In time for its expected July launch, Celltrion received the FDA’s go-ahead yesterday to market Yuflyma, a high-concentration form of adalimumab. Its nonproprietary name is adalimumab-aaty. The biosimilar’s approval covers the eight main indications shared by the other approved biosimilars for adalimumab:

• Ankylosing spondylitis
• Crohn’s disease (adult and pediatric)
• Juvenile idiopathic arthritis
• Hidradenitis suppurativa
• Plaque psoriasis
• Psoriatic arthritis
• Rheumatoid arthritis
• Ulcerative colitis

This represents Celltrion’s fifth biosimilar approval in the US, and its second immunology biosimilar (after infliximab). Tom Nusbickel, Chief Commercial Officer at Celltrion USA, stated in a press release, ““As a leading global biopharmaceutical company, we are leveraging our unique heritage in biotechnology, supply chain excellence, and best-in-class sales capabilities to expand the availability of high-quality biosimilars for U.S. patients.” As Mr. Nusbickel described recently in an interview with BR&R, Celltrion will be marketing this agent with its own sales force.

Yuflyma is a citrate-free formulation, and it is the third adalimumab biosimilar available in the high-dose concentration (100 mg/mL), the formulation used by four-fifths of patients taking the reference drug.

Celltrion also stated that it is seeking an interchangeability designation for Yuflyma, but that would not be obtained prior to Q4 2024.

Ustekinumab’s principal patents are set to expire in September of this year, and prospective biosimilar makers are lining up to join this next immunology marketplace. However, in a patent litigation settlement announced on May 23, the launch of the biosimilars to Stelara^® may have to wait a bit.

Amgen’s settlement with the reference drug maker Johnson & Johnson (Janssen Biotech) means that it will be able to launch ABP654 “no later than January 1, 2025.” Amgen’s biosimilar is not yet approved, and a 351(k) filing for ABP654 is expected later in 2023.

However, partners Alvotech and Teva expect an FDA decision on its own ustekinumab biosimilar ATV04 by end of this year. Formycon is also anticipated to file its a biologic licensing application for FYB202 in the third quarter of this year (see Table). These dates would suggest a potential initial launch as early as Q1 2024—if Alvotech receives a positive FDA decision. If there is a BPCIA patent suit pending against Alvotech, this launch could be delayed until 2025 as well.

Amgen’s settlement, first reported by Big Molecule Watch, raises the question of whether the other biosimilar contenders will seek settlements prior to marketing their drugs. This may seem eerily similar to what is occurring today with the sequential launches of Humira^® biosimilars.  

The Current Ustekinumab Pipeline

Biosimilar Developer	Name	Stage/Status
Alvotech	AVT04	351(k) Application filed Jan 6, 2023; FDA decision expected Q4 2023
Amgen	ABP654	Phase 3 study completed; multiswitch study for interchangeability completed February 2023
Bio-Thera	BAT2206	Phase 3 study to be completed May 30, 2023
Celltrion	CT-P43	Phase 3 study completed May 2022
Formycon/Bioeq	FYB202	Phase 3 study completed, filing expected Q3-Q4 2023
Samsung Bioepis	SB17	Phase 3 study completed Nov 2022
Neuclone	NeuLara	Phase 1 trial underway, no Phase 3 plans announced

According to the FDA’s Purple Book, the subcutaneous form of ustekinumab was first approved in September 2009. Twelve patents are listed for Stelara, with two expiring September 25, 2023 and the rest expiring from 2032 to 2039 (including an intravenous formulation).

None of the other known biosimilar makers in contention for a first-approved ustekinumab biosimilar have publicly announced active litigation with Johnson & Johnson. This may not be surprising, if litigation is still in the early stages. It seems unlikely that Amgen is the only biosimilar maker sued by J&J under the BPCIA legislation of at least 6 who have completed/are completing phase 3 trials. We’ll be watching for further legal developments.

This is an interesting though unexpected follow-up on our last post, which discussed the apparent downward trend in BPCIA patent litigation of late.

In Other Biosimilar News

Boehringer Ingelheim received approval from the FDA for its autoinjector option for delivering Cyltezo^®. The adalimumab biosimilar will launch July 1, along with several others. This agent will be interchangeable with Humira^® with its 50 mg/mL-dose formulation.

On May 16, Amneal announced that its pegfilgrastim biosimilar Fylnetra^® is now available for prescription. No pricing was announced.

On May 1, Amgen filed a lawsuit in District Court against Sandoz and its former parent Novartis regarding patents on denosumab, sold under the Prolia^® and Xgeva^® brand names. The fact that the lawsuit was filed is not surprising, as BPCIA suits have been routinely filed in the past in an effort by reference manufacturers to delay commercialization of a biosimilar competitor. It is interesting to note, however, the number of newer biosimilar pipeline drugs that are nearing commercialization and the relative paucity of suits.

We reported in December 2022 on a suit by Janssen against Amgen over alleged Stelara^® patent violations by the latter, and on Biogen’s BPCIA patent litigation against Sandoz regarding Tysabri^® patents. In the case of Tysabri, Biogen has 32 major patents listed in the Purple Book, the last of which is set to expire in 2036 and the earliest patent expiration date is June 2024. Yet, the main composition of matter patents have already expired. The less-critical method-of-treatment patents remain.

