The Baby, Biosimilars, and the Bath Water

You’ve heard the expression, “throwing the baby out with the bath water.” It refers to the problem of unintended consequences of our actions.

On December 14, Texas District Court Judge Reed O’Connor decided that when he ruled that the individual mandate of the Patient Protection and Affordable Care Act (ACA) is unconstitutional, the entire Act is also invalid. If affirmed, this doomsday scenario may well mean that all of the provisions of the Act are to be repealed.

Texas District Court
Texas District Court Judge Reed O’Connor

One crucial piece of legislation incorporated into the ACA is the BPCIA—the Biologics Price Competition and Innovation Act, on which the biosimilar regulatory pathway is founded. Yes, if the appeals are upheld and the US Supreme Court affirms the decision, the last 7 years of progress made in creating a competitive environment for biosimilars could be jeopardized.


President Trump has stated to reporters that he was happy with the decision of the Texas District Court and hopes that the Supreme Court will not overturn it. His perspective might be different if he thought through the full implications of the action. The repeal will directly affect the 17 million people who receive their health insurance through the ACA, either through the exchanges or expansion of state Medicaid programs.

The unintended consequences of a full repeal of the ACA without any comparable replacement will affect not only work done in biosimilar development and regulation in the US, but also by the Centers for Medicare and Medicaid Innovation (i.e., accountable care organizations and value-based contracting) but closing the Medicare part D coverage gap, the Patient-Centered Outcomes Research Institute (to conduct comparative-effectiveness research), and work done to advance prevention in public health.

In fact, many of the provisions of the ACA are supported by broad consensus. For one, discriminating against people with preexisting conditions, through either exclusions or higher rates. Although the Republicans have not credibly defended this concept by their past actions, they do profess to believe in it.

The potential benefits of a value-based health system is another area where all political parties seem to agree. Hope springs eternal that outcomes-based payments, reimbursements that include shared savings, and bundled or global contracts will improve our care quality and efficiency.


Those who understand the intent of the BPCIA believes that it will result in significantly lower drug costs, at least in the long term. A spokesperson for the Association for Affordable Medicines told BR&R in an E-mail, “As Congress and the Courts respond to last week’s ruling, it’s important to remember that the biosimilars pathway remains one of the least controversial aspects of the Affordable Care Act. All stakeholders agree on the need to maintain this critical aspect of the law. Without it, patient access to biosimilar medicines would be jeopardized.”


Just last week, the trade association America’s Health Insurance Plans applauded the Trump administration for releasing draft guidances that begin moving transitional drugs to biosimilar status in 2020 and for its efforts to reduce biologic drug pricing in general.

Of course, a number of reasonable scenarios may yet occur to prevent the loss of our baby. The Texas District Court ruling may be overturned on appeal, the Supreme Court may overturn it outright, or the Supreme Court may apply it specifically to the individual mandate (allowing all other ACA provisions to remain). The process has already begun—attorneys general from 17 states filed on December 17 for an expedited appeal by the Fifth Circuit Court of Appeals.

The Trump administration has staked much on its promises to improve drug access and lower pharmaceutical costs. However, the President’s positive comments on District Court ruling directly conflict with the actions of the Department of Health and Human Services (e.g., Secretary Alex Azar and FDA Commissioner Scott Gottlieb).

If the worst-case scenario comes true, which I personally believe is unlikely, will new legislation have to be proposed and enacted to preserve our ability to evaluate and approve biosimilar agents? Will the FDA be prohibited, in the meantime, from progressing with existing biosimilar drug reviews? These questions must be considered, because our ideas of what is realistic are being sorely tested. This baby’s health must be protected from this ruling’s unintended consequences.

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