Biosimilar Step Therapy for Medicare Part B: Does This Make Sense?

The Centers for Medicare and Medicaid Services (CMS) has decided drugs covered under Medicare part B may be subject to step therapy, if so desired by Medicare Advantage plans. UnitedHealthcare has become the first to publicly implement step therapy policies for these drugs. However, biosimilar step therapy is not the typical utilization management tool that industry executives are used to seeing.

biosimilar step therapy Traditional step therapy or step edits for prior authorization policies are typically used to require the use of an effective, low-cost drug class before trying a more-expensive treatment. For example, a plan might have a step in place before a patient can receive Humira^®, such as requiring documented failure on other disease-modifying anti-rheumatic drugs, like azathioprine or methotrexate. This makes very good sense when supported by practice guidelines or treatment pathways, based on solid supportive evidence.

For biosimilar manufacturers, the perspective on the revised CMS policy, seems to imply trying the biosimilar before receiving the branded originator product. This biosimilar step therapy would make very little sense. A doctor would not be practicing evidence-based medicine if he or she prescribed Remicade^® to a patient after failure of Renflexis^®. There is no evidence to show that the biosimilar will work in a patient who did not receive adequate clinical benefit from the reference product (and vice versa). Similarly, there is no information to show that a patient who has an adverse effect while taking Remicade will not have that adverse effect after injecting with Renflexis (or vice versa). In other words, after failing one, a new mechanism of action should be tried, not a product with a very similar structure. This may be a different argument, if a subcutaneous form of infliximab was introduced, and this might be reason to step the infusible form through this drug.

In United’s announcement, they are clearly seeking to increase biosimilar utilization, as designated preferred part B agents, at the expense of Remicade use, the nonpreferred agent. Therefore, it may make more sense that new patients will have to use a biosimilar before being prescribed the reference product. Step therapy in this case is almost an aside.

Ironically, the Department of Health and Human Services has also expressed its desire to move part B agents like self-administered injectables to part D. This may not apply to infliximab, as it is given as an in-office infusion. Should this be the case, plans will have many pharmacy tools at their disposal beyond biosimilar step therapy.

In other biosimilar news…Fresenius Kabi has signed an agreement with Abbvie to delay its adalimumab biosimilar market entry in the US until 2023. The manufacturer is currently trying to secure European approval for the product. A 351(k) application has not yet been filed by Fresenius in the US.

An Update From BBCIC: A Conversation With Cate Lockhart, Program Director—Part 2

The Biologics and Biosimilars Collective Intelligence Consortium (BBCIC) is the organization that will perform the critical task of postmarketing surveillance for biosimilars and their reference biologics. Started in 2015, the BBCIC is a nonprofit, scientific public service initiative, which partners with multiple stakeholders to accomplish its mission. In the conclusion of our two-part interview with Cate Lockhart, PharmD, PhD, we explore how BBCIC is communicating with its stakeholders and whether the FDA’s four-letter suffix for biosimilars will assist in its tracking efforts.

GETTING UP TO DATE WITH BBCIC ACTIVITIES

BR&R: Let’s talk a bit about what BBCIC is doing today. Can you give me an update on current BBCIC programs?

LOCKHART: Sure. We have completed our first round of descriptive analyses, composed of four studies that were designed to (1) characterize our patient population for these specific disease states and (2) understand our data. Can we reliably identify the cohorts of patients we’re interested in studying? Can we identify the outcomes that we’re interested in reliably? Do we trust our results, based on existing literature? What are the gaps in our capabilities? Those initial studies are completed, and we’re in the process of publishing those findings.

BBCIC Update — Cate Lockhart, PharmD, PhD

In the meantime, we have four work groups that are focused on methodological issues or filling in some of our data gaps. One group is working on best practices in comparative-effectiveness research (CER) methods. A lot of people are doing large-scale CER like this, but little consensus exists on best practices for performing it. We’ll come up with our own recommendations that will help guide our future research.

Another work group is specifically looking at switching patterns. The first phase of that work is completed. They identified methodological considerations for best approaching switching in the context of our research. We’ll soon be moving into the second phase, where we dig into BBCIC data and do a descriptive analysis, then we’ll start to understand the switching patterns in anti-inflammatory conditions, especially rheumatoid arthritis, and Crohn’s disease or ulcerative colitis.

BR&R: Will you be looking at switches from one biologic to another biologic? Or from one infliximab biosimilar to another?

LOCKHART: Well, that’s a good question. With rheumatoid arthritis, patients may change therapies many times and with different types of treatments. So we’re really looking at any and all of those. We are starting to get enough utilization of infliximab biosimilar products that we’re hopeful that we can start to include them in the analysis.

BR&R: When might we read some published data on some real-world evidence with biosimilars? Will it be in early 2019?

LOCKHART: It will take a bit longer. As everyone in the US has experienced, biosimilar uptake and utilization has been slower than expected. As we discussed before, in order to do robust research in this space, where we are looking at relatively rare outcomes—whether it is safety or effectiveness outcomes—we need enough utilization numbers in order to start that research.

