Five years after Congress gave the agency the authority to approve
supposedly cheaper alternatives to budget-busting biologics, the FDA has
cleared only two. “I know people are anxious to see more progress and
certainty,” admits Janet Woodcock, MD, head of the FDA’s Center for Drug
Evaluation and Research. “Most of the progress so far has been under
the hood.”
Pfizer’s Inflectra will compete with Janssen’s Remicade, the
reference drug. Zarxio (marketed by Novartis subsidiary Sandoz) competes
against both Amgen’s Neupogen (filgrastim) and Teva’s Granix
(tbo-filgrastim); the latter was approved as a biosimilar in Europe but
as a biologic in the U.S. Pfizer says it will be selling Inflectra by the end of 2016, once all
legal barriers fall. Hospital pharmacists are eagerly awaiting its
arrival. In usage, infliximab is typically at or near the top among the
drugs in a hospital pharmacy. Hospitals use it for rheumatoid arthritis,
Crohn’s disease, colitis, and a host of secondary and tertiary
off-label purposes. Moreover, doses typically escalate. Remicade’s cost
was $3,159 per administration and $18,129 per beneficiary in 2013,
according to a June 2015 report from the Medicare Payment Advisory
Commission.
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But Zarxio’s early experience shows that biosimilars, when first
introduced, face hurdles. “Our P&T committee has not reviewed Zarxio
yet and we have not used it in patient care,” says John Fanikos,
Executive Director of Pharmacy at Brigham and Women’s Hospital in
Boston, Massachusetts. “Granix was not approved as a biosimilar but
through the biologics license application pathway. Since its list of
indications is comparable to Neupogen but not all-inclusive, we added it
to the formulary as our preferred growth factor.”
When Zarxio first came to market, it was more expensive than Granix
but less expensive than Neupogen. “We could not see a reason to use
Zarxio on the inpatient or outpatient sides of care,” Fanikos explains.
“Sandoz has recently come forward with a contract favorable in terms of
pricing, but the other companies have made adjustments in their pricing,
too.”
Moreover, physicians haven’t been clamoring for Zarxio. “I was
somewhat shocked; many of physicians had no idea what the biosimilar
process even is,” states one hospital pharmacist who did not want to be
named. “Even those that do would have to be aware of the differences
between Neupogen, Granix, and Zarxio. Physicians who have prescribed
filgrastim for years are likely to keep prescribing Neupogen rather than
going down the list to filgrastim alternatives with suffixes,” he adds.
Even if physicians were totally up to speed on biosimilars, neither
Granix nor Zarxio is available in a vial. Because children use
filgrastim in lower doses, children’s hospitals need it in a vial. Their
only alternative is Neupogen. Pediatric hospitals such as St. Jude’s
Children’s Hospital and Children’s Healthcare of Atlanta make up about
5% to 10% of the client base for Vizient, Inc. “That is very influential
when organizations like those cannot use a product in question,” says
Steven Lucio, Senior Director of Clinical Solutions and Pharmacy Program
Development for Vizient, a large group purchasing organization that
represents academic medical centers, pediatric facilities, community
hospitals, integrated health delivery networks, and nonacute health care
providers. Vizient represents almost $100 billion in annual purchasing
volume.
Biosimilars in different therapeutic categories face different
challenges. For example, Pfizer won’t have to deal with a Granix-like
competitor once Inflectra comes to market. The biosimilar will go
head-to-head with Remicade. However, infliximab is a mono clonal
antibody and therefore a more complicated biologic than filgrastim.
Infliximab patients are not immune-compromised, which means the
prescribing physician has to be much more concerned about potential side
effects. Filgrastim patients are already immune-compromised.
“Rheumatologists, dermatologists, and other physicians using infliximab
will have to have more of a clinical conversation with patients before
using Inflectra since it is not an exact copy of Remicade,” Lucio says.
“And that will pose a higher hurdle for its use.”
The FDA Is Part of the Problem
The FDA’s assignment of suffixes is one of a number of controversial
regulatory issues that stymie acceptance of biosimilars. The agency
published a proposed rule on suffixes
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in the summer of 2015 and has still not produced a final rule. The
agency received different opinions from different parties as to whether a
suffix ought to mimic a biosimilar marketer’s name, as is the case with
filgrastimsdnz, or whether the suffix should not conjure up the
marketer’s name, or whether the reference drug ought to have a suffix,
which is not now the case. Neupogen is simply filgrastim.
