Tag: biosimilar competition

26/15/9: Biosimilars at the Crossroads

After a flurry of action in December and January, there has been comparatively little action on the biosimilar news front in the past couple of weeks. As a result, I was looking forward to refreshing the till with a visit to the World Biosimilars Congress 2020 in San Diego this week. And the meeting didn’t disappoint. Over the next few days, I’ll be gathering my thoughts for specific posts from the meeting and individual discussions with my colleagues and (new and old) friends, and what I learned and could retain from experts who know far more than me.

The sessions themselves provided the opportunity to consider the current status of the industry in the US: 26 approved agents, 15 launched biosimilars from 9 reference classes as of today. The 26 approvals is fairly impressive, and the number of biosimilars passing Food and Drug Administration (FDA) scrutiny over the past two years alone is impressive. Fifteen launches, however, is a frustrating number, the well-understood result of a difficult experience on the patent dance and litigation learning curve. The vast majority of the delays have involved adalimumab and etanercept—the two biologics that would benefit most from biosimilar competition.

Nine reference products is perhaps more telling regarding the future of the industry. According to Sarah Yim at FDA’s CDER, the FDA is consulting on 74 biosimilar development programs, many of which may involve biosimilar categories with existing competition. The FDA does not disclose information on its consulting program, other than total numbers. One may assume that several of these developmental programs involve insulins that will be evaluated under the 351(k) pathway after March 22. Comparing the number of biosimilar approvals based on reference products with that of the European Medicines Agency (EMA) is flawed. The EMA considered growth hormones, insulins, and other proteins as biosimilars from the outset, and the FDA is only doing this now.

In the future (near and distant), there will be ample anti-TNF inhibitors, interleukins, multiple sclerosis agents, checkpoint inhibitors, VEGF antagonists, and other immunotherapies that may be subject to biosimilar competition, assuming the industry is sustainable.

At the meeting, the overarching sense was that the industry is at a crossroads today. I term it using Winston Churchill’s description: “This is the end of the beginning.” Hopefully, not the opposite. The reason I believe this is that 10 years after promulgation of the BPCIA, those chosen to play in the biosimilar field and remain today seem to have a clearer understanding of where they would like to go and how they will get there. The number of patent lawsuits being filed today seems to be lower than the number of settlements. However, as Christine Simmons, Executive Director of the Biosimilars Council pointed out, we should not underestimate the ingenuity of patent lawyers—this may only be a trough in a cycle.

Barring a surprising, catastrophic decision in State of Texas v. USA, the underpinnings of the biosimilar framework may be getting stronger—in part due to actions at the federal level and bipartisan sentiment against high drug prices. Yet, this positive take is a bit fragile, partly because relatively few manufacturers have experienced success on the marketplace to date. In addition, too few manufacturers are currently among the active players in the US marketplace.

What does this mean going forward? How will the industry cross section be characterized in 2025? Will there be more players? Will we find eight companies selling adalimumab biosimilars or will that number be winnowed down to three or four? Which biologic reference drugs will be the next biosimilar success stories? And will anticompetitive behavior by reference manufacturers be a continuing concern or consigned to the past? I’m getting more optimistic and hope to be present for the unveiling beyond the crossroads.

Amgen’s Infliximab Biosimilar, Avasola, Receives FDA Approval

On December 6, 2019, the US Food and Drug Administration (FDA) gave Amgen its approval to market the fourth biosimilar infliximab medicine.

Dubbed Avasola (infliximab-axxq), a launch date was not announced, but one can assume that Amgen intends to launch this agent as soon as possible. This infliximab biosimilar was approved for all of the autoimmune indications of the reference product Remicade®.

Avasola will be the third infliximab biosimilar agent to be marketed, as Pfizer’s Ixifi®, though approved, is not sold in the US, as it would compete directly with another Pfizer-marketed biosimilar (Inflectra®). Pricing for the Avasola was not yet available.

Avasola was approved based on clinical studies involving patients with inflammatory bowel disease, rheumatoid arthritis, and other indicated conditions (over 4,800 patients taking the drug), including a phase 3 investigation pitting the biosimilar against the reference product in patients with rheumatoid arthritis.

