neither offered details of a plan to achieve that end. The only hint of a direction that President-elect Obama may support can be gleaned from a June 27, 2007, voice vote by the Senate Committee on Health, Education, Labor, and Pensions approving the Biologics Price Competition and Innovation Act. Obama was a member of the committee.
A Lehman Brothers strategic analysis, officially issued Sept. 15, 2008 — ironically, the same day the securities firm declared bankruptcy — predicted that congressional action on follow-on biologics would be part of a larger effort by Democratic leaders to reform healthcare in general in 2009. Lehman predicted that passage of a regulatory pathway would occur by 2010.