LegiStorm

Summary:

A biological product, or biologic, is a preparation, such as a drug or a vaccine, that is made from living organisms. Compared with conventional chemical drugs, biologics are relatively large and complex molecules. They may be composed of proteins (and/or their constituent amino acids), carbohydrates (such as sugars), nucleic acids (such as DNA), or combinations of these substances. Biologics may also be cells or tissues used in transplantation. A biosimilar, sometimes referred to as a follow-on biologic, is a therapeutic drug that is similar but not structurally identical to the brand-name biologic made by a pharmaceutical or biotechnology company. In contrast, a generic chemical drug is an exact copy of a brand-name chemical drug. Because biologics are more complex than chemical drugs, both in composition and method of manufacture, biosimilars will not be exact replicas of the brand-name product, but may instead be shown to be highly similar. The Food and Drug Administration (FDA) regulates both biologics and chemical drugs. Biologics and biosimilars frequently require special handling (such as refrigeration) and processing to avoid contamination by microbes or other unwanted substances. Also, they are usually administered to patients via injection or infused directly into the bloodstream. For these reasons, biologics often are referred to as specialty drugs. The cost of specialty drugs, including biologics, can be extremely high. In April 2006, the European Medicines Agency (EMA) authorized for marketing in Europe the first biosimilar product, Omnitrope, a human growth hormone. The EMA lists a total of 40 biosimilars on its website; 2 products were refused authorization and 3 were withdrawn, leaving a total of 35 biosimilars authorized for the European market. The introduction of biosimilars in Europe has reduced prices for biologics overall, in some cases by 33% compared with the original price of the brand-name product. For one drug in Portugal, the price reduction was 61%. In contrast, the pathway to marketing biosimilars in the United States has had several barriers. FDA approved Omnitrope in June 2006, following an April 2006 court ruling requiring the FDA to move forward with consideration of the application. At the time Omnitrope was approved, FDA indicated that this action “does not establish a pathway” for approval of other follow-on biologic drugs and stated that Congress must change the law before the agency can approve copies of nearly all other such products. Four years later, in March 2010, Congress established a new regulatory authority for FDA by creating an abbreviated licensure pathway for biological products demonstrated to be “highly similar” (biosimilar) to or “interchangeable” with an FDA-licensed biological product. The new authority was accomplished via the Biologics Price Competition and Innovation Act (BPCIA) of 2009, enacted as Title VII of the Affordable Care Act (ACA, P.L. 111-148). Congress authorized FDA to collect associated fees via the Biosimilar User Fee Act of 2012 (BsUFA, P.L. 112-144). The five-year biosimilars user fee authority was set to expire on September 30, 2017. Congress reauthorized the biosimilar user fee program via the Food and Drug Administration Reauthorization Act of 2017 (FDARA, P.L. 115-52). As more biosimilars enter the U.S. market, analysts expect to see U.S. price reductions similar to those that have occurred in Europe. However, of the seven biosimilars approved by FDA, sales of five biosimilars have been delayed, or (allegedly) adversely impacted, by actions of the brandname manufacturers. Three biosimilars (Erelzi, Amjevita, and Cyltezo) have had their marketing launch delayed by patent infringement lawsuits filed by brand-name manufacturers. In addition, Pfizer has sued Johnson & Johnson (J&J) alleging that J&J has entered into anticompetitive contracts with insurers that prevent coverage of Pfizer’s biosimilar (Inflectra), a less expensive substitute for J&J’s best-selling biologic (Remicade). The alleged anticompetitive practices would be expected to have a negative impact on another recently approved biosimilar (Renflexis). The high costs of pharmaceuticals in general—and biologics in particular—has led to an increased interest in understanding the federal government’s role in the development of costly new therapeutics. In the case of six of the seven biosimilars approved by FDA, the associated brand-name drug was originally discovered by scientists at public-sector research institutions. Several of these brand-name biologics (Remicade, Enbrel, Humira, Avastin) are among the topselling drugs in the United States and worldwide.