We turned to our trusted legal resource, Kevin Nelson, Esq, Partner and Intellectual Property Attorney at ArentFox Schiff Law. He pointed out that there were more active suits recently,  but in most cases, the parties have settled. “Settlements of both existing and pipeline biosimilar products have meant less activity,” he told us via Email. “We were seeing an uptick in biosimilar litigation and regulatory proceedings, but a number of those matters settled, and many pipeline products are the subject of settlements. The settlement landscape as a whole as ‘cleared the decks’ a bit in the short term with respect to near-term pipeline products.”

Mr. Nelson emphasized another reason for the relative lack of litigation activity—and it has less to do with patents or the science than with the business case for biosimilars. “Biosimilar manufacturers are concerned about the payment and reimbursement of biosimilars,” he said. “Most biologics are reimbursed under Medicare Part B, and under that scheme there is more of an incentive to administer a higher-cost product, which is the established biologic and not the biosimilar.” 

The prospects for biosimilars may also play a role. For example, current pharmacy benefit manager coverage policies are leaning towards parity coverage for Humira^® and adalimumab biosimilars; this does not provide any incentive for switching to adalimumab biosimilars. As a result, biosimilar uptake will be primarily reliant on patients who have not already received Humira.

The real or imagined implications of new legislative or regulatory policies may have some prospective biosimilar makers reconsidering their commercialization plans. “Manufacturers are unsure of what the exact impact of the Inflation Reduction Act will be on the payment for biosimilars,” said Mr. Nelson. “The Act purportedly seeks to keep the costs of biologic and biosimilar costs down and ensure high reimbursement payments, but many are skeptical and even believe prices will increase.”

The result could be fewer new biosimilar development programs. “If we dig a bit deeper,” he commented, “you will see that the competition is still coming primarily from the same sources. With denosumab, for example, the most recent suit was against Novartis/Sandoz. These are companies for the most part that can compete in light of the challenges that I mentioned.”

To clarify, according to the FDA‘s Center for Drug Evaluation and Research, 104 biosimilar development programs were in process as of first quarter of 2023. This has been growing steadily, but the agency has remained steadfast in the confidentiality of the participants. We do not know how many of these involve biologics without present competition or additional competitors for previously approved biosimilars.

In other words, fewer biosimilar development programs could mean fewer opportunities for BPCIA patent litigation. The latter might seem like a good thing, but not at the expense of the former.  

We first met Thomas Nusbickel in 2014 when he was Hospira’s Head of US Market Access and involved with the commercialization of Hospira’s Retacrit^®, slated at the time to become one of the first biosimilars approved by the FDA. Tom went on to a distinguished career in biosimilars, and he is currently leading the effort to build a US salesforce for Celltrion USA.

Biosimilars Review & Report: Tom, you’ve been in the biosimilar manufacturing industry a long time. Since your early experience at Hospira, how has your interaction changed over time (1) with payers and (2) with your own sales teams?

Thomas Nusbickel: Things have evolved quite a bit since I was working on a biosimilar for Epogen^® and Procrit^®. At that point, we weren’t sure how aggressively payers would control the medical benefit. We saw that occur first with the introduction of Inflectra^® and then with the monoclonal antibodies for the treatment of cancer. We are seeing increasingly aggressive management from payers, even on the medical benefit.

As an industry, we were successful in changing some of the early rules that the Centers for Medicare and Medicaid Services (CMS) had put in place. When we were working on Retacrit^®, CMS was planning to use blended Q or J codes, which would’ve been very damaging for the survival of biosimilars. It would have created a huge advantage for the originators.

Since then, CMS has implemented some changes favoring biosimilar use. We’ve also seen a number of different ways the originator companies have defended their marketshare, including the aggressive defense of Remicade^® [by Janssen] and more of a “let’s go ahead and just move on to other products” approach [by Genentech-Roche antibodies in cancer]. We saw Amgen aggressively defend Neulasta^®, first with Onpro^® but also with pretty aggressive discounting.

We’ve seen a pattern of how the oncology market and the buy-and-bill markets have changed, and learned what you need to do to balance your provider and your payer rebates and try to be as sustainable as possible over time. On April 10, we launched Vegzelma^®, our bevacizumab biosimilar, and things are going well for us.

BR&R: What about on the pharmacy benefit side?

Nusbickel: We haven’t yet seen how aggressively payers will manage a pharmacy benefit biosimilar, despite the launch of adalimumab biosimilars in January. Celltrion will be introducing two biosimilars for the immunology market that will be covered under the pharmacy benefit—Yuflyma^® (adalimumab) and an ustekinumab biosimilar. Yuflyma will be launched in July.

Celltrion will also be introducing what we used to call a “bio-better,” our infliximab subcutaneous formulation, which was filed last year as a 351(a) biologic product, not as a biosimilar. We expect that this may be covered on both the medical and the pharmacy benefit side, as some patients will need to visit the physician office to receive their injection. [Editor’s Note: Based on a Q4 2022 filing, an FDA decision should be expected in Q4 2023].  

Why Build a US Sales Team? Why Now?

BR&R: Celltrion is heavily invested in its biosimilar pipeline, including candidates for a number of high-profile biologics (like Eylea, Stelara, and Prolia). How great a factor was this in the decision to seek an in-house sales team for the US?

Nusbickel: Yes. The founder of Celltrion, who just recently returned as chairman, was evaluating the company’s growth and growth potential. He looked at where we needed to be most successful. And that was the US market, which is the largest global market.

