Mylan’s Fulphila Pegfilgrastim Biosimilar Launches at Big Discount

The first pegfilgrastim biosimilar (Fulphila™) in the US has begun marketing, and Mylan/Biocon are offering a 33% discount to the wholesale acquisition cost (WAC) of the originator product Neulasta®. The Center for Biosimilars reported a communication from Mylan confirming the action. This is a watershed moment for the pegfilgrastim category and could signal the beginning of large savings opportunities for payers and patients.

At a WAC of $4,175 per syringe, the pegfilgrastim biosimilar may be very attractive to health plans and insurers. It is also assumed that this will effectively drive down the average sales price (ASP) of the category over time. The ASP includes the WAC as well as any rebates or discounts given by the manufacturers.

The pegfilgrastim biosimilar, like the reference drug, Amgen’s Neulasta, is approved to decrease the incidence of infection as manifested by febrile neutropenia in patients receiving myelosuppressive chemotherapy.

Although patent litigation between the partners and the maker of the originator product (Amgen), Mylan/Biocon have decided to launch at risk. This means that if the District Court sides with Amgen, Mylan’s could face large financial penalties, including profits on the sales of the biosimilar.

Would Biosimilar Approvals With Limited Indications Alter the IP Discussion?

Over the next couple of weeks, I’ll be issuing a series of posts to further analyze some of the Food and Drug Administration’s (FDA’s) new Biosimilars Action Plan.

The Biosimilars Action Plan contains several important components. One of the more interesting items FDA Commissioner Scott Gottlieb mentioned in his remarks at the Brookings Institution webinar on Wednesday, July 18, involved modifying the intellectual property (IP) discussion with biosimilar approval for limited indications.

Originator drug makers have erected a so-called patent maze or patent wall over time to protect their IP and thus their marketing exclusivity as far into the future as possible. Patents can be filed for product composition, manufacturing techniques, new formulations, delivery systems, and indications. Often, the biologic products facing potential biosimilar competition have several indications. Adalimumab, for instance, is approved for use in nine unique conditions (I’ve included Crohn’s disease and pediatric Crohn’s as one disease state).

Dr. Gottlieb said that the FDA will be “updating guidance to provide additional clarity on how biosimilar manufacturers can carve out indications from their labels where a branded drug maker might still maintain some IP.” He continued, “And we’re going to describe how these indications can be efficiently added into a biosimilar label once that IP on the branded alternative has lapsed.”

This component was not spelled out in the Biosimilars Action Plan. Limited indications may indeed be an avenue to work with originator manufacturers to help reduce patent litigation that is barring patient access to biosimilars. One would assume that it would take some level of negotiation with the manufacturer of the originator. However, biosimilars with limited indications may be a hornets’ nest for reference manufacturers like AbbVie.

This gets back to the entire issue of extrapolation. From the outset, patients and providers recoiled at the notion of approving a biosimilar product for use in a disease state in which no clinical studies were done. The FDA has been pretty liberal in granting extrapolation to several or all indications for the 11 approved biosimilars. If FDA explored this option as a mechanism for getting biosimilars to the market sooner, it would be sending a new message. That is, the biosimilar drug may be expected to yield similar outcomes compared with the reference drug based on the totality of the evidence, but we’re unwilling for other reasons to give it our approval for those other indications.

Biosimilar Indications Laws or regulations do not exit to prevent doctors from prescribing a biosimilar for a nonapproved indication. Furthermore, health plans and insurers have consistently reported in our own market research that they would not discourage use of a biosimilar for other indications for which only the originator biologic was approved. This assumes the biosimilar is sufficiently less expensive than the originator. As a result, drug makers like AbbVie may be very wary of the limited-indication approach to improve biosimilar access.

Still, some way must be found to break the logjam of litigation on IP. This is a specific target of Commissioner Gottlieb’s. He may take even more creative approaches.

 

 

 

 

 

 

What Is the Biosimilar Pegfilgrastim Market Opportunity?