The US market for infliximab is shrinking somewhat, based on falling sales numbers caused by biosimilar competition and prescriptions lost to other biologics. According to Johnson & Johnson, parent of Remicade’s manufacturer (Janssen Biotech), US revenues shrank 24% (to $1.14 billion) in the third quarter of 2019 compared with the same quarter of 2018.

A Shakeout of Potential New Filgrastim Competition?

According to reports by Big Molecule Watch, two patent litigation suits have been dropped involving prospective filgrastim makers and the reference manufacturer Amgen. Sudden announcements like this have generally meant one of two things in the biosimilars arena.

The announcements came within days of each other: first, Accord BioPharma and Amgen announced that they jointly filed for dismissal of their ongoing suit. Then, on November 25, Big Molecule Watch reported that Kashiv Biopharma and Amgen have similarly dropped their patent litigation.

Three Scenarios Affecting Filgrastim Biosimilar Competition

Filgrastim market
Computer-Simuilation of a Filgrastim Molecule

The first potential scenario is that Amgen has come to an agreement with the respective manufacturers in terms of licensing or royalties associated with the sales of the biosimilar. We have seen this most recently with Pfizer bevacizumab biosimilar, where the Genentech and Pfizer’s filing to dismiss the patent suit came within days of an announcement of the new agreement. However, the new announcements involve filgrastim, a product that has been marketed since 2015, with ample competition (that is not subject to previous licensing arrangements). A new licensing agreement would be a bit less likely here, since Amgen owns less than 50% of the filgrastim share (Neupogen’s competitors Zarxio® and Granix® hold 31.7% and 20.3%, respectively, according to February 2019 IQVIA figures).

The second possibility is that Amgen has simply dropped the respective suits because of their lower marketshare; that is, the biosimilar genie is already out of the bottle, and litigating these ongoing lawsuits are simply a waste of resources.

A third possibility is that these prospective manufacturers, both of which have run into difficulties obtaining approval for their potential biosimilars in the US, have actually stopped development. This may be the most likely reason.

We reported back in May that Apobiologix (the US biosimilar subsidiary of Apotex) has likely ceased biosimilar development. They first filed for approval in early 2015, with no FDA action reported since that time. The lawsuit regarding this product was being defended by Accord (which was a subsidiary of Intas Pharmaceutical, a partner with Apotex in the development of the biosimilar); Accord’s name was substituted on the suit for Apotex’s in August 2019. Perhaps the rights for the filgrastim biosimilar reverted back to them.

Has Kashiv Biosciences Also Lost Interest in Filgrastim?

In the case of Kashiv Biosciences, this manufacturer purchased Adello Biologics in January 2019, which had been developing biosimilar versions of filgrastim and pegfilgrastim. Kashiv, which hasn’t issued a press release since the initial announcement of the purchase of Adello, still lists both agents on its pipeline. In January, the company stated to BR&R that it was proceeding with its development of the pegfilgrastim biosimilar, with a filing possible before the end of 2019. The filgrastim biosimilar filing in September 2017 is likely to have resulted in at least one complete response letter. No action from the FDA has been reported. One might also assume that the commercialization efforts for this product have been aborted.

If this is true for both cases, further litigation would be pointless. It may simply be additional evidence of a shakeout of the remaining competition in the first-generation biosimilar market.  

Momenta Drops Out of Biosimilar Adalimumab Competition

In reporting its second quarter earnings, Momenta Pharmaceuticals stated on August 2 that it no longer plans to market M923, its biosimilar version of Humira®.

“Today, Momenta announced the Company will cease active development of M923 at this time, due to changes in the market opportunity associated with Humira patent litigation settlements,” according to a company press release.

In 2018, Momenta decided to drastically scale back its biosimilar development as part of a strategic review. However, it continues to partner with Mylan on one remaining biosimilar candidate, M710. This is a biosimilar version of aflibercept (Eyela®).

Momenta’s troubles were first apparent after it completed its phase 3 trial of M923 in psoriasis. The clinical study pitted the biosimilar versus the EU-licensed version of adalimumab, and was successfully completed in 2017; however, no FDA filing ensued, despite a company announcement that it would occur in 2018. Later that year, the company stated that it delayed filing for financial reasons, but it would continue to seek a partner to commercialize the product.