Numerous, important guidance documents are also stuck in the FDA’s
maw. The FDA’s slow pace is not fully its own fault. Congress has never
appropriated segregated funds for the biosimilars program. As part of
the Patient Protection and Affordable Care Act (PPACA), the agency was
allowed to charge companies user fees for submitting applications. But
given the regulatory uncertainty, few applications have been submitted.
Instead, the agency has charged companies for meetings during which the
FDA advises them on what they need to do prior to submitting an
application. Those fees totaled $6 million, $13 million, and $23.8
million in fiscal years (FY) 2013, 2014, and 2015, respectively.
Meanwhile, a study by the consulting firm Eastern Research Group (ERG)
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commissioned by the FDA had the agency spending $23.6 million in FY
2013, $21.4 million in FY 2014, and $28.7 million in FY 2015. That $74
million total compares to the $42 million the agency raised in user
fees. Still, the mismatch in funding only partly explains why the agency
has missed quite a few deadlines it set for itself in terms of
answering sponsors’ questions posed during user-fee meetings.
“The FDA infrastructure put into place for BsUFA I is insufficient to
meet the objectives and manage the workload it currently faces,” says
Hubert C. Chen, MD, Chief Medical Officer of Pfenex. “This is consistent
with the experience of Pfenex, as we have worked with the agency across
multiple programs in diverse therapeutic areas.” BsUFA is the
Biosimilar User Fee Act included in the PPACA.
Dr. Woodcock paints the early troubles of biosimilars with the brush
of perspective. She argues the small-molecule generic-drug approval
program launched by the Hatch-Waxman law in 1984 took a while to gain
momentum. “We didn’t have success overnight with that program,” she
says. “But today, over 88% of prescriptions are filled by generics.”
Of course, three decades ago the eight leading drugs in U.S. sales
were not expensive biologics, all costing Medicare, for example, more
than $1 billion a year and sapping the savings of Americans in all walks
of life. So the exigencies surrounding the need for faster biosimilar
introductions are magnitudes greater than they were for chemical
generics in the 1980s. Express Scripts, one of the largest U.S. pharmacy
benefit management organizations, estimates potential savings of $250
billion in the next decade with the approval of just 11 biosimilar
products.
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A 2014 RAND Corporation study estimates that biosimilars will lead to a
$44.2 billion reduction in direct spending on biologic drugs from 2014
to 2024, with anti–tumor necrosis factor agents such as infliximab
accounting for the largest chunk of savings (Figure 1).
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However, because of the shortage in funding, the FDA’s progress on
biosimilars may well get worse before it gets better. As of January 21,
2016, 59 proposed biosimilar products to 18 different reference products
were enrolled in the Biosimilar Product Development (BPD) Program.
“What I am concerned about is that the program is going to explode and
we will not have the staff to handle it,” Dr. Woodcock says.
At hearings of the House health subcommittee on February 4, 2016,
Mary Jo Carden, RPh, JD, Vice President of Government and Pharmacy
Affairs for the Academy of Managed Care Pharmacy expressed concern about
the ability of biosimilars to reach their full potential in the United
States because of incomplete guidance from the FDA, confusing federal
and state regulatory guidance, and lack of clarity related to payment,
coding, and reimbursement.
FDA Guidance Documents Are Coming Slowly
The FDA cleared Inflectra two months after the House subcommittee
hearings. Manufactured by Celltrion, it is being marketed in the U.S. by
Pfizer’s Hospira subsidiary. Inflectra is approved for a half-dozen
uses, including psoriasis and five other conditions in which the immune
system attacks the body’s tissues. The drug helps reduce inflammation
and control the immune system, which slows those diseases. Remicade,
first approved in 1998, is the top-selling medicine of Johnson &
Johnson (Janssen’s parent company), with sales of $6.56 billion in 2015.
Inflectra and Zarxio were approved while many critical FDA guidance
documents were incomplete. Although the Biologics Price Competition and
Innovation (BPCI) Act does not require the FDA to issue guidances before
approving a biosimilar application, the FDA understands the importance
of guidances in helping to ensure successful implementation of this new
pathway.
Perhaps the most important upcoming guidance concerns
interchangeability. The FDA did not deem Inflectra interchangeable with
Remicade; the same was true for Zarxio, which is not interchangeable
with Neupogen. If they were interchangeable, a pharmacist could
substitute the biosimilar for the reference product without checking
with the physician first. The FDA has not yet established the standard
it will use when judging whether a biosimilar is interchangeable.