We are in the process of initiating our first CER study in G-CSF products, because we believe we do have enough biosimilar utilization in that category to begin.

We have one project that’s looking at NDC and J-codes to evaluate how physician offices are coding their utilization of and administration of both the biosimilar products and their reference biologics. We’re just in the data analysis phase of that, so we do expect to see some publications coming out of that in 2019. We will be presenting five posters at AMCP Nexus in late October.

BR&R: One of the missions of BBCIC is to be transparent about what it is doing. Please tell me about the communication efforts of the organization.

LOCKHART: One of major efforts this year is to get the word out about BBCIC; too few people are aware of the work being done.

Part of that is because during the first couple of years, BBCIC, which was officially convened in 2015, was very much in a start-up phase. The organization was just getting off the ground and running. My role is to begin the transition from start-up phase into one with much more of a public face.

We’ve moved beyond this start-up phase. We’ve finished research projects. We’re starting to publish based on these projects. Personally, I’m accepting any speaking opportunity I can. I’m encouraging BBCIC participants to go to meetings and present. We are starting to get a little bit more traction in that respect.

Another effort is our quarterly newsletter, which very cleverly is called the BBCIC Quarterly. I’m producing the newsletter as a vehicle to keep the broader community—and our current participants—apprised of where we are in our research, our progress, our plans, and where we are publishing or presenting results. That newsletter is posted on BBCIC.org. Anybody who is interested in receiving the newsletter can contact me, and I’ll add them to the distribution list. I’m getting good feedback on it as a way to just keep people updated on the general goings-on.

BR&R: The outreach is really needed. During the course of FDA Advisory Committee meetings or conferences encouraging public comment, I’ve heard many times the mantra “we need to track the outcomes of these biosimilars” or “are we going to be doing postmarketing surveillance?” This gives the impression that there are no efforts underway to do just that.

THE FDA’S SUFFIX: FOUR LETTERS OR A FOUR-LETTER WORD?

Yet, BBCIC is focused on postmarketing surveillance. Now, part of the ability to conduct studies of biosimilars and their reference biologics involves another highly debated issue: the four-letter suffix. What is your opinion? Do we need four-letter suffixes of biosimilars and their reference biologics to track them?

LOCKHART: I see the value on both sides of this polarized debate. We’re doing our NDC and J-code exercise to look at how these drugs are ordinarily coded and whether the suffix is used. The reality is, usage is quite variable today.

On one hand, I agree that putting a suffix just on the biosimilar does put up a flag in people’s minds that there is something different about this product. We don’t do that with generic drugs, but certainly that there is a very different context between generic drugs and biosimilars. But the philosophy behind biosimilars and generics is really not that different.

For tracking purposes, there could be benefit in using the 4-letter suffix, but we can’t track it effectively if people are not using it for coding. And some of the coding systems being used today are not really designed to enter the suffix, so prescribers and administrative folks actually can’t code it in. There are some infrastructure challenges around that.

As much as I enjoy it when the government tells us to do things that are devoid of meaning, I personally believe that the use of random letters [in the suffix] makes it more confusing. I don’t remember what they are; the random suffixes are hard to remember, like –abda or -qbtx, with no meaningful context.

BR&R: At the recent AAM meeting, I heard Hillel Cohen from Sandoz say that of 69 adverse drug reports for filgrastim since 2015, all but four were filed without the four-letter suffix, and they were able to identify the correct brand, whether it was Zarxio^®, Granix^®, or Neupogen^®.

It could be just as you said, that the administration system couldn’t handle the four-letter suffix, which is why it’s not entered. Or the providers ignored the four-letter suffix and used the INN and/or NDC code. Regardless, there doesn’t seem to be a rush to use the suffix in our early experience. Cate, from BBCIC’s perspective, is the suffix going to matter in terms of being able to track the use of a particular biosimilar?

LOCKHART: It’s really hard to predict. We’re in the position right now where infliximab is the only product where there’s more than one biosimilar on the market. If we’re looking at G-CSF agents, it’s not so complicated. It’s a hard question to answer, because it does rely so much on the infrastructure that we’re working with.

If we have these suffixes and nobody is using them, that’s missing the point. Some other countries don’t even bother with the suffixes—they just fill prescriptions with the brand name of the biosimilar. We still have a lot of inertia to overcome. Some of the controversy needs to be settled before we can even address the infrastructure problems.

From a BBCIC standpoint, I don’t think we know yet whether the use of the suffix will be critical, helpful, or neither. But, if providers or coders are not using the suffix in their claims, then it’s not helpful to us.

BR&R: Right. Well, it seems like pegfilgrastim may be the next test. We may have a second pegfilgrastim approval on or by November 3. That will mean two drug categories will have at least two biosimilars marketed. I’m guessing then it won’t be until into 2019 before we get a handle on who is using the four-letter suffixes for pegfilgrastim and who is not.

And the question of whether interchangeable products will get a unique identifier, no suffix, or something similar to the random four-letter suffix is still unanswered.

LOCKHART: That’s right. We still don’t know.

See Part 1 of our interview with Dr. Lockhart by clicking here.