We’ll be launching these 3 new biosimilars and the new subcutaneous formulation of infliximab in late 2023 or 2024, and we’ll have 11 products on the market by the end of 2025. Based on this growth, the company decided to build its own direct sales capability in the US.

I’ve built my team based on the capabilities that I knew that we needed to be successful with biosimilars. The critical functions we needed to establish included understanding the customer and payer data, being able to segment the various markets and decide where we’re going to play, and choosing how to manage average sales prices, rebates, and discounts to providers and payers.

For the oncology market, we decided to find really experienced, successful oncology salespeople. We put a small team out in the field. The early results are encouraging, and we’ve been introducing Celltrion to this new market segment.

BR&R: When you’re building a biosimilar accounts team, how does that differ, if  at all, from building a team for a new brand?

Nusbickel: There’s a different capability. Biosimilars are pretty well accepted today by oncologists, so you’re not selling clinically at all. You have a medical affairs department that  can address any medical questions. Instead, you’re looking for people who understand the individual customer and can close contracts.

With immunology biosimilars, many of the physician specialties have less familiarity than they have with oncology biosimilars. As a result, we’ll need to significantly educate providers and patients. For both brand drugs and biosimilars, it is important that the customer-facing person understands access and patient services to make sure that a patient and a customer can access the drug with minimal burden at an affordable cost. It’s extremely important to invest in the right salespeople who are trained to problem solve customer access challenges.

BR&R: Have you been prioritizing biosimilar experience when hiring for your team, or are you educating them about biosimilars once they are on board?

Nusbickel: On the oncology side, we had a mix of both. A lot of people have started selling therapeutic oncology drugs, but all except maybe one had some experience with biosimilars.

There aren’t many immunology biosimilars out there today. So, we seek reps who have relationships with the large practices, the customers, and also have some familiarity with selling in this arena.

BR&R: How steep is that learning curve?

Nusbickel: It’s teachable, but with oncology, we had a more limited amount of time to build a team. We wanted people who didn’t need too much training.

If a drug has been on the market for a couple of years and has faced competition, salespeople will be mostly dealing with the following general questions: What does the payer coverage look like? Can a patient access the drug? What’s the copay? In the last 10 years, those types of market access issues have generally become more important parts of how a sales rep sells. The clinical sell, obviously, is still important in some areas, but you need to have good market-access skills.

People who have a good sales record in the immunology sector, selling Enbrel^®, Humira^®, and some of the other competitor drugs, certainly have a leg up in terms of our interest. We can teach the biosimilar access piece of it, particularly because this will not be, for the most part, a contracted situation. The contract is with the pharmacy benefit manager or with the integrated delivery network.

BR&R: You’ve mentioned one significant previous challenge, rapidly developing the field force. Are there any environmental factors working in your favor to help you assemble the talent you need, from the ground up?

Nusbickel: We’ve been making good progress finding good people and getting them hired. On the other hand, the originator companies have been reducing their sales forces, because their drugs are going off patent and encountering biosimilar competition. The combination of Celltrion having an exciting pipeline and the originator’s revenue forecasts has made it possible for us to find talented personnel and bring them on board.

BR&R: What do you think is the right size for Celltrion’s salesforce?

Nusbickel: Before we know that, we’ll need to see where we get Yuflyma coverage. We’ve made our bids for 2023, and we’re still in the running with the formularies for the three large PBMs, for some of the smaller plans, and then some IDNs as well.

We’re calculating how many people we would need if we were able to access 100% of the business, and where we would place them. At this time, most of the PBMs have been slow walking their formulary coverage decisions, and we probably won’t have a good idea until very close to July 1, when we intend to launch Yuflyma. We wouldn’t put people out there in a specific geographic area selling Yuflyma if we don’t have access to a major number of lives there.

The other consideration is the infliximab subcutaneous launch, coming in the first quarter of next year. We need to establish relationships with these key customers and confidence in Celltrion first to be successful in marketing our products.

The Pfizer–Celltrion Marketing Agreement

BR&R: Celltrion has a long-standing agreement with Pfizer for the marketing of Inflectra^®. Will plans to introduce Celltrion’s own salesforce affect that agreement?

Nusbickel: Not immediately. This is the type of thing that we will continuously assess with our partners over the next few years.

BR&R: Well, the launch of the subcutaneous formulation of infliximab begs a very interesting question: You’ll be directly competing with Pfizer on the infusible form (Inflectra). That’s going to be an interesting situation.

Nusbickel: We are in the field speaking with customer groups to determine where they see the most promise for our subcutaneous formulation of infliximab.

Where Will the Adalimumab Market be in 2025?

BR&R: Your other point is well taken, Tom. The biosimilar adalimumab launch situation is extraordinarily dynamic right now. July 1 won’t tell you an awful lot about 2024. It will only tell you about what’s happened up to July 1, 2023, which isn’t much. Many decisions will have to be made on the fly, adjusting and readjusting to the situation at hand, while planning for the next round of contracting. Do you view this time as really setting your company up for success in 2024?

Nusbickel: Yes, and not even just 2024; we are  playing the long game with our pipeline products. From now through 2030, I want to have a sustainable organization that’s profitable, building for the future, and continuing to be one of the leading biosimilar companies in the marketplace.