We’ve covered the contest to bring a biosimilar pegfilgrastim to market, with considerable depth. The progress and setbacks of Mylan/Biocon, Coherus Biosciences, Sandoz, and Apotex have been tracked. Other drug makers are also working on plans towards 351(k) applications for approval. Eventually—likely sooner than later—one or two will hit the market.

Biosimilar Pegfilgrastim, Neulasta®, and Onpro®

Amgen, maker of the originator product Neulasta®, disclosed in its first-quarter financial report that the total sales for the product in the US is $1.0 billion, $146 million for the rest of the world, for a total of $1.15 billion. This means a US market of approximately $4 billion for one year of sales. Amgen also noted that 62% of its first-quarter Neulasta sales are associated with its Onpro® kit. Although the major patents for pegfilgrastim have expired, Onpro is still protected by patent. Onpro does have some significant advantages in that the patient does not need to go to the doctor’s office for an injection after receiving chemotherapy. The sales figures indicate that doctors prescribe it in preference to the injectable form of pegfilgrastim.

Neulasta OnproAt a current 62% marketshare for Neulasta Onpro, the initial total slice of the pie available for biosimilars may only be $1.5 billion (not considering WAC discounts). If we assume a 20% discount, this may be closer to $1.2 billion. It may not seem logical for Amgen to make great efforts to defend its share of injectable pegfilgrastim because of its successful conversion to Onpro. Also, Onpro does have marketable advantages over the injectable form.

The list price of Neulasta is upwards of $7000 per injection, and Amgen does not charge additionally for the Onpro kit. This stance may prove an incentive to health plans and insurers to not encourage biosimilar use over Onpro.

Will Physicians Resist Moving From Onpro to a Biosimilar Pegfilgrastim Injection?

The $1.2 billion to $1.5 billion estimate also assumes that Amgen cannot convert more patients to Onpro prior to approval of a new biosimilar. That would further shrink the revenue opportunity. Physicians may also resist payer efforts and not prescribe the injectable form if they favor the Onpro kit. To the extent that payers may prefer the biosimilar (or otherwise restrict the use of a more expensive originator agent) when it becomes available, that slice of the pie could increase quite a bit. Furthermore, the picture could also change in a few years as biosimilar manufacturers develop delivery systems that gain the same advantages as Onpro.

In its earnings report, Amgen indicated the sales of Neulasta have been decreasing, by 5% from the same quarter last year. This may be the result of movement to other, less-toxic cancer chemotherapies or other treatments to prevent neutropenia and its related infections.

The Onpro market for the rest of the world may be given a boost soon, as Amgen also announced that the European Medicines Agency issued a positive opinion for the drug maker to include the Onpro Kit in its EU label.

As reported in BR&R, Coherus CEO Denny Lanfear thought the pegfilgrastim market may be split in a manner similar to that for filgrastim (i.e., 30%/30%/40% shares for 2 biosimilar makers and the originator). That may possibly mean 30% of a $1.2 billion US market (not $4 billion), if payers do not emphasize the use of the biosimilar over Onpro.

How Will Biosimilars Be Affected by Trump’s Drug Price Reform Measures?

Trump on BiosimilarsWhen President Trump announced the broad strokes of his drug price reform initiative, some of these measures seemed on target to benefit the biosimilars industry. However long awaited, makers of originator biologics seemed not to be worried about its implications. The President may not be able to effect much change, without causing unintended adverse consequences.

According to its blueprint, the Trump Administration “believes it is time to realign the system in four ways: increasing competition, improving government negotiation tools, creating incentives for lower list prices, and bringing down out-of-pocket costs for consumers.”

Increasing competition is critical to improving biosimilar access. But this cannot be achieved with one action. Several areas—some addressed and others not by the blueprint—are key.

 

Reining in Drug Patent Abuse

Aimed squarely at drug makers who try to extend exclusivity through multiple patent filings, this is the one action that could improve biosimilar prospects. Limited biosimilar access is caused by the inability to market these drugs after Food and Drug Administration (FDA) approval. Patent litigation is the number 1 issue here. The President said, “Our patent system will reward innovation, but it will not be used as a shield to protect unfair monopolies.”