An Update From BBCIC: A Conversation With Cate Lockhart, Program Director—Part 1

The Biologics and Biosimilars Collective Intelligence Consortium (BBCIC) is the organization that will perform the critical task of postmarketing surveillance for biosimilars and their reference biologics. Started in 2015, the BBCIC is a nonprofit, scientific public service initiative, which partners with multiple stakeholders to accomplish its mission. In the first post of our two-part interview with Cate Lockhart, PharmD, PhD, we explore how the organization is moving beyond start-up mode and towards providing real-world evidence on the efficacy and safety of biosimilars.

BR&R: Cate, what experiences or interests brought you to the BBCIC?

CATE LOCKHART, PHARMD, PHD: I was working in a small biotech company in Seattle. I was the health economics department. As is often the case in small biotech companies, it was a department of one.

I came into this role at the BBCIC in January 2018. Prior to that I’d been working on a part-time consultant basis with my predecessor, Bernadette Eichelberger, who was the architect of this organization. I had been working with her for a year and one-half or so, and to some extent, I learned about the inner workings of the BBCIC before I jumped into this role.

But what was really attractive to me was that it bridges a lot of areas of research, reflecting a lot of my experience in pharmaceutics, health economics, and pharmacy. This was, in so many ways, the perfect job for me because it really does marry all of those elements.

WHAT MAKES THE BBCIC TICK?

BR&R: Can you give us a little bit of a background on the collective intelligence methodology that underlies BBCIC.

LOCKHART: Sure. One of the unique elements of the BBCIC is our governance structure and the framework under which we operate. It’s a consortium, which means we bring together multiple stakeholders from a variety of perspectives. We have organizations who are manufacturers, we have managed care organizations, we have payers, we have some other nonprofit and some patient-engagement organizations. All of whom come to the table together for the common goal of conducting this research into the safety and effectiveness of biosimilars and their reference biologics.

Part of the logic behind that is, first, it helps to reduce some of the bias or perceived bias inherent in some research. Our work is not beholden to any one company, because all of the resources are pooled. In fact, some of our participating organizations are direct competitors, all sitting at the same table. That helps increase the credibility of the research.

Second, it gives us the opportunity to draw on the very broad expertise of our participants to hopefully make the research questions and the results that come out of our work relevant to as broad an audience as possible.

Third, it maintains a very high level of transparency. We operate under a charter. We have a board of managing directors. We also have a planning board or steering committee. Each of our participating organizations has a seat on the planning board. We have a science committee to help drive the scientific direction. We have a communications committee, and then we have our research teams. Each of these roles is clearly delineated in our charter, which is a publicly available document. We don’t operate in a black box.

BR&R: The BBCIC’s process is based on an existing program—the FDA’s Sentinel program.

LOCKHART: That’s a good point. The BBCIC is not part of the Sentinel program, but we leverage the infrastructure that was developed for Sentinel. The FDA spent a lot of time and money developing their common data model and coordinating its data partners to display and report their data in a specific way, so we’re leveraging that. There was no need to reinvent the wheel.

One key difference, in my opinion, is although our capabilities are very similar to Sentinel’s, our mission is a bit different. For one thing, we really are focused on biosimilars and their reference biologics. In that way, it fills a gap that FDA simply doesn’t have the bandwidth to address.

BBCIC Update The research that BBCIC does is proactive. The FDA tends to be reactive, investigating potential safety signals once they occur. That is, they may receive a signal through their safety reporting system, at which time they can activate Sentinel and investigate the safety signal further. Their primary purview is response to safety.

On the other hand, BBCIC is proactively looking at safety and effectiveness in a real-world setting. That differentiates us to some extent from the other existing organizations that are doing this sort of large-scale, multi-stakeholder, multi-data source, observational research.

CAN WE CAPTURE SIGNALS OF WANING EFFECTIVENESS?

BR&R: Monitoring biosimilars’ efficacy or effectiveness seems to be extremely important, particularly with all of the discussions that we’ve heard about lot-to-lot variations and the potential for manufacturing changes. This also applies to the reference biologics.

Can you provide an example, if you can, of how the process might actually identify efficacy changes or maybe decreasing potency?

LOCKHART: We’re going into this under the assumption that there will be no discernible difference, because that’s what we believe. These products have gone through the FDA review process, and we trust the FDA reviewers and their process.

Effectiveness is a challenging outcome to measure when you’re analyzing administrative claims alone. So to get a better picture, we may be interested in looking at different types of data sources. Part of our work is to understand those gaps in data to measure effectiveness and identify other data sources that can help fill in the picture.

Because of the scale of our data “network,” for lack of a better word, we can more easily identify rare events. We expect the safety signals or signs of effectiveness changes to be [hiding] in the data, so you need to have a very broad, diverse network of data to identify those signals. With BBCIC, we have that breadth of administrative claims data to help answer some of those questions.

BR&R: When using an administrative data set, can we somehow identify switching as a marker for waning effectiveness? Hypothetically, if patients with rheumatoid arthritis who were receiving a biosimilar for etanercept began switching more frequently over time to a biosimilar or reference biologic for adalimumab, for instance, could that potentially hint at decreasing effectiveness? I’m guessing that one would need a tremendous amount of data collected from the various participating institutions to validate that sort of trend.