The FDA expects to publish the eagerly awaited draft interchangeability guidance by the end of 2016. To meet the standard for
interchangeability,
an applicant must provide sufficient information to demonstrate
biosimilarity and also to demonstrate that the biological product can be
expected to produce the same clinical result as the reference product
in any given patient. The applicant must also demonstrate that if the
biological product is administered more than once to an individual, the
risk in terms of safety or diminished efficacy of alternating or
switching between the use of the biological product and the reference
product is not greater than the risk of using the reference product
without such alternation or switching.
“Interchangeability is the thing about biosimilars that makes a lot
of physicians nervous,” explains Donald Miller, PharmD, a Professor of
Pharmacy Practice at North Dakota State University. “Interchangeability
means a pharmacist could switch products without physician
authorization, and thus potentially expose a patient to a product with
slightly different immunogenicity without the physician being aware of
it.” Dr. Miller is a member of the FDA advisory committee that
recommended approval of Inflectra in February.
While the FDA will determine interchangeability, the states will
control automatic substitution—and states are already approving a
variety of limits on that still-to-come process.
Even if pharmacists don’t have to notify physicians when a biosimilar
is rated interchangeable, pharmacists could still be in an
uncomfortable position. Pharmacists may feel that they are “under the
microscope” when switching to a biosimilar based on their own judgment,
and they may hope that any unilateral substitution doesn’t come back and
cause trouble for them, for whatever reason.
However, the publication of draft guidance does not suddenly quiet
controversy. That wasn’t the case after the FDA published its draft
labeling guidance in March.
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The guidance says biosimilars can use the clinical data gathered by
reference product sponsors. That is a point of controversy, with some
companies and patient groups saying the company producing the biosimilar
ought to include its own clinical trial data on the label. Regulators
would also allow biosimilar labels to include the statement that the
product is biosimilar to the reference product.
That doesn’t mean the biosimilar’s label has to be identical to the
reference product label. It does not. It needs to reflect currently
available information necessary for the safe and effective use of the
product. Certain differences between the biosimilar and reference
product labeling may be appropriate. For example, biosimilar product
labeling conforming to the physician labeling rule and/or pregnancy and
lactation labeling rule may differ from reference product labeling
because the reference product labeling may not be required to conform to
those requirements at the time of licensure of the biosimilar product.
In addition, biosimilar product labeling might have to reflect
differences such as administration, preparation, storage, or safety
information that do not otherwise preclude a demonstration of
biosimilarity.
The Generic Pharmaceutical Association (GPhA) and its Biosimilars
Council praised the draft guidance. Chip Davis, Jr., GPhA President and
Chief Executive Officer, says the guidance takes steps to avoid
confusion and in many aspects mirrors the protocol for the labeling of
generic drugs. For example, a statement defining biosimilarity would be
included rather than lengthy and already established scientific data
proving biosimilarity. And immunogenicity details would mirror the label
content of the reference product. “GPhA and the council are especially
pleased that the proposed label contents avoid causing confusion or
raising unnecessary questions about the safety and efficacy of
biosimilar products,” he adds. “We also commend the agency for
postponing guidance on interchangeable biologic labeling at this time.”
Andrew Powaleny, Senior Manager of Communications for Pharmaceutical
Research and Manufacturers of America, declined to provide his group’s
views on the draft guidance in advance of the deadline for written
comments.
The Undermanned FDA
The FDA’s tentative decision in the draft labeling guidance not to
require biosimilar companies to cite their own data from their own
clinical trials may be a practical necessity given that the FDA clearly
does not have the staff to review all that data. Budget begets staff, of
course, and budgets have not been kind to the FDA’s biosimilars
program. The ERG study proved that.
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User fees have simply not been sufficient for the FDA to provide
necessary staff resources for prospective biosimilar marketers who pay
for one of five types of meetings the FDA offers under its BsUFA
program. The number of those meetings has far outpaced what the FDA
projected when the user-fee program was put in place. There were 59 BPD
program participants as of November 2015. When the BsUFA went into
effect, the FDA had anticipated a total of 11 participants in the BPD
program by FY 2015.
In December 2015, the FDA held a meeting to get input on the changes
it needs to the biosimilar fee program. Any modifications would be made
by Congress when it reauthorizes the BsUFA. David R. Gaugh, RPh, Senior
Vice President for Sciences and Regulatory Affairs at the GPhA, says the
meetings the FDA holds with potential biosimilar sponsors are extremely
useful, but at times there are uncertainties about the outcomes. “With
that said, the meetings should have well-defined objectives, clear
outcomes, and meaningful decisions about future development options,” he
explains. “Where the outcome or guidance is unclear to the sponsor,
there should be an opportunity for a timely follow-up teleconference to
promote better understanding, communication, and transparency.”