Trump Drug Cost Reform BiosimilarsWithout significant overhaul of the drug patent system (or the system for ruling on the validity of patents), this is unlikely to benefit biosimilar manufacturers in the near term. This effort could take many years and may have negative effects on the protection of legitimate intellectual property.

This is likely to result in little relief for the biosimilar industry.

 

Price Disclosures in Consumer Advertising

The fact that originator specialty biologics—the medications targeted for biosimilar competition—cost thousands of dollars may be a revelation to consumers who pay fixed copays for them. President Trump’s plan would require manufacturers to disclose the cost of the drug on direct-to-consumer advertisements.

Biosimilars The assumption is that this would be required across the board, including biosimilars. Would consumers recognize that their Renflexis® biosimilar costs thousands less than Remicade® in terms of wholesale acquisition cost? Not likely. In terms of net cost to the payer (not the patient generally), the price differential is far less. Even if the true costs were posted on consumer advertising, Mr. and Mrs. Smith would still hear or see that Renflexis costs thousands of dollars. They may even be further confused, because their out-of-pocket cost will likely be far less, unless a deductible applies.

 

An Emphasis on Value-Based Purchasing

The Obama Administration was committed to expansion of value-based purchasing. The present administration wants to further explore the potential of this policy, but it has not spelled out any specifics. It could be a boon to biosimilars based on the implications of value-based purchasing itself. After all, biosimilars are in existence to provide better value. More details are needed on its extent and whether implementation will occur through Health and Human Services or through Congress before useful opinions can be rendered.

 

Lower Drug Prices in US, Higher Elsewhere

The United States has very little ability to compel drug prices to rise for health systems in Europe, Canada, or Mexico, for instance, and as a result, lower them in this country. Pharmaceutical companies charge what the market will bear. Unless the Trump Administration can somehow convince the UK to pay more for Rituxan®/MabThera®, Humira®, or Enbrel®, these drug prices will not be altered.

There are reasons these countries pay the prices they do. It is related to their bidding or tender systems and the fact that other countries will exclude coverage at higher prices.

Trump Drug Cost Reform Consider another practical issue—why does a price increase in Germany mean a price decrease in the US (and for whom—Medicare, Medicaid, 340b facilities, commercial plans)? If such a move could be achieved, how does the Administration convince drug makers to apply those greater revenues obtained globally to greater discounts or rebates to Americans? It is more likely that the pharmaceutical industry will pass the increased profits to shareholders.

If these specialty drugs were forced to lower their price in the US, would that apply to biosimilars as well? That may not work towards long-term viability of the industry, depending on the measures taken.

 

Removing Rebates and Improving the Value of Biosimilars

One thing can actually improve cost transparency and possibly force pharmacy benefit managers (PBMs) to change their value model. If the Congress decides that drug rebates run afoul of laws against kickbacks, this could compel far lower wholesale acquisition costs (WACs). It would also have the effect of lowering patients’ cost sharing. Co-insurance is commonly based on the WAC not the net cost of the drug to the payer or PBM.

In this case, biosimilar manufacturers’ true WAC discounts can be applied directly and drive the “rebate trap” out of existence.

Applying this rule to commercial plans, Medicare Advantage, and part D providers would be a direct improvement in the current situation and could lower system-wide health costs. That assumes that manufacturers don’t sense an opportunity to raise prices by say 8% when they no longer have to pay 15% rebates.

 

Missed Opportunity: Using the Negotiating Power of Medicare

If the Administration was interested in reining in drug costs, the first serious step would be to let the Medicare program negotiate with manufacturers. This large purchaser getting its best deals from the natural competitive marketplace. It may require some adjustments in Medicaid “best price” assumptions, however.