LOCKHART: It’s true. Switching is an interesting topic, and we’ve devoted a fair bit of time to it. When you’re starting to do observational research with administrative claims, adding switching into the mix introduces some difficulties in analysis.

You’re right—you do need a lot of data in order to really evaluate any switching trends, and you need enough longitudinal data in order to evaluate any outcomes. When a patient switches from one biologic to a non-biologic, from one biologic to another with a different mechanism of action, or between a biosimilar and reference product, you need to have data covering sufficient time of exposure in order to identify an emerging signal. We’re looking into some of those questions today.

It’s hard to answer the question of why a patient switched therapies. It could be a clearly administrative reason: A certain payer made a drug formulary change and suddenly covers only the biosimilar and not the reference product. That’s easier to identify. In some diseases, like rheumatoid arthritis, patients are on a pretty circuitous trajectory anyway, and they do a lot of switching. It’s hard to tease out what outcomes are a result of a switch versus a result of the underlying disease. Those are some of the difficult questions that we have to wrap our heads around.

We’re also looking into some methodological questions and developing some best practices for how to examine switching, because it does introduce quite a bit of complexity. That said, the European experience has yielded a richer field of data because of their longer utilization of biosimilars. Their studies have not shown, in the literature I’ve seen, any differences in safety or efficacy based upon switching. But again, teasing out the nuances is challenging with any data source.

Part 2 and the conclusion of our interview with Dr. Lockhart will be published in an upcoming post.

Celltrion’s Rituximab Biosimilar Earns Positive Review

The information package released by reviewers for the Food and Drug Administration (FDA) indicates that a positive recommendation for Celltrion’s rituximab biosimilar is likely at the Advisory Committee meeting on October 10.

The members of the Oncologic Drugs Advisory Committee will review the data and hear public comments before voting to recommend that the FDA ultimately approve or reject CT-P10 for the treatment of non-Hodgkin lymphoma. Celltrion did not perform clinical trials for rituximab’s autoimmune indications. However, if the FDA approves CT-P10, it may extrapolate the approval to other indications as well.

The original 351(k) application by Celltrion in April 2017 resulted in a complete response letter from the FDA. The rejection for this rituximab biosimilar cited multiple deficiencies, including “clinical, product quality, and facility” problems, as well as clinical study issues from the original submission.

According to the FDA reviewers, “In considering the totality of the evidence, the data submitted by [Celltrion] show that CT-P10 is highly similar to US-licensed Rituxan^®, notwithstanding minor differences in clinically inactive compounds, and support a demonstration that there are no clinically meaningful differences between CT-P10 and US-licensed Rituxan in terms of safety, purity, and potency of the product.”

BR&R will cover the Oncology Drug Advisory Committee meeting and provide updates on its decision. If this rituximab biosimilar is eventually approved by the FDA, Teva would market the product in North America, based on a previous partnership agreement.

In other biosimilar news…Merck has inked an exclusive contract to supply its biosimilar infliximab (Renflexis^®) with the US Department of Veterans Affairs. According to a report from Pharmaphorum, it will be the only infliximab biosimilar on the VA’s national formulary.

More From GRx+Biosims on Four-Letter Suffixes and Biosimilar Interchangeability

The talk at the GRx+Biosims 2018 meeting this month in Baltimore was about challenges, but extrapolation was not one of them. Biosimilar interchangeability was. That was not entirely surprising. In market research projects I’ve been involved with over the past year, payers and physicians in medical groups have broadly indicated that they’ve gotten past the extrapolation question. They are willing to accept the Food and Drug Administration’s (FDA’s) decisions on approval for indications for which clinical studies were not performed. In fact, some payers have noted a willingness to not discourage a biosimilar’s use for an indication for which the reference product was approved but the biosimilar was not. This, of course, assumes that it makes economic sense to do so. Many physicians still harbor concerns about switching therapy but not in treatment-naïve patients. In other words, if the payer prefers one product over another in a new patient, they would change their prescribing practices. In other words, they would not “rather fight than switch.”

Instead, the meeting, which was sponsored by the Association for Affordable Medicines and its Biosimilars Council, raised other questions, including the rationale behind the four-letter suffix and the complexities around biosimilar interchangeability.

Are Four-Letter Suffixes Needed?

Two greater questions were raised, one very practical and one theoretical one. The first involves the issue of the random (or sometimes not, as in -sndz) four-letter suffix, which is required for biosimilars in the US, but nowhere else in the world. Japan requires biosimilars to be designated with a standard “–bs” suffix. However, the European Medicines Agency does not utilize any suffixes and relies upon the international nonproprietary name (INN) for tracking purposes.

To make matters more complicated, the FDA intends to retroactively provide a suffix to all reference products as well, which no doubt will challenge billing and coding systems. The question is currently unanswered in the US as to whether interchangeable products will carry a unique suffix or share the same suffix as the reference product.