The PBMs have not said publicly when they are likely to delete Humira from their formularies. It is unlikely to happen until the end of 2024. We want to do well with Yuflyma at that time while also building good relationships in preparation for the launch of our next two immunology products and the unique infliximab formulation.

BR&R: Give me your best guess: How many manufacturers will remain in the adalimumab competition in late 2025?

Nusbickel: I’d probably say it’ll be down to four or five. There could be some consolidation, but I can’t see a lot of companies sitting there with a 5% marketshare. It will likely shake out to be four main competitors.

I believe that if some changes can be made to how the pharmacy benefit market works, we can get more biosimilars and have them be more sustainable. The way it stands now, this will be a challenging business, at least until the plans start restricting Humira from the formulary.

BR&R: Tom, what would you say are the most important lessons you’ve learned over the course of your career in commercializing biosimilars?

Nusbickel: Listen to the customers on both the access and the sales side and really make sure that you can align your company perspective as to where you want to play and how you will win. These are the very basic strategic questions that need to be addressed. Choose your spots, be comfortable with your decisions, and don’t go for everything. Make sure that you build a very nimble decision-making process because these markets move much quicker than the brand markets. You need to be able to respond quickly to be successful.

On May 2, The Lannett Company Inc. disclosed that it had filed for Chapter 11 bankruptcy. The company has been working on an insulin glargine biosimilar candidate. On April 4th Lannett reported that its biosimilar insulin had met all primary and secondary endpoints and was not associated with serious adverse events. This was a pivotal clinical trial performed in a double-blind randomized crossover study manner.

The company said that the bankruptcy filing should have no impact on business operations as it pursues its restructuring plan. A filing of a biologic licensing application for its insulin glargine biosimilar would be possible as early as Q3 of this year. In a May 1 press release from the Trevose, Pennsylvania–based company, it stated that “The company is working to complete this financial restructuring transaction by June 18, 2023, and the Company continues to anticipate near-term product launches and significant progress on more specialized technologies and capabilities supporting new product development.”

How will this move affect the company’s commercialization pathway for its biosimilar insulins? A spokesman for Lannett told Biosimilars Review & Report, “The restructuring transactions we announced will significantly strengthen Lannett’s financial position and position us to implement our business plan. We are driving ahead in our efforts to launch the potentially highly-profitable biosimilar insulin glargine and insulin aspart, and anticipate filing the BLA for the biosimilar insulin glargine in calendar year 2023, with a potential launch in calendar year 2024.”

Generic Drug Companies Hitting Hard Times

Lannett cited “continued competitive pressures” on its current portfolio as the major factor in its filing. This comes days after another generic manufacturer, Akorn, announced that it was dissolving the company. Both announcements are discouraging signs for two reasons: First and foremost, generic companies like these are the bulwark against continuing drug shortages in the US, particularly for generics that are decades-old, low-profit medications that are routinely used throughout the health system.

Second, traditionally generic manufacturers like Lannett and Amneal Pharmaceuticals are prime candidates to continue the momentum recently gained by the biosimilar industry, and to produce biosimilars from lower-revenue biologics in the future. For example, insulins are facing heavy competition and great pricing pressures, with unceasing demand. A generic manufacturer producing a new biosimilar insulin may have a good chance of achieving long-term sustainability with its larger portfolio of generic products.  

Yesterday marked two important earnings calls for the adalimumab market, and the results were mixed at best for both manufacturers involved.

As everyone is well aware, 2023 is the year of adalimumab launches, and Amgen’s Amjevita^® was the first to compete with AbbVie’s originator biologic Humira^®. Launched on January 31, the question of how many Amjevita sales have been registered is on the minds of many. The first-quarter earnings presentation was the initial opportunity to understand how well the launch is proceeding and perhaps offer a window into the trend for Amjevita in the second quarter, before the mass launch of competitive products.

As reported by Murdo Gordon, Amgen’s Executive Vice President, Global Commercial Operations, Amjevita sales totaled $51 million from January 31 to March 31. This figure is unimpressive, based on AbbVie’s 2022 Humira revenue of greater than $20 billion, However, the company expects even “lower Q2 sales, as most of the Q1 sales were associated with inventory build.” Amgen indicated that most existing Amjevita sales were associated with integrated delivery networks, not the pharmacy benefit managers. The company is focused on “building demand, patient by patient, IDN by IDN.”

This implies that Amgen will not benefit greatly from its first-entry advantage. The major PBMs’ policy of covering Humira and two or three biosimilars at parity will not be a great motivator for converting share in 2023. With AbbVie’s net price closely mirroring that of Amgen (through either its high WAC or low WAC options), it would seem that lower prices will be needed to move the needle on biosimilar uptake in the short term. If both are covered at parity, providers may not perceive any need to switch from the originator at this time.

The other limiting factor for Amgen is that it does not yet have approval on its high-concentration formulation (which is the formulation utilized by 85% of patients taking Humira). The first biosimilar with a high-concentration formula to launch will be Hadlima^® (Samsung Bioepis/Organon) and Hyrimoz^® (Sandoz). The first interchangeable biosimilar will be Cyltezo^® (Boehringer Ingelheim, but as a low-concentration formulation), and possibly AVT02 (Alvotech/Teva). These biosimilars may launch in early summer.

The adalimumab biosimilar competition has resulted in considerable savings for payers. AbbVie also reported its first-quarter earnings yesterday, disclosing that US Humira sales produced a 26% drop in net revenue compared with the same quarter in 2022 ($2.95 billion in Q1 2023). The savings is due to the competitive need to drop its net price. AbbVie expects continued Humira sales erosion as competition heats up.