In 2018, it signed a licensing agreement with AbbVie, which would have allowed it to launch in December 2023—in the back of the pack of licensed biosimilars in terms of timing (which could not have helped its efforts to seek a partner). In view of its refocusing its strategic outlook, the delay in filing a 351(k) biologic licensing application (BLA) application with the FDA may have made some sense from a couple of perspectives

First, the company may have thought twice about continuing expenditures if it was undecided as to whether it would remain committed to the biosimilar development. These expenditures could be quite significant (beyond payment of user fees) if the FDA requested additional data in an initial review of the BLA.

Second, with a potential launch date of December 2023, Momenta certainly had time to get its ducks in a row. If a commercialization partner could be lined up before the BLA filing, that company could help shoulder additional associated costs.

In any case, Momenta’s pull back is not entirely unexpected. Though it intended to file an application with the European Medicines Agency early this year (which would not have required a further delay in launch), this also did not occur (probably because of existing biosimilar adalimumab competition in Europe).

Momenta’s pipeline, beyond aflibercept, consists of other biologics for rare diseases. Its marketed products are for generics of Copaxone® and Lovenox®.

New Managed Care Pharmacy Survey Shows Broad Support for Biosimilar Adoption

According to a study published in the Journal of Managed Care and Specialty Pharmacy, managed care pharmacy executives are fully onboard with encouraging the use of biosimilars: Eighty-four percent agree that these FDA-approved agents are safe and effective for use in patients who are taking a reference product.

The researchers sent survey invitations to more than 10,000 members and contacts of the Academy of Managed Care Pharmacy. The survey, conducted in October 2018 was limited to the first 300 respondents. All potential pharmaceutical industry participants were excluded through the use of screening questions. Roughly two-thirds of those participating were pharmacy directors or clinical pharmacists.

The survey asked whether they believed certain policies would improve biosimilar uptake. The results indicated respondents’ belief that prescriber education was still a principal problem (Table). However, they also looked inward, as formulary policies and reduced patient cost sharing may also be key opportunities for improving uptake. Indeed, only 20% of those surveyed were working in health plans or insurers that have established preferences and policies to promote biosimilars over reference products. Eleven percent (at the time of the study) preferred biologics to biosimilars. This may have changed significantly, based on UnitedHealthcare’s recent moves to favor reference agents.

TABLE: LIKELIHOOD THAT SPECIFIC STRATEGIES CAN OVERCOME BARRIERS TO BIOSIMILAR UPTAKE

Strategy Extremely or Likely to Be Successful
Prescriber education on switching studies 91%
Clear FDA guidance on substitution 90%
Formulary policy for treatment-naïve patients 88%
Prescriber education on real-world studies 86%
Expanded Medicare/Medicaid policies 84%
Reduced patient cost sharing for biosimilars 80%
Formulary policies for switching 73%
Government-funded interchangeability studies 70%

When asked about how formidable these challenge were to overcome, 61% said that provider education was “extremely difficult” or “difficult” to overcome. The inevitable pricing and contracting issues were a close second, at 57%. Respondents offered that this was a competitive hurdle that biosimilar manufacturers must tackle—they need to be more aggressive at launch in terms of discounts off of retail prices and contracting. Concerns about biosimilar safety and efficacy among payers were the least worrisome, with only 23% rating this challenge difficult or extremely difficult.

Only 9 months ago, when the survey was conducted, the US biosimilar arena was far different. It took place after approval and launch of the first pegfilgrastim biosimilar but before the launch of the cancer-treating biosimilars. The discussion of rebate safe harbors was in full swing, the federal government was thinking through its approach to peeling back the patent thicket, and a war on drug pricing was being waged. Today, only the drug pricing efforts are still ongoing. Any hopes for an adalimumab biosimilar launch before 2023 have disappeared. However, a handful of critical launches (e.g., Udenyca®, Kanjinti®, Mvasi®) have pressed more immediate discussion of biosimilar uptake.

The results of this survey demonstrate once again that pharmacists working in managed care organizations are very open to helping spur biosimilar access. Both the manufacturers and payers need to take advantage of this opportunity today.