It does seem that biosimilar makers could benefit from several of the policy changes proposed by the Trump Administration. However, the blueprint released is just that—weak on details and not specific to avoiding unintended consequences. Furthermore, it does not anticipate the reactive responses of the stakeholders involved. I guarantee there will be much more discussion as the government’s actions are announced.

Lessons for Biosimilars From the Generic Drug Industry

The utilization of generics in the US is vast, upwards of 86% of all prescriptions in 2017, according to the latest research by IQVIA. The pace of generic drug approvals by the Food and Drug Administration is also impressive, with 767 last year. This does not ensure the future of the generic drug industry, however, said Doug Long, MBA, IQVIA’s Vice President of Industry Relations. If we’re not careful, biosimilars in the pipeline could suffer a fate similar to that for newly approved generics.

Doug Long, IQVIA
Doug Long, IQVIA

In his yearly update presented at the Academy of Managed Care Pharmacy 2018 annual meeting on April 25, Mr. Long said that despite near-record numbers of generic approvals over a three-year period, “only 30% of these generics were actually launched. That’s not happened before.” The reason is that the manufacturers, upon receiving approval, reevaluate the marketplace prospects for their product and the competition. “They decide not to throw additional money into a losing proposition,” he stated. In fact, of the 767 generic approvals, only 73 were first-time generics. Ninety percent were simply piling competition onto already crowded drug categories.

He terms it a race to the bottom, but not a death spiral for generics. That is, “we’ve already reached the bottom, and we will come off of it” at some point. Generic drug manufacturers’ reticence to launch will help change the market direction.

Biosimilars have vast potential to save health care dollars, but only if they are launched. In a couple of instances, manufacturers have reviewed their biosimilar positions (Shire, EMD Serono) while early in the pipeline. Though it is reasonable to expect a paring back of prospective biosimilar drug makers, we hoped this would happen once the marketplace becomes saturated. That of course has not happened.

More Evidence of Value in Generics

Although several generic drugs have been associated with steep price increases, the net price change in 2017 for generics was -7.2%, according to Mr. Long. Most of this was the result of large rebates. Despite 86% generic drug prescribing, generics account for only 13% of the revenues. “I think there will be more generic drug shortages as a result of this revenue picture. People are refusing to launch after receiving approval, based on the dynamics of the marketplace,” he said. There will be more patent expirations and opportunities for first-time generics, “but I have less optimism on the biosimilar side.”

“Of 9 biosimilar approvals, we have only 3 launched products,” emphasized Mr. Long, “accounting for just $1 billion in total value of US marketplace in biosimilars.” He was hopeful that biosimilars for Remicade would have “broken the dam,” but this hasn’t happened. “Instead, payers have chosen to take the rebates, not the biosimilars. That resulted in only a 3% marketshare as a result for infliximab biosimilars.”

He noted that the average rebates given to payers and pharmacy benefit managers is 25% for biologics overall. Rebates in the autoimmune area averaged 20%, but payer market research routinely confirms that Janssen’s Remicade® rebates well exceed this figure.

Note: IQVIA is the child of the marriage between Quintiles and IMS.

 

Teva and Celltrion Receive Rejections on Trastuzumab and Rituximab Biosimilars

Celltrion and its partner Teva were dealt a significant blow today, as the Korean manufacturer announced that the latest two biosimilar candidates were rejected by the Food and Drug Administration (FDA).

Celltrion logo1As first reported by Dan Stanton in the Biopharma Reporter, the FDA issued complete response letters as a result of inspection problems uncovered at Celltrion’s manufacturing facility in Incheon, Korea. Celltrion initially receive the negative inspection report in January of this year, which highlighted deficiencies in aseptic practices and processing, and failure to investigate variations in batches.Teva

Under the partners’ pact, signed in 2016, Teva would commercialize the two biosimilars. Teva has a separate concern, however, in that the same Celltrion plant cited by the FDA has been tabbed to produce its CGRP-inhibitor fremanezumab for migraine prevention. This migraine prevention antibody, which also has the potential to reach sales of $1 billion, has a PDUFA date of mid-June.