In Other Biosimilar News

During its earnings call, Amgen disclosed that it filed its 351(k) biosimilar licensing application (BLA) in February for its biosimilar to eculizumab (reference product, Soliris^®). Soliris is approved for the treatment of adults and children with paroxysmal nocturnal hemoglobinuria, a rare, life-threatening bone marrow disorder. An FDA decision on its product, ABP 959, would be possible in Q4 of this year or Q1 of 2024. This product was approved by the European Medicines Agency earlier this month.

Formycon announced that it had successfully completed its phase 1 and 3 clinical trial program for FYB202, a biosimilar to ustekinumab (Stelara^®), and that it plans to submit its BLA in the third quarter of 2023.

Dr. Niazi, Adjunct Professor of Pharmaceutical Sciences at the University of Illinois and the University of Houston, founded the first US biosimilar company, Therapeutic Proteins (later Adello and Kashiv), and is the founder of Novel351k, as well as a biosimilar advisory company PharmSci. In part 2 of this two-part interview, we talked with Dr. Niazi about the role of artificial intelligence in clinical trials and his views on how the Inflation Reduction Act can improve the prospects for future biosimilar development.

Biosimilars Review & Report: I read a very interesting paper you wrote about artificial intelligence’s role in streamlining the clinical process. Can you give us a little bit of background on that?

Sarfaraz Niazi, PhD: Yes, that’s one of the most exciting developments. About two years ago, Google introduced an AI program called AlphaFold2.

Every time a new batch of reference product or the biosimilar is produced, it can have slight structural differences. But there are two types of differences. One is a posttranslation difference, which is of lesser concern because these attributes are readily tested for similarity. But the other variations coming from pretranslation modifications are difficult to assess. These differences arise due to the inherent thermodynamic instability driven by the atoms’ intramolecular interactions.  

If I can show that a molecule has very little instability and if I have the same primary sequence, which is easy, I can ask, “Why would the three-dimensional structure be different?” And, since it is the 3D structure that produces the pharmacology and toxicology, theoretically, there should be no difference between a biosimilar and a reference product. Unfortunately, however, this novel approach goes against the common wisdom; it will take a while to settle it down.

The challenge was identifying the molecules likely to have more structural variability than others. I’m researching a thermodynamic stability demonstration of biosimilars for which the FDA has provided funding; this is in collaboration with the University of Michigan. Additionally, I am working on creating a new paradigm to establish biosimilarity by modeling all approved therapeutic recombinant DNA products(more than 200). We seek to predict structural variability with several algorithms, including AlphaFold2, based on a neural network, and ESMFold, which is model-based. We were able to classify molecules at high risk and low risk for structural variability.

Before running the evaluations, I perceived that the larger molecules would be inherently at higher risk. But, to my surprise, they are much more stable than simple peptides. So, now we are taking that one step further, testing for similarity in the domain structure.

BR&R: Can you elaborate?

Dr. Niazi: Let me put it this way: The protein structure may vary. The side chain may differ but does not interact with its binding properties. So now we are trying to identify the domains and binding and show their similarity. If you can do that, it means additional testing is unnecessary. How can the body differentiate between molecules if the domains have the same structure? It will make a big difference; I’m glad you brought this up.

The Benefits of the Inflation Reduction Act for Biosimilars

BR&R: Let’s switch gears a little bit. You have a more positive take on the effect of the Inflation Reduction Act on biosimilars than many do, including me. Why do you think the IRA will be more beneficial for biosimilar developers?

DR. NIAZI: I had the privilege of helping draft the IRA, so let me quickly summarize what it means for biologics. Suppose the originator of a biologic product has monopoly on that biologic for 12 years or more, and no biosimilar is presently competing with it or forthcoming in the near future. In that case, the list price will be reduced, not controlled, by 35% until a biosimilar arrives. This is how this act is written.

Now, the greatest misunderstanding has been around how the IRA would affect the entry of biosimilars. First, this applies only to CMS reimbursements, which are 30% of the market. It doesn’t have any effect on the rest of the market. What if the company producing the reference product reduces the price by 50%? The argument in opposition is that if the reference product price is reduced, then there is less incentive for biosimilar developers to compete for the business. It is not unusual for the reference product to drop its price once a biosimilar arrives; the current argument against the IRA concludes that this does not favor biosimilars. It makes no sense and has little to do with the IRA.

The IRA applies to part D and B drugs in a staggered manner where only the top 10 drugs with the highest reimbursement are chosen; none of the biological drugs fall in this category now. The drugs reimbursed by the CMS do not have the same market structure as the general public, which is completely ignored by those opposing the IRA.

Congress also studied the impact of the IRA on new drugs coming to market, finding that it will affect the entry of three drugs over 15 years. Unfortunately, this, too, was misrepresented in many statements made by those opposing the bill.

Another important aspect is that, for the first time, it will be in the interest of the reference drug maker to let the biosimilars walk in because then they won’t be subject to Medicare price negotiation. So that could reduce the risk of a patent dance.

If a biosimilar cannot compete with the reference product at a 35% lower cost, it should not be in this business. For example, I made antibodies and cytokines. I can sell them at an 80% to 90% discount and still make a 90% profit margin.