Hillel Cohen, PhD, Execu biosimilar interchangeability tive Director of Scientific Affairs for Sandoz, believes that these suffixes will not enhance the ability to track the use of biosimilars. Despite not using any special designations, “if you look at the European experience,” he said, “96% of safety reports have been made with proper attribution.” He pointed to the small database of biosimilar use accruing in the US. “Out of 65 safety reports registered so far, 62 came in with the brand name,” Dr. Cohen said. “None of the 65 reports were entered with the four-letter suffix.”

More on Biosimilar Interchangeability

Questions around biosimilar interchangeability still abound, partly because the FDA has not yet issued final guidelines around the approval process. Apart from the misconception that a product earning the FDA’s interchangeable stamp of approval is a “better” product than an ordinary biosimilar, two specific questions were explored, one of which is mind-boggling, the other merely frustrating.

The challenge extends from the expectation of lot-to-lot variation that occurs with biologic manufacturing. Assume that biosimilar A obtains FDA approval as an interchangeable medication, based on the switching studies against a reference product. As time passes, this manufacturing “drift” occurs. In a conversation with Dr. Cohen, he asked, “Is the biosimilar still interchangeable with the reference agent?” In other words, will the drug maker have to conduct more clinical switching studies to maintain this level of confidence, proving once again that the drug will provide equivalent outcomes in all patients compared with a reference product that is now also subtly different?

The second theoretical question arises from one I had discussed in an earlier post, the law of transitivity. If drug B is a biosimilar to infliximab, and drug C is approved as a biosimilar to infliximab, too, are drugs B and C biosimilars to each other? The answer, according to the FDA, would be no, because they have not be evaluated for physiochemical similarity to each other, only separately to the reference product. However, for payers, the answer is not so clear.

Dr. Cohen took that question one step further. If at some point in time, there are biosimilars A and D, both of which have been granted interchangeable status to adalimumab, are they interchangeable with each other? Again, the official answer would be no, because that is not how the testing was performed.

This brings up another intriguing question: if I’m living in a state that passed legislation allowing for automatic substitution of an interchangeable product, can a payer substitute interchangeable biosimilar A for interchangeable biosimilar D, if the former is the preferred product based on contracting? Technically, if the physician prescribed biosimilar D specifically, the pharmacy would not be able to substitute, without the doctor’s consent. The FDA has not designated biosimilars A and D as interchangeable for each other, only the reference product Humira^®. The concept of biosimilar interchangeability is still, many years after passage of the BPCIA, an enigma.

Of course, based our situation in September 2018, this scenario is purely speculation, and will require multiple drug makers spending their R&D dollars to attain interchangeable status (to the same originator drug). That’s one reason why I like attending these conferences—they offer exposure to new, often confounding ideas!

Biosimilars and Drug Rebates: A Foot in the Door to Access?

At the September 5–7, 2018 GRx+Biosims meeting, I had the opportunity to moderate a session with three highly experienced biosimilar industry executives. They included Gary Deeb, Senior Vice President, Global Licensing and Business Development, Lupin Pharmaceuticals; Chrys Kokino, MBA, Head Global Biologics— Commercial, Mylan; and Mike Woolcock, MBA, Senior Vice President, Commercial Operations, Apobiologix. In the hour-long session, we covered a range of sticky topics. This post sums up some of the information gained on one aspect—the question of price transparency, recent FDA action to address drug rebates, and whether deemphasizing drug rebates will help biosimilars gain access.

One issue that is getting an awful lot of attention lately is the question of price transparency. This has been highlighted by the difficulties that Pfizer has had in gaining traction for its infliximab biosimilar, resulting in claims of exclusionary contracting by Janssen to protect the latter’s marketshare. One of the principal tools used by the reference biologic manufacturer is its power to rebate. When a drug has the lion’s share of utilization, rebates become very potent inducements to payers to provide or maintain preferred or exclusionary status on formulary. Therefore, the issue of biosimilars and reference drug rebates can be an important one for the industry.

In response to the challenges of biosimilars gaining uptake in the US, Health and Human Services Secretary Alex Azar has been investigating whether safe harbor laws that currently protect drug rebates from anticompetitive lawsuits can be changed. This move can affect revenues for both pharmacy benefit managers (PBMs) and payers who share in the rebate monies. It raises a related question, however: Would biosimilar manufacturers be better off competing on list pricing (i.e., wholesale acquisition cost) alone? And does the issue of biosimlars and rebates really matter?

In the backstage green room, this topic generated much discussion among our panelists. And quite frankly, the answer to this question is not yet in.

In previous market research and access projects performed for pharma and their agencies, it has been clear that health plan medical directors and pharmacy directors would prefer competition based on discounted WAC, whereas PBMs prefer to retain their rebate revenue. However, the plans do share in drug rebate revenue to varying extents, which they are quick to point out are helpful in holding down premium increases or funding other projects beneficial to members and patient care. Hence, they are stuck in the rebate trap as well. They are not generally eager to add a new preferred drug even if the manufacturer is offering powerful discount WAC plus competitive rebate; they realize that the rebate revenue is based mostly on how much marketshare the drug maker can gain (and how quickly it can amass marketshare).