The Potential Effect of Amgen’s Launch on Biosimilar Licensing Deals

Imagine this interesting and perhaps very real-life scenario. It could have several implications for the present biosimilar marketing picture.

Biosimilar licensing deals

A reference manufacturer, we’ll call them Arby, signs multiple licensing deals with biosimilar manufacturers, to launch their products sequentially in 2025. The licensing deals all conclude outstanding patent litigation between the parties. But one biosimilar manufacturer doesn’t sign. We’ll call them Brooklyn Industries (BI for short).

Despite Arby’s contention that its patents on the reference product Yultira are valid until the year 2045, BI decides to launch at risk in July 2020. According to the phased launch schedule, another manufacturer, Thousand Oaks, was supposed to have the first biosimilar available on the market, with a three-month jump on the other seven competitors. Does that really give BI a five-year start over all of its competitors? And what if BI had an interchangeable biosimilar designation? Would that enable them to lock up the marketshare?

Biosimilar Licensing Deals: The Acceleration Effect

This scenario is actually playing out today with Amgen’s launch announcement of its trastuzumab and bevacizumab biosimilars (Kanjinti® and Mvasi®, respectively). Other manufacturers, including Pfizer, Samsung Bioepis, Mylan/Biocon, Teva/Celltrion have licensing agreements in place with Genentech (a subsidiary of Roche) for launch of their Herceptin® biosimilars. Only Amgen’s Mvasi and Pfizer’s Zirabev® are approved (so far) to compete for the bevacizumab business. The details of the licensing deals signed by Roche have not been released publicly, so we do not know when the first “authorized” biosimilars were supposed to launch. Conjecture abounded that it would be in 2019, nevertheless.

How does Amgen’s Kanjinti launch affect the licensing agreements that were signed with Roche? Does it mean that Amgen gets a substantial head start on the competition? Do the licensing contracts consider this possibility?

According to Kevin M. Nelson, JD, at the Chicago-based law firm Schiff Hardin, this scenario is considered in a typical pharmaceutical licensing arrangement. “Typically, settlement agreements in the pharma space include what are called acceleration clauses. Such clauses will allow an agreed-upon launch date to be accelerated to an earlier date in the event the patent or patents are invalidated or found not infringed in another litigation, or if a competing product or authorized competing product comes on the market before that agreed-upon date.”

Biosimilar licensing deals
Kevin M. Nelson, JD

He added that these acceleration provisions “can come in a variety of flavors from a change in royalty rate or structure, a requirement to leave the market if the ‘unauthorized entrant’ leaves the market, or perhaps agreed damages.” 

Accelerating Clauses Are One Thing. Accelerating Launch Is Another Matter

The fact that Amgen has announced its immediate launch may present more pragmatic problems for the other manufacturers, Mr. Nelson pointed out. Let’s say that you were a member of the Mylan/Biocon team. Your product was approved more than 18 months ago (the first one approved). Let’s also say that your licensing agreement with Genentech allowed you to launch after November 1 (a purely speculative, arbitrary date). Finally, assume that your licensing agreement was generous: it allowed you to launch as soon as possible after another competitor jumped the starter’s gun. Is it feasible to launch immediately, perhaps four months early?

“The biosimilar companies cannot just fire up the machines and have product ready tomorrow,” stated Mr. Nelson. There are all of the logistical issues surrounding a launch that must be considered: “Manufacturing, packaging, sales, and distribution all take time,” he said. “And you don’t want inventory to go bad—especially not this type as it is expensive. They may have some reserve lots or made small batches just in case, so we could see a trickle into the market.”

Remember, also, that payer and health system contracts are not arrived at overnight. Even if the Mylan/Biocon team did have lots available for shipment, they might not have places in the US to ship, other than to a group purchasing organization or distributor’s warehouse.

Typically, payers will not cover pharmaceutical agents outside of medical exceptions before the Pharmacy & Therapeutics Committee review, and this can happen anytime between 60 days and 9 months of the launch. And this is not a product that will revolutionize therapy or immediately fill an unmet clinical need. Only large discounts can move the needle here, and establish a contract quickly. Therefore, the anticipated short window of opportunity that Amgen may have in launching Kanjinti may get a little shorter but perhaps by not much.