In a statement published by Mr. Stanton, a Celltrion spokesperson said, “Celltrion is making progress addressing the concerns raised by the FDA in a Warning Letter issued in January and is committed to working with the agency to fully resolve all outstanding issues with the highest priority and urgency.”

The issuance of the CRLs may be extremely poor timing for the partners. Although Mylan signed an agreement with Roche to delay the launch of its approved biosimilar version of Herceptin® until at least 2019, the other competitors have not. Amgen/Allergan expect word on their 351(k) submission within the month, and Samsung Bioepis should hear in the fourth quarter. On the rituximab front, Sandoz should receive word early in the third quarter.

FDA’s Gottlieb to Health Plans: Move Away From Short-Term Rebates on Reference Drugs to Enhance Long-Term Biosimilar Savings

According to Food and Drug Commissioner Scott Gottlieb, MD, the managed care sector’s willingness to accept larger rebates from manufacturers of originator biologics to preserve formulary coverage may seriously hinder the long-term success of the biosimilar industry. And more importantly, the ability to control biologic costs through competition.

FDA Commissioner Scott Gottlieb, MDIn remarks made to a national meeting of America’s Health Insurance Plans’ (AHIP) in Washington, DC, Dr. Gottlieb worried that biosimilar manufacturers may start to believe that “the system is rigged against them.”

In terms of patent litigation, that certainly may seem true. However, Pfizer’s complaint that Janssen is undercutting its discounts by providing plans and insurers additional rebates would seem to be a practice that big pharma has used for years (Pfizer included). Therefore, Dr. Gottlieb is asking payers to turn aside those rebate offers and instead cover the biosimilars, at least for new patients.

He stated that the FDA is “invested in making sure that the new biosimilar pathway works, and that we can help facilitate a robust market for these products. So, we take note when we see market practices that can reduce the incentive for sponsors to invest in the development of biosimilars in the first place.”

Dr. Gottlieb put it to health plans succinctly: “Payors are going to have to decide what they want: The short-term profit goose that comes with the rebates, or in the long run, a system that functions better for patients, providers, and those who pay for care…Do they want to continue to benefit from monopoly rents today, or help generate a vibrant biosimilar market that can help reset biologic pricing—and drug pricing more generally— through competition.”

He suggested that payers help increase biosimilar uptake by lowering or waiving copays for biosimilars or removing prior authorization requirements when biosimilars can be prescribed. “FDA has a strong interest in seeing the biosimilar market grow,” he reiterated, “but some of that is going to be up to the choices you all make.”

Teva’s Syprine Generic Priced 14% Below Jacked Up Valeant Product Price

In an announcement that surprised few, Teva Pharmaceuticals announced that its generic version of trientine hydrochloride (Syprine®) for the treatment of Wilson’s disease will be sold for a very nongeneric price. Also unsurprising, Teva executives did not address the fact that the price of Syprine had been jacked up astronomically by Valeant Pharmaceuticals only recently, to $21,267 in 2015 froTeva Pharmaceuticals, maker of the new generic for Syprinem a mere $652 in 2010. Also, Syprine had been available since 1969.

An outrage? Yes of course, but not surprising for a number of reasons. Wilson’s disease is an extremely rare disease, on the order of 5,000 patients. At a price of $652 per person, the resulting revenue might be a paltry $3.2 million.

In preparation for launch, Teva evidently looked at its options for discounts based on the current list price, not the pricing from several years ago. This is also unsurprising. However, the discount offered is not great—$18,375 for a bottle of 100 pills.

Wilson’s disease is the result of a genetic disorder of the liver that causes hepatic cells to accumulate and store excess copper. The disease impairs the liver’s ability to excrete copper into the bile and then into the gastrointestinal tract. The copper build-up is toxic to the liver, and can cause cirrhosis and death. Ordinarily treated with d-pencillamine, patients can be intolerant to it and require additional therapy, such as trientine.