The biosimilar industry representatives at our panel discussion were similarly reticent. Does it represent an opportunity to break the exclusionary contracting hold of companies like Janssen? Without high rebates to cement a reference drug’s place as a preferred or the only covered biologic, other manufacturers can get their foot in the door and compete for marketshare based on price alone. This does not mean that prices would necessarily be more transparent, however. One would expect that discounted prices negotiated (from one plan to another or one PBM to another) would differ and remain confidential in nature. In other words, Kaiser Permanente Southern California could still only guess what Blue Shield of California was paying for infliximab and vice versa.

If the average sales price (ASP) methodology were unchanged, one would expect the ASP, which reflects discounts and rebates, to be closer to the WAC price by the amount no longer rebated. But the wild card in this scenario would be the pharmaceutical and PBM industries’ reaction. Is there a way to reclassify rebates as some other payment, like “administrative fees”? Our panelists believe that the PBMs, for example, will not easily forfeit a revenue line representing pure profit, regardless of its size. One would need to anticipate some attempt to retain this revenue.

The issue of biosimilars and drug rebates may only be shifted, in the end. Payers would still want to see the lowest net cost for any product. In 2018, they don’t care too greatly about how this is achieved, through rebates, discounts, portfolio contracts, or other means. If pharmaceutical rebates were deemphasized, my own guess is that at least biosimilar manufacturers would not be disadvantaged once approved, simply because they don’t have any existing marketshare. And it would also test a payer’s fortitude in foregoing its own drug rebate revenue.

Scaling the Mountains to Create a Biosimilar Market Success

One of the persistent themes at the Association for Accessible Medicines’ first GRx+Biosims meeting was an existential one. Authorities such as Gillian Woollett, PhD; Hillel Cohen, PhD; and several industry experts worried that without a change in mindset and intervention by government, payers, and the industry itself, the US biosimilar industry may not survive its infancy. And failure to attain US biosimilar market success would have grave consequences for the global biosimilars industry.

In her session, Avalere Health’s Senior Vice President Gillian Woollett, discussed the three mountains that biosimilar manufacturers had to climb in order to be successful. These were, in sequence, Mount FDA Approval, Mount Exclusivity and Intellectual Property, and Mount Commercialization. Indeed, it seems that FDA approval in many ways may be the easiest hill to summit.

Twelve biosimilars have been approved by FDA, but this is a far cry from attaining biosimilar market success. The eight drugs that are approved but have not yet reached the market are testament to this problem. Most have fallen victim to the lengthy delays associated with the exclusivity and intellectual property difficulties, none more so than the adalimumab biosimilars. For US biosimilar makers, each year that Humira® (and etanercept [Enbrel®] which will likely be introduced before 2020) face no market competition represents billions of dollars in unrecoverable revenue, as well as tens of billions of lost savings to the health system. Of course, it also means billions of additional revenues to the reference drug makers and their shareholders, which is substantially why these delays occur in the first place.

Don’t Look to the US, not Yet

Dr. Woollett asked, “Can there be a sustainable multisource specialty market in the US? I don’t think this is a foregone conclusion in the US.” She explained that the US is 50% of the market by dollar volume, yet it is home to only 5% of the world’s population. With aggressive tenders in many EU member countries, manufacturers are looking toward the US market to ensure long-term profitability. “Can the US carry the return on investment for biosimilars for the rest of world? I’m not convinced,” asserted Dr. Woollett.

Dr. Woollett pointed to another potential limiting factor in the commercialization of biosimilars. No interchangeable version of a biosimilar has yet been approved by FDA. However, switching matters greatly to the anti-inflammatory biosimilar drug maker, because it determines the size of the initial market opportunity. She explained, “If it applies to entire anti-TNF market, that’s $30.4 billion for infliximab. If you consider only treatment-naïve patients, that market is much, much smaller. If it is restricted to treatment-naïve patients, then no, these biosimilars will not be viable.” Switching is not a formidable issue for cancer biosimilars, as these are used as chronic treatments; nearly all patients are new to treatment.

She also noted a decline in the number of biosimilar development programs registered with FDA, which may be a signal of problems in the perception of manufacturers regarding their market opportunity.

Limited Reference Biologics Targeted
“Interest in biosimilar development only occurs for successful originator biologics,” Dr. Woollett pointed out. When filtering out biologics that are also not nearing patent expiration, it leaves a limited set of very expensive reference medications.

In making the business decision whether to develop a biosimilar, drug makers consider a number of questions, including the ease and cost of obtaining samples for evaluation, potential need for expensive clinical studies, and finally, what expense and time may be required for commercialization (including patent litigation). If a company plans on making the biosimilar available in a number of countries, it may be required to prove its molecule is adequately similar to samples obtained from each country or region. This could mean the need to purchase over 100 lots from the manufacturer, which is often not willing to sell to potential competitors. This is the reason for legislation like CREATES Act, which attempt to make this easier for potential biosimilar manufacturers.