When I mentioned the Arby, er Abbvie, scenario, Mr. Nelson agreed that it would be an entirely different ballgame. Had Boehringer Ingelheim decided to enter the market (as an interchangeable or not), their launch “would have caused absolute chaos.” Imagine trying to pull forward launch date plans of seven manufacturers by three years!

A Conversation With Doug Long, IQVIA

Doug Long, Vice President of Industry Relations at IQVIA (formerly QuintilesIMS), spoke with us about some of the intracacies of the filgrastim and pegfilgrastim marketplace, and regarding improving access to biosimilars in general. 

Doug Long
Doug Long, IQVIA

BR&R: Do you think interest by manufacturers in biosimilars is gaining or waning at this time?

Doug Long: It’s somewhere in between those two. A lot of people are staying in the game to see how it plays out. Maybe discouraged most accurately describes their feelings at this time. They are discouraged, because there are 17 approved products but only 5 are available. And the uptake of those on the market is not that great, particularly compared with the uptake in Europe.

BR&R: I can see how manufacturers and payers would be discouraged right now. You’re right, in the European market, we’ve seen a great deal of uptake and significant discounting as well. So many factors affect biosimilar coverage and uptake. It may also relate to the individual biosimilar’s disparate marketplace situations.

DISTINCT MARKETS FOR BIOSIMILAR DRUGS

In the US, based on the utilization numbers seen today, do you believe the infliximab, filgrastim, or pegfilgrastim markets will best characterize how other biosimilars (e.g., Avastin® or Herceptin) will perform when available?

Long: Well, with the filgrastim molecule, you need to look at both filgrastim and pegfilgrastim, and their routes of administration (prefilled syringes and on-body injectors). Granix® and Zarxio® have the majority of the dollar share on the filgrastim side. It’s too early to tell on the pegfilgrastim side, though Amgen has a 61% share of that Neulasta® molecule with its Onpro® formulation. The addressable market for the molecule is really only the remaining 39%.

You also have to make a distinction between how much of the market is controlled by the pharmacy benefit managers compared with the hospital group purchasing organizations (GPOs) or buying groups. Most of the filgrastim and pegfilgrastim is controlled by the hospital buying groups, and that’s also going to be the case for the cancer-treating biosimilars. There’s no doubt in my mind that when Humira® or Enbrel® are available, the PBMs will embrace the biosimilars. There are just so more complexities on the hospital side of the market that it makes it more difficult for them to move towards the biosimilars.

DEEPER INTO THE FILGRASTIM/PEGFILGRASTIM SCENARIOS

BR&R: There’s an interesting situation brewing in the filgrastim market. The success of Granix and really Sandoz’s Zarxio penetrating the market has contributed significantly to the drop in total sales revenues for filgrastim sales combined. However, how much of this decrease is attributable to migration to pegfilgrastim, and Neulasta Onpro in particular?

Long: Sure, look at their revenues today. Filgrastim is at $611 million in annual sales and pegfilgrastim is at $4.3 billion. Of that $4.3 billion, Onpro accounts for 61%.

BR&R: At Coherus’ fourth-quarter earnings conference call, their CEO indicated that he thought the Onpro marketshare might be vulnerable to the pegfilgrastim biosimilar, which is available today in prefilled syringes. Obviously, that would mean selling Undenyca® at a more enticing price, below the 33% discount currently offered. Do you think that Onpro sales erosion is likely or does the formulation offer real value?

Long: That could work, but the thing about Onpro is that when you finish your chemotherapy for the week, they put the injector on you and you don’t have to go back to the doctor’s office for a pegfilgrastim injection the next day. That’s one of the reasons it is as popular as it is—it reduces hospital and doctor expenses at the end of the day, and is more convenient for the patient.

BR&R: Biosimilar manufacturers like Coherus have expressed interest in developing its own on-body injector for its biosimilar. It seems to present distinct advantages. Does that mean that the biosimilars will be relegated to fighting only for that prefilled syringe market, the remaining 39% of utilization?

Long: It’s probably too early to say. Fulphilia® has only been marketed since July, and the other one [Udenyca] was launched only recently. We’ll have to see what kind of uptake it gets. Also, we’ll have to see what happens when other players come to the market. The more drugs you have available, the more share erosion from the originator you’ll likely see. Yet that did not happen with Remicade…

BR&R: That may be more of a special situation, considering the actions taken by Janssen Biotech to prevent coverage of both Pfizer and Merck’s products.