As most payers know, generic pricing today is unlike generic pricing of the past. Even relatively simple compounds, available for decades, are subject to competitive forces like number of mBiosimilars news, reviews, and reportsanufacturers and supply. However, demand seems to be the one market force that is not in play. With so few potential patients, overall demand would seem low, particularly with pencillamine already available to treat patients.

Teva’s pricing could have reflected the reality of 2010 or the reality of 2018. The company chose the latter, which so many others would also do today. If an additional generic was introduced into the market dynamic (though unlikely due to the demand), pricing (or at least net costs) could be strongly affected.

Payers hope to see this dynamic play out in the biosimilars arena as well. With a single biosimilar agent competing against the reference product, the retail cost discounts have been small. But with the introduction of additional competition, net costs (if not wholesale average costs) will fall rapidly.

Fourth Herceptin® Biosimilar Being Evaluated by FDA

The end of 2017 has been bustling with oncology biosimilar news.

On December 20, 2017, the Food and Drug Administration (FDA) accepted Samsung Bioepis’ application for SB3, its biosimilar version of trastuzumab. The drug would be the fourth to undergo evaluation by the FDA, and may pack on the pressure for Mylan and Biocon’s product Ogivri, which is the only approved biosimilar trastuzumab.

Mylan/Biocon’s biosimilar was approved earlier this month. As a reminder, though, there are no plans to bring their version of trastuzumab to market immediately. Indications are that Breast Cancerowing to an agreement with Roche, they may not launch until 2019 (at the earliest). Trastuzumab biosimilar entries by Celltrion and Amgen/Allergan will not receive FDA decisions until the second quarter of next year. It is unclear whether these manufacturers will decide to launch their versions at risk, thus stealing the initiative from Mylan and its partner. In any case, competition should be vigorous when these products launch (which should be within 12 months of the first launch, assuming FDA approvals). At present, the question is open as to whether Samsung will market SB3 if it receives a positive decision sometime in the fourth quarter of 2018.

In related news…A survey of 200 oncologists revealed that their comfort levels with prescribing biosimilars is widespread. Cardinal Health published a report based on the survey on December 20.

Although these result may relate to oncologists’ multiyear experience with Zarxio® (filgrastim), 82% of the oncologists responding to the survey specifically indicated that they would have no qualms about using biosimilars to treat patients with breast cancer in an adjuvant setting or if they had metastatic disease. As indicated above, no biosimilars are currently marketed for this indication. Furthermore, they expect significant cost savings when using biosimilars: Two thirds said that cost savings with biosimilars are either extremely or very important in their prescribing decision. That’s pretty much the point of biosimilars, isn’t it?

A Pre-Holiday Gift for Pfizer—a Second Infliximab Biosimilar Approval. Now What?

On December 14, Pfizer got an early Christmas present, the approval by the Food and Drug Administration (FDA) of the second infliximab biosimilar in which it has a stake. First came Inflectra® in 2016, and here comes Ixifi™ (infliximab-qbtx). Unlike Inflectra, which Pfizer markets for Celltrion, Ixifi is Pfizer’s alone—Web image for headera product that was under development at the time of the acquisition.

This of course puts Pfizer in an interesting position. Ixifi would be the third infliximab biosimilar to reach the market, after Inflectra and Samsung/Merck’s Renflexis™. True, Inflectra has limited marketshare in the US, and competition from more heavily discounted Renflexis could compound the situation.

It seems that Ixifi is not intended to reach the US market at all, and may be marketed in other countries where the Celltrion agreement does not hold sway. However, this begs the question: Why did Pfizer decide to go apply for a 351(k) application for FDA approval? That is unclear at this time. Perhaps they will use this biosimilar as insurance if Inflectra does not perform as promised. On the other hand, Pfizer could license it to another manufacturer and collect additional royalties from its sales in the US and overseas.

For those of you who guessed the last choice, congratulations! Under a deal signed in early 2016, Sandoz obtained the rights to market this agent in the European Economic Area. This would enable Pfizer to earn cash rewards and other prizes from two biologics in the same biosimilar category.