Critics Complain About Medicare Policy, Too
Criticism over biosimilar policy has also encompassed the Centers for
Medicare and Medicaid Services (CMS). In October 2015, the CMS
clarified its policy on reimbursement for biosimilars, which are paid
for mostly under Medicare Part B, where physicians administer the drugs
in their offices or outpatient infusion clinics provide the drugs. But
reimbursement also goes through Part D when patients are able to
self-administer. The new policy managed to offend nearly every
pharmaceutical sector; both generic and brand-name industry associations
decried a number of aspects of the new policy, in some instances the
same aspect.
The final rule clarifies that the payment amount for a biosimilar is
based on the average sales price (ASP) of all National Drug Codes
assigned to the biosimilars included within the same billing and payment
code.
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So all biosimilars citing Remicade as their reference drug would be
paid the same. This is the way Medicare pays for chemical generics,
which are considered multiple-source drugs. The CMS would assign the
first biosimilar, such as Zarxio, a code under the Healthcare Common
Procedure Coding System (HCPCS). All other Remicade biosimilars would
have the same HCPCS code. Zarxio’s code is Q5101 Injection, Filgrastim
(G-CSF), Biosimilar, 1 mcg. Zarxio would then pick up a modifier to help
track its use and potential adverse effects. For Zarxio, that would be
ZA-Novartis/Sandoz.
Sandie Preiss, Vice President of Advocacy and Access for the
Arthritis Foundation, says, “We believe that treating biosimilars as
multiple-source products stands counter to other biosimilar policies and
the intent of Congress in passing the Biologic Price Competition and
Innovation Act. Further, this proposal is not consistent with other CMS
reimbursement policies, which treat biosimilars as single-source drugs
within certain Part D programs and Medicaid.”
The Cost of Biosimilars Is at Issue
Based on the experience in Europe, where biosimilars have been
available longer, it had been a given that a biosimilar coming onto the
U.S. market would have a price somewhere in the neighborhood of 15% to
25% lower than the reference drug. But early anecdotal experience with
Zarxio doesn’t bear that out.
Vizient’s Lucio says the prices of Neupogen, Granix, and Zarxio have
all come down between 15% to 20% since Zarxio’s introduction in
September 2015. Typically Neupogen is the most expensive of the three,
with Granix and Zarxio trading second and third place depending on the
market they are selling to. But the price difference between the three
is normally not great. “Until you have two or three biosimilar providers
for same-molecule competitors to branded [products], biologicals will
not be priced definitively lower,” Lucio says.
Some of the other biosimilars now in the application phase at the FDA
(there are seven or eight, but the FDA doesn’t confirm those numbers)
will be much more likely to be self-administered than Zarxio or
Inflectra. That means they will ostensibly be available for retail
purchase, and therefore reimbursed under Medicare Part D and outpatient
drug plans in the private sector or through the PPACA. A study from the
consulting firm Avelere, published in April, found that Medicare
patients in Part D plans are likely to pay more for biosimilars than for
the reference drug.
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That is because the Part D plans, under federal law, get a discount
from the brand-name manufacturer when a Medicare recipient hits the
so-called “doughnut hole,” the gap in Part D coverage where a senior
must pay more of the cost of a drug. The reference-drug manufacturer
must provide rebates to Part D plan members who fall into that coverage
gap. Biosimilar marketers cannot match those rebates. “Any voluntary
point-of-sale discounts would be viewed by the OIG [Office of the
Inspector General] as a kickback and would likely lead to punitive
action,” says Caroline Pearson, Senior Vice President at Avalere.
“The unintended consequence of the ACA is that consumers have a
financial disincentive to switch to a lower-cost biosimilar,” Pearson
adds. “While the Medicare program will save money if beneficiaries take
biosimilars, higher consumer out-of-pocket costs are a barrier to
patient adoption.”
It may be that biosimilars will become a boon to patients, payers,
and providers. But until the FDA moves more quickly to approve
biosimilars and they start to populate therapeutic categories in numbers
that lead to lower prices, their success won’t be a given.
Author bio:
Mr. Barlas, a freelance writer based in Washington, D.C., covers topics inside the Beltway.
