US Healthcare Reform: A Legislative Pathway for Biosimilars Will Spur Growth—and Present New Challenges

Given the complexities of biologics patents, the bill outlines a process for patent certification before patent infringement action.  Biosimilar applicants will know in advance exactly which patents will be referenced by the originator in a dispute.

February 2015 | by Dr. Benjamin Warner

In March 2010, in passing the US healthcare reform bill, Congress created a legislative pathway for biosimilars and follow-on biologics.  It is meant to increase patient access to expensive biologics, and it will likely spur growth in the biosimilar industry over the next decade, even as it helps to lower health care costs.  The Congressional Budget Office estimates that over the next decade, the legislation will reduce direct spending on biologics by $10 billion in Medicare Part B alone.

This “Biologics Price Competition and Innovation Act of 2009” directs the Food and Drug Administration to develop regulatory guidelines and put in place a plan to develop guidelines and outline the review process by October 1, 2010.  Given the time required to develop guidelines and approve products, these guidelines are more likely to impact regulatory strategies of companies launching post 2013.  Several companies, however, including Teva and Merck, are likely to adopt the full biologics license approval (BLA) process to launch follow-on biologic products before then.  This note summarizes the major elements of the legislative pathway, including areas that remain ambiguous, and draws implications for originators, biosimilar companies and payors.

Major Elements of the Biologics Price Competition and Innovation Act

The bill attempts to balance positions of originator biotech and biosimilar companies.  Certain elements, such as 12-year data exclusivity and clinical trial requirements, are originator-friendly, while other provisions, such as interchangeability and the patent certification process, are biosimilar-friendly. In this note, we discuss five major elements of the legislation: regulatory pathways, the interchangeability provision, the originator exclusivity period, patent litigation and Medicare Part B reimbursement.

Regulatory Pathways for Biosimilars

Overall, the guidelines suggest that biosimilar manufacturers will face a clinical burden of proof similar to what is now required by the European Medicines Agency (EMEA). These guidelines are for biosimilars of products approved through the BLA process. Biosimilars of some older biologics, such as human insulins and human growth hormones, can be approved under the 505(b)(2)5 process.  Unlike in the case of small-molecule generics, each biosimilar applicant will pay a user fee, as they would for a new drug application.

 

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