Lowering Costs Through Harmonization of Comparators
However, Dr. Woollett and her colleagues in the biosimilars industry threw their support behind a different approach in 2017. Theirs is an initiative to establish “global reference comparators.” Under this approach, a manufacturer would only have to prove biosimilarity with a single licensed version of the reference product. “If the reference product is the same worldwide, then oughtn’t the biosimilar be able to be, too?” she asked. “Requirements for different datasets cannot be justified,” said Dr. Woollett. “Biologics been around for a very long time.

Once approved, complexity is no longer a relevant argument.” This would eliminate the need for biosimilar makers to confirm equivalence in bridging studies between their molecule and the licensed standard approved by each jurisdiction.

This approach reflects a growing understanding that the lot-to-lot variations seen in usual manufacturing of biologics (and over time) do not generally represent a risk to patients in terms of clinical effectiveness or safety. This, Hillel Cohen, PhD, Executive Director, Scientific Affairs, Sandoz, has just not shown to be an issue over 20-odd years of biologic production (outside of the Eprex® incident in 1998). In essence, today’s biologics are biosimilars to the original product approved by the FDA or EMA decades ago, without adverse effect on efficacy or safety. He pointed out that bridging studies that have been required add time and complexity to biosimilar development. Global comparators would help resolve this, and it can be applied to both biosimilarity and interchangeability comparisons as well. Dr. Cohen noted that “the FDA’s draft interchangeability guidelines still require comparison with US-licensed reference products only.”

Interchangeability not a Guarantee of Biosimilar Market Success

Dr. Cohen said that when a biosimilar product is so extensively studied as to its comparability with the reference product, “I cannot imagine scientifically why we thought switching would be a problem. In the opinion of the EU, these agents are substitutable, under proper supervision, with clinical monitoring. Indeed, the concept of interchangeability is unique to US regulations. However, even this designation may not hold the key to biosimilar market success.

Leah Christl, PhD, FDA, agrees with EMA that biosimilars in theory are interchangeable with their reference for the purpose of MD prescribing (meaning they are substitutable). This helps address the question of whether a noninterchangeable biosimilar is somehow a lower quality or less equivalent to a reference product than an interchangeable biosimilar might be. In fact, Dr. Cohen pointed out, “There is no definition of a ‘noninterchangeable biosimilar’ in the BPCIA.”

The cost of development of biosimilars, which may be in the hundreds of millions of dollars, is very high, considering that only four have been launched in the US. Dr. Woollett thinks that something will have to change in order for biosimilar manufacturers to maintain their interest in this sector. Yet, in view of the limited options available in the US to remedy the situation, Dr. Woollett remains pessimistic. “These investments in biosimlars of up to $500 million will be reconsidered,” she concluded.

At the GRx+Biosims meeting, Secretary Azar’s assistant Daniel Best restated the administration’s desire to preserve the biosimilar industry for the benefit of lowering prices and greater competition. He said, “We absolutely have to find a market for biosimilars. We can’t allow it be be eradicated through the perverse incentives in the marketplace.”

In fact, the only biosimilar market success story to date, Zarxio®, may be as much the result of a certain set of preconditions as that of Sandoz’s marketing efforts. First, another branded product, tbo-filgrastim (Granix®), was already available and was eroding the share of Amgen’s reference product. Second, this agent, though not technically a biosimilar by the regulatory approval pathway, cleared away some of the patent issues for Sandoz in its development of Zarxio. Third, Amgen eventually yielded the top position to Sandoz (at around 40% of marketshare). This set of circumstances is a bit unlikely for the introduction of other biosimilar drugs. Many will be looking to Mylan and its commercialization of pegfilgrastim as the next test of biosimilar market success.

FDA Purple Book: Much Potential Value, Little Current Help

Under the BPCIA, the FDA Purple Book is the published agency reference on biosimilars. It lists very specific information with regard to both the reference biologics and biosimilars: (1) biologic licensing application number, (2) nonproprietary name, (3) proprietary name (brand name), (4) date of licensure, (4) reference product exclusivity expiration, and (5) whether the product is a biosimilar or interchangeable product.

FDA Purple Book However, the number of patents existing on a specific reference product and the complex nature of the web of exclusivities, has compelled several speakers at a September 4, 2018 public hearing on biosimilars to question the value of the current Purple Book information.

At the FDA-sponsored hearing, Mariana Socal, MD, PhD, MS, MPP, from the Johns Hopkins Bloomberg School of Public Health, stated that the FDA Purple Book should focus more on competition, “providing both proprietary and nonproprietary information.” She believes that “the drug identification information should be expanded,” to include administration, dosage form, strength, pediatric use, and orphan drug status. She would rather the FDA Purple Book publish much more information regarding the active ingredient, “and all unexpired exclusivity periods should be published in the Purple Book.” For those patents found to be eliglible, the 12-year reference exclusivity under BPCIA should be determined and published definitively in the Purple Book.

“The Purple Book should include information on all unexpired patents that the reference manufacturers reasonably believe protects their biologic product,” said Dr. Socal. Otherwise, it forces prospective biosimilar drug makers to sift through hundreds of complex pharmaceutical patents, “making it easy to miss a key patent.”