In my opinion, this argument that the IRA will discourage manufacturers from developing new biosimilar products is ill-founded.

BR&R: Well, your point about the cost of goods being far lower than what people perceive them to be is true. On a recent manufacturer’s fourth-quarter earnings report, they cited the cost of goods for producing adalimumab as something on the order of 1% of the total budget.

DR. NIAZI: Exactly! The cost of producing antibodies, regardless of nature, is between $50 and $100 per gram.

I calculated drug reimbursements based on cost per gram. CMS now paid the lowest price, around $3,000 per gram. The highest reimbursement was around $25 million per gram for something that costs $100 per gram to make.

We must break this barrier and get all stakeholders to accept that 12 years of a monopoly is more than enough time. Europe doesn’t even allow that much. When the BPCIA was brought to the debate, the Obama Administration had proposed only seven years of exclusivity. Then all hell broke loose, and the Administration fell under pressure, increasing the duration of exclusivity to 12 years.

BR&R: One problem is that 12 years of exclusivity gives a manufacturer time to introduce new formulations with new patents.

DR. NIAZI: There you go! That’s the other part I’m fighting!

Grow Up and Get Creative

BR&R: Excellent. I want to close the discussion with a quote you wrote in Biologics last year. You stated, “Biosimilars have come of age; now it is the developers’ turn to grow up.” What did you mean by that?

DR. NIAZI: Oh, my goodness. That quote got me a lot of comments. I do believe in it, though.

Eighteen years have passed since the EMA approved the first biosimilar product in 2005 (somatotropin). Right now, in the US at least, biosimilars are mainly in the hands of big pharma. They have no issue spending $100 to $300 million, most likely because this is the allocated funding. Still, it has set a poor example for smaller developers.

It is up to the biosimilar developers now to challenge the regulatory agencies. I always teach one thing: Every agency guidance has on the first page the line, “The FDA is not bound by it.” There should also be another line: “Neither are you.”

I recommend that developers take a more creative approach to it. One of the things I’ve learned over the years is not to follow others—they may have set a bad example. Intelligent biosimilar developers can streamline the development costs quite a bit. That’s what I meant by growing up: Biosimilar developers must raise the science to lower the costs. It’s all based on science.

I am appalled that this subject needs to be addressed.

The US Food and Drug Administration (FDA) isn’t perfect, but it is still the global gold standard for evaluating medicines for safety and effectiveness. The FDA, though not quite recovered from the self-inflicted damage caused by the Aduhelm^® approval mess, is staffed by scientists who have done an admirable job of navigating the question of which drugs should be prescribed in the US. Who wants the judicial system deciding which medicines are safe and effective? No one. That’s right. Not a single thinking person would believe that the science-centric approach for evaluating pharmaceuticals, complex and otherwise, should be the purview of judges at any level of the system.

Texas District Court Judge Matthew Kacsmaryk’s ruling that mifepristone should be withdrawn from the market attempted to thinly mask the real basis for the action: his antiabortion leanings. His line of reasoning in overturning FDA’s decision in approving the drug 23 years ago on the basis of safety and effectiveness is absurd, possibly laughable.

As further evidence of the judiciary’s inability to (1) review this on a scientific basis and (2) comprehend the potentially vast implications of such an action, a federal appeals court preliminarily ruled that, without fully evaluating the safety evidence, the FDA “cannot deny that serious complications from mifepristone.” It pointed to the agreement that patients must sign before receiving it that use of the drug has risks. The New York Times reported that “the court also said that the FDA was incorrect in saying that mifepristone was comparable in safety to ibuprofen. ‘FDA’s own documents show that mifepristone bears no resemblance to ibuprofen,’ the court said.” What? Any healthcare professional will tell you that ibuprofen, when taken chronically and under certain conditions, can cause gastrointestinal bleeding, leading to serious health consequences. Does that mean it should be taken off the market, as well? The court is willing to conflate the experience of mifepristone, which is most often taken in combination with misoprostol, with that of ibuprofen, an analgesic.

After a full review by the Appeals Court (two judges appointed by the Trump administration and one by the Bush administration), this issue will likely be escalated to the Supreme Court. If the Appeals Court decides to uphold the Texas judge’s action, it will deal the FDA, the drug industry, and separation of powers a crippling blow.

Assuming the Appeals Court had not decided to trample the FDA’s authority, despite the Supreme Court’s recent Dobbs ruling, the higher court should have declined to entertain the appeal. The Supreme Court is already facing a crisis of credibility and confidence, and undermining the FDA, whose authority was formally established by an Act of Congress in 1962. Essentially, Congress has passed legislation saying that the FDA is the only entity qualified to make such decisions. With the Appeals Court larger ruling, the Supreme Court is unquestionably the next stop on this train to nowhere.

The Court would not question the overall constitutionality of the FD&C Act. Chief Justice John Roberts has long favored narrow rulings to avoid upsetting major legislation. There can be no narrow ruling if the decision to order the withdrawal of a drug is based on something other than scientific rigor. We all have preconceptions of how some of the justices would vote given the opportunity. Are they considering the wider implications? They had better.

The drug industry has reacted with apprehension, justifiably. What other FDA decision could be challenged in court if mifepristone is taken off the market? The only ones who benefit in that case are the lawyers.