The filgrastim/pegfilgrastim markets are also different for that reason: Amgen did not aggressively defend their market share on the prefilled syringe originator products (i.e., Neupogen® and Neulasta). Rather, they focused on getting conversions to Onpro. So the biosimilar manufacturers were not facing aggressive defensive tactics, like those employed by Janssen. 

Long: Yes, but they will defend Onpro as much as they can.

BR&R: And Amgen established Neulasta and the Onpro formulation at the same price point.

Long: It made sense. It was a good defense mechanism.

BR&R: It does force the biosimilar manufacturers to work harder to gain business.

AN UNCLEAR FUTURE

BR&R: The Administration has several initiatives that may directly or tangentially affect the biosimilar market. These include the Medicare International Pricing Index, the move to place Part B drugs into Part D (and allow step therapy and other UM tools), the reevaluation of drug rebate safe harbors, and of course, the individual components of the Biosimilar Action Plan. Do you think this will ultimately result in artificial price deflation? Would that be helpful or harmful to biosimilar makers?

Long: That’s a question that I really don’t have an answer for. Who knows what’s going to happen? People have started to make moves to reduce WAC prices, like Amgen on their PCSK9 inhibitor and Gilead on their hepatitis C treatment. Gilead created an “authorized generic” to reduce its price dramatically.

People are starting to play around with it. Maybe to get adopted, a biosimilar maker may actually have to raise their drug’s WAC price higher than the originator, and then give a larger rebate.

Is It About the Rebates, Net Costs, or Both?

It sounds a bit absurd, but we shouldn’t be surprised at this point: Health plans may not be satisfied if pharma companies simply dropped their drugs’ retail prices. They still want their drug rebates on top of this, says one well-known industry analyst. The pharmaceutical industry is stunned, because its members believed that the net price was the only thing that really mattered (or so they were told). It seems that payers’ addiction to rebates is even tougher to kick than originally thought.

Drug rebates
Ronny Gal

Ronny Gal, an analyst from Sanford Bernstein, told Fierce Pharma  on February 11 that UnitedHealthcare will be seeking “equivalent” rebates on medications, regardless of whether a company drops its price. According to the article, UHC executives confirmed the statement. Their logic isn’t completely crazy, but it is problematic. The rebates, plans have argued, help minimize consumer premium increases.

Let’s assume that this is the case: larger plans would lose millions of dollars in revenue if their 20% rebate, for example, were exchanged for simply a 20% decrease in wholesale acquisition cost (WAC). If the plan is truly using this revenue to subsidize higher medical costs, then members’ premiums would have to rise a commensurate amount.

Well, that just puts the pharmaceutical companies (and even biosimilar makers) in a difficult position. If drug A costs $600 per month, and to comply with the federal government’s efforts (and those of some pharmacy benefit managers [PBMs]) to lower medication prices, they drop their price to $400 per month. Don’t scoff, the makers of the PCSK9 hypercholesterolemia drugs just cut their WAC by 60%. Similarly, makers of hepatitis C virus treatments whacked their WACs by significant amounts in 2018. Assume the manufacturer of drug A was giving the PBM a 20% (or $120 per month per prescription) rebate to maintain co-preferred position, and the PBM shared half that rebate with the health plan ($60 per month per prescription). Now, let’s also assume that the pharmaceutical company refuses to add a rebate on top of this amount. Who will make up the difference, if the health plan insists upon it? The PBM? Don’t bet on it.

For biosimilar manufacturers, this lower price plus rebate scenario can be very discouraging. If you agree that a biosimilar maker can only gain access if it maintains a 25%+ discount to the reference drug manufacturer’s WAC, then the prospect of an additional rebate puts further price reduction pressure on their profitability. That could bolster the argument that pharma should steer clear of the biosimilar marketplace.

We always understood that from a payer standpoint, net cost was the primary objective. We were told many times that although it didn’t matter as much how the number was arrived at, the health plans preferred lower WAC as opposed to higher rebates. Now, we’re not so sure whether the rebate trap hasn’t ensnared those health plan executives.