“The FDA is authorized to do this under the Public Health Service Act,” she stated. Increasing transparency and reducing uncertainty are building blocks of the effort to improve timeliness of access to biosimilars.

According to Dr. Socal and other speakers like Michelle Cope at the National Association of Chain Drug Stores and Christine Simmon at The Biosimilar Council, the implication is that the FDA Purple Book needs to be more of an assistive tool to improving access to biosimilars rather than simply a reference on what has been approved.

Phase 3 Studies in Biosimilars: Do They Tell Us Enough to Be Useful?

The argument for the elimination of the need for phase 3 studies in biosimilars is pretty simple: They cost a great deal but what do they add to our knowledge about the safety and efficacy of biosimilars? One of the primary tasks of the Food and Drug Administration (FDA), in educating health care professionals, media, the public, academia, and manufacturers, was to deemphasize the importance of the clinical trial in the totality of evidence approach they use to evaluate biosimilars.

Do we need phase 3 studies in biosimilars? The health care professional community, academia, and patient advocates may take another view: They are complex biochemical medicines and we cannot be sure of their safety and efficacy without carefully controlled studies in large populations. We have been ingrained for 40 years with the need for randomized, phase 3 clinical investigations that it may be very uncomfortable indeed to approve a drug without them.

Phase 3 Studies in Biosimilars: Statistically Speaking

At least one pharmaceutical company (Adello) is seeking FDA approval without phase 3 trials that study large groups of patients with the disease indication. In biosimilars, FDA is willing to extrapolate approvals without any clinical studies in other indications, and indeed, payers and providers are willing to accept this.

Furthermore, the FDA has taken many steps to speed access of biosimilars to approval. Other than altering the intellectual property and exclusivity timelines, what action can save more time in the process (much less money for the biosimilar developer) than the elimination of phase 3 studies in biosimilars?

In a phase 3 clinical trial of the originator biologic vs. a biosimilar, what do we expect to see? Since the expectation is that the physiochemical characteristics of the two molecules are exceedingly similar, and phase 1 trials should have proven equivalent pharmacodynamics, we don’t expect big differences in outcomes by phase 3. If phase 2 studies have been performed successfully, we believe this more emphatically.

At worst, we expect to see clinical effects that are on the edges of anticipated norms for the originator drug but within the range expected. One French investigator wrote this month in BioDrugs that typical phase 3 studies with 600 to 1000 patients are not statistically powered to detect more than major differences in safety. What is the real implications of 2 versus 5 drug withdrawals in patients taking medications that are much more alike than they are different? This author believes that well-designed phase 1 trials in volunteers can sufficiently detect the formation of antidrug antibodies and other immunogenicity differences between biosimilars and their originator drugs. This may be particularly true in patients with autoimmune disorders. When patients are routinely given methotrexate (another immunosuppressant) concomitantly with the biologic therapy, reliable evaluations of immunogenicity of the study medications are very difficult. Finding that hidden safety signal may not be possible.

Part B to Part D and Other Questions: How CMS’s Plans Could Affect Biosimilars

For 2019, the Trump administration has proposed transferring some products reimbursed by Medicare part B to part D coverage. Additionally, it will allow Medicare Advantage firms, which manage a small but significant percentage of Medicare beneficiaries’ care, to negotiate prices and utilize some pharmacy benefit tools to control costs.

Some of these tactics are a bit late to the party, as commercial insurers and health plans have been employing them for years. To the extent that an injectable treatment can be managed through the pharmacy benefit rather than the medical benefit, the drug can be easily subjected to prior authorization, step therapy, quantity limits, and other tools routinely used.

For the few available biologics and their corresponding biosimilars, these infusions are covered in general on the medical benefit today. Infliximab, filgrastim, and pegfilgrastim are still subject widely to buy-and-bill scenarios. Yet, Neulasta^® (pegfilgrastim) is already covered under a medical specialty benefit (fifth tier) for beneficiaries of two sample Medicare Advantage plans (HumanaChoice and Aetna Medicare Choice). In both of these plans, Neulasta is subject to prior authorization requirements. UnitedHealthcare covers it under the medical benefit, generally under its highest copayment or cost sharing tier. In contrast, Zarxio^® is on the preferred or second tier for United’s Advantage 3-tier and Small Group plans, also under the medical benefit.

These agents, administered via office- or clinic-based infusions, may also be available through specific distribution channels, like specialty pharmacy. In contrast, self-administered agents like adalimumab may be distributed to patients through specialty pharmacies only, which are part of the managed care machinery.

Insulin is still considered a “transitional drug.” Like adalimumab, it is self-administered. However, it is already covered by Medicare under the part D benefit, at least when used outside of an insulin pump. Therefore, part D providers, like commercial plans, have preferred and nonpreferred insulin products, negotiate for pricing, and may use other pharmacy benefit tools.

The Administration has not yet announced which drugs it will from part B to part D. It is unlikely though that the Centers for Medicare and Medicaid Services will jump beyond the experience of commercial plans and insurers. Until other biosimilars are made available for prescription, the latest CMS attempt to control costs may not directly affect biosimilar manufacturers.

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Tag: biosimilars