Recently, we conducted a Web-based interview with someone who has been exceedingly important to the advancement of the biosimilar industry, Sarfaraz Niazi, PhD. Dr. Niazi, Adjunct Professor of Pharmaceutical Sciences at the University of Illinois and the University of Houston, founded the first US biosimilar company, Therapeutic Proteins (later Adello and Kashiv), and is the founder of Novel351k; as well as a biosimilar advisory company PharmSci. In part 1 of this two-part interview, we talked with Dr. Niazi about numerous topics critical to streamlining biosimilar regulation and speeding products to the market, including the cost of clinical trials, elimination of late-stage clinical trials and animal toxicology testing, and global regulatory harmonization.  

Biosimilars Review & Report: Tell us a little bit about your background in biosimilars, and how you became involved with biosimilar regulation and development.

Sarfaraz K. Niazi, PhD: I was able to set up the first US company to make biosimilars and also wrote the first book on the subject. My company, of which I am no longer a part, having gotten diluted heavily, got three products approved. But I realized that the cost of getting to the finish line is just enormous and matches what was cited in the current McKinsey report: It costs between $100 million to $300 million to obtain US product approval. Though the numbers can be flexible depending on the nature of the product, at that price range, you will deter entry of real competitors, smaller companies.

At the time I was developing biosimilars, I found many problems with the regulatory guidelines. The first one had to do with analytical assessment; the FDA used to call it analytical similarity testing; now the FDA calls it analytical assessment. I believed the guidelines on this were wrong, and I filed a petition with the FDA; the guideline was withdrawn, a rare happening and replaced with another guidance that removed the objections I had raised. Since then, I’ve been working very closely with the three agencies: European Medicines Agency, the UK’s Medicines and Healthcare Products Regulatory Agency, and the US FDA. Most of my interaction with the FDA is reported by the FDA on the website regulations.gov. Most recently, I filed for a regulatory harmonized guideline with the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use or ICH.

If a molecule looks the same as another, analytically such that  we cannot tell the difference, then neither can the body. I found that fear of safety of biosimilars inculcated by the extensive efforts of the big pharma had begun to take root; though it was totally untrue.

I started writing papers that questioned the existing guidelines regulating biosimilar development and testing. For example, I had always believed that there is no role for any animal toxicology testing in biosimilar development. Very simply, there is no receptor binding in an animal; to an animal, the medicine is just extra food. I published an article in Science and got in touch with Senator Ben Ray Luján (D-NM), who was writing a legislation to modify the BPCIA to remove this testing; I shared my paper and my thesis with all Senators and Representatives and I am not sure how much this impacted, but the Senate passed the FDA Modernization Act 2.0 based on removing animal toxicology testing.

Today, I’m working on a bill with Senator Michael Lee (R-NC), on removing the interchangeability designation from the BPCIA. Again, this must be done legislatively, because it is part of the original Act.

I’m doing my best to make the guidelines more rational. I’m having some success, but there’s still a long way to go.

International Harmonization of Regulatory Guidelines

BR&R: You’ve mentioned several areas, and I want to discuss each in a bit more detail. Let’s talk about regulatory harmonization first. Why is global harmonization of biosimilar regulatory guidelines so important for the future of the industry?

Dr. Niazi: If one set of regulatory guidelines is accepted globally, then a company that obtains approval in one jurisdiction can then distribute their product to many more countries. Efforts to achieve this in the past have not been successful. The ICH was an institution run by the US, Europe, and Japan. Recently, the ICH was reincorporated as a separate, totally independent entity. So, the new ICH is not the old ICH.

If we have an accepted ICH regulatory guideline, it will help make all products uniformly safe and effective across the globe. If I’m investing something like $100 million to develop my biosimilar product, I would like to be able to sell it across the globe without further regulatory costs.

BR&R: What percentage of the total development costs are associated with clinical testing?

Dr. Niazi: That’s probably the hottest thing to talk about. The FDA has now begun using a new terminology—“clinical efficacy in healthy subjects,” which is pharmacokinetic and  pharmacodynamics testing.

Generally, when you are talking about clinical efficacy in healthy subjects, the cost can range from $1 million to $3 million. In contrast, efficacy testing in patients could bump costs up to $30 to $50 million. In my opinion, those clinical tests account for most of the costs of development.

This also depends on disease state. For instance, if you are developing an oncology drug, it becomes far more expensive because of the difficulty in finding study patients. It requires a multicenter, global study, which might cost $50 million to $70 million.

BR&R: At the Festival of Biologics meeting we attended in March, we heard Dr. Gillian Woollett of Samsung Bioepis state that “unnecessary human testing is unethical,” and that we have learned nothing from late-stage clinical testing in biosimilars that we didn’t already know from analytical evaluations. Are we in a position today to reduce or eliminate the need for human clinical testing for biosimilar candidates?

Dr. Niazi: Let’s specify testing in healthy subjects versus testing in patients. There is a huge difference. When speaking about testing in patients, I totally agree. I have written several papers on this. The ethical statement is a universal rule, but I have additional reasons, which are different from anybody else’s.

In my papers, I took a statistical modeling approach to the issue. Remember, with biosimilars, we are, for the first time, attempting to compare two products that are already proven to be similar through analytical means. Basic statistical knowledge will tell you that when the two things are known to be similar, a great many subjects will have to be enrolled in a study to yield a statistically significant difference. Consider that if it took 300 patients to demonstrate a difference in efficacy between the reference product and placebo, it may take 100,000 enrolled patients to demonstrate a difference when comparing the biosimilar and the reference product.

To resolve this problem, the FDA allows a specific predefined level of variability, based only on clinical judgment. It’s completely arbitrary. But the argument that has been more convincing is the scenario where the comparison study fails to show equivalence between the biosimilar and reference product. Any time a study fails, statistical calculations will always show that this conclusion is incorrect, as I published my work based on Bayes theorem. It is easy to understand that if a drug study fails, the chance of a false-negative result is zero percent.

Then I evaluated the approximately 180 studies conducted testing biosimilars and reference products in patients. Can you guess how many failed? None. My argument is very simple. It is not based on the reason to reduce the cost of development. So, I agree with Dr. Woollett. We should eliminate these biosimilar clinical studies in patients.

Do We Really Need Animal Testing for Biosimilars?

BR&R: You also mentioned the lack of information we obtain from the animal toxicology studies. Can you elaborate?

Dr. Niazi: Yes. The language of the BPCIA includes a statement about “animal toxicology testing.” Biosimilar developers interpret the statement to mean that animal testing is mandated. Hundreds of animal toxicology testing data were submitted, showing that none of these studies failed—using rats, monkeys, rabbits, whatever. Animals don’t have the receptors that humans have; monkeys may have some receptors, but the receptor response would not be the same. There’s no way an animal model can demonstrate toxic effects of these medications. You will not obtain any useful toxicology information from this type of testing.

I confronted one very large company that conducted 17 animal toxicology studies and submitted them to the FDA. Of course, none of them failed, so I asked them, “What do you have against animals?” The FDA didn’t even review their studies.

So, we wanted to remove those two words—animal toxicology—from the BPCIA, and as of January 2023, they are now replaced with “non-clinical.” Of course, non-clinical testing may include animal testing, if necessary, but we have so many tests available that are much more sensitive and give you an orthogonal comparison; I do not foresee biosimilars tested in animals going forward, but I am afraid that the change in mindset may take a while.

BR&R: Excellent. If we’re talking about phase III or IIb testing in patients being unnecessary, the FDA has a great deal of latitude in terms of requesting or mandating certain tests for certain products. Does this decision have to be made by anyone else? Or does language have to change in the BPCIA to stop requiring their use?

Dr. Niazi: The guidelines state that the HHS Secretary has the option. So, the FDA has the last word. This is right, but it also gives the developer an opportunity to challenge. For example, the FDA has approved an interchangeable ranibizumab product (Coherus’ Cimerli^®) without requiring a switching and alternating study. My biosimilar products were approved with no testing, as I asked the FDA this question: “Do you see any residual uncertainty after completing the PK/PD studies? but before you answer, is there any study that will remove it?” I hope everybody will ask this of FDA.

So, yes, FDA has the authority to waive any requirement for biosimilar approval, but the developers must stand up and ask the question.

In part 2 and the conclusion of our interview, we discuss with Dr. Niazi the role of artificial intelligence in biosimilar development and how he believes the Inflation Reduction Act will benefit biosimilar manufacturers.

An FDA Application Filed for a New Trastuzumab Biosimilar

Accord BioPharma and its manufacturing partner Shanghai Henlius Biotech announced that the US Food and Drug Administration (FDA) accepted its 351(k) application for HLX02, a trastuzumab biosimilar candidate. The company is seeking similar HER2-overexpressing tumor indications as its competitors. If approved, it would be Accord’s first biosimilar approval in the US.

“We’re thrilled to announce this regulatory milestone as we work to provide patients increased options and access for treatment of serious conditions in oncology, immunology, and critical care,” said Chrys Kokino, President of US BioPharma at Accord BioPharma. “Biosimilars are key to making healthcare more affordable and accessible. We’re working to develop the deepest portfolio of biosimilars to enhance the patient experience and improve the cost of care across the continuum.” 

Accord BioPharma, the U.S. specialty division of Intas Pharmaceuticals, hopes to join a very crowded market, with five approved trastuzumab biosimilars and three other companies working towards commercialization or awaiting FDA decisions. HLX02 is already approved for use by the European Medicines Agency and by the China National Medical Products Administration. The development of HLX02 represents the first result of a broader commercialization and marketing agreement Accord signed with Henlius Biotech for additional investigational biosimilars.

New Demonstration Project Would Encourage Biosimilars Use Through Shared Savings

Written by US Representative Richard Hudson (R-NC), the Increasing Access to Biosimilars Act of 2023 was introduced in Congress in March. H.R. 1352 would set up a 3-year Medicare demonstration project that seeks to improve access to part B biosimilars by allowing providers to share in savings attained with use of the products.

The text of the Act states, “in addition to the payment that would otherwise be made…for a biosimilar biological product furnished or dispensed by a participating provider to a Medicare beneficiary, there shall be made an additional payment, in an amount determined by the [HHS] Secretary, that is based on the difference, if any (or portion of such difference), between the costs to the provider in furnishing the biosimilar biological product and the costs to the provider if the provider had furnished the reference biological product.”

No cosponsors have signed on to the Act yet, and the legislative proposal has been referred to the Houses committees on Energy and Commerce, and Ways and Means.

Biosimilar utilization has been shown to save Medicare significant dollars and lower providers’ financial risk when participating in shared-savings models, like the Oncology Care Model (a demonstration project that ended in 2022). This new proposal may be an attempt to continue that momentum.