Biosimilars are becoming increasingly important in healthcare as they offer a lower-cost alternative to biologic drugs, which can be expensive for patients, governments, and insurers. These biologic medicines, which are highly similar to existing biological products and are designed to be as effective and safe as the brand name drugs, offer the potential to provide more affordable treatment options to patients. However, the regulatory landscape for biosimilars is still evolving, and there are legislative efforts to address several perceived impediments to biosimilar approvals and marketing. To address some of the perceived impediments, various bills have been introduced since Congress passed the Biologics Price Competition and Innovation Act (BPCIA) in 2010. In this article, we will explore the latest updates in biosimilar legislation and their potential impact on patients, healthcare providers, and the pharmaceutical industry.
One impediment is that various states and insurers will not allow pharmacists to substitute a biosimilar unless the FDA declares it to be “interchangeable.” Acquiring interchangeable status requires the product to undergo switching studies whereby participants must alternate between the biologic and the biosimilar. These studies can cost millions of dollars and further delay market access. In November 2022, Sen. Mike Lee (R-Utah) introduced the Biosimilar Red Tape Elimination Act. The Bill aims to reduce health care costs and increase access to biosimilar drug products by eliminating switching studies as a requirement to obtain an “interchangeability” designation from the FDA. The interchangeability designation allows pharmacists to substitute the reference product for the biosimilar without requiring physician permission. Under Sen. Lee’s proposed Bill, corporations could more easily establish interchangeability, and therefore, patients could more easily obtain their biologic medications at a lower cost.
In January 2023, the biosimilar landscape saw the emergence of three new Bills that could have significant implications for the future of biologic medicines. Sen. Amy Klobuchar (D-MN) introduced the Stop STALLING Act and the Preserve Access to Affordable Generics and Biosimilars Act. Sen. John Cornyn [R-TX] introduced the Affordable Prescriptions for Patients Act of 2023.
Another impediment is that some drug manufacturers have submitted numerous or baseless citizens petitions so that the FDA would delay competing manufacturers’ biosimilar or generic approvals. The Stop STALLING Act seeks to deter branded pharmaceutical companies from filing what it claims is a “sham” citizen petition with the FDA in order to interfere with the regulatory approval process for competitors’ generics and biosimilars. Such delays prevent patient access to affordable medication. The Bill would give the FTC enhanced authority to take action against companies that file these sham petitions to delay market entry. The FTC could “commence a civil action to recover a civil penalty and seek other appropriate relief in a district court of the United States against any person that submitted or caused to be submitted” a petition (e.g., a “citizens petition”) if the FTC has reason to believe it is a “sham” petition.
Pay-for-delay deals, the practice in which drug companies use pay-off agreements to delay the introduction of cheaper substitutes, is another impediment. The Preserve Access to Affordable Generics and Biosimilars Act would prohibit anticompetitive “pay-for-delay deals” that prevent or delay the introduction of affordable generics. The bill targets “reverse payment” settlement agreements which are categorized as “allow[ing] a branded company to share its monopoly profits with the generic company as a way to protect the branded company’s monopoly” and “unduly delay the marketing of low-cost generic drugs contrary to free competition, the interests of consumers, and the principles underlying antitrust law.” These deals increase the cost of prescriptions and impose significant costs on our health care system.
Finally, Sen. Cornyn’s Affordable Prescriptions for Patients Act would curb drug companies’ abuse of patents through “product hopping,” where companies extend exclusivity by switching patients to a new, slightly changed, version of the branded drug while the older version succumbs to generics. Some examples of this behavior include destroying the inventory of the old drug, pulling it from the market, aggressively raising its price, badmouthing the old drug, or even diminishing its safety. As a result of this conduct, patients are stuck paying more for a drug that is substantially similar to the old one.
Relatedly, on February 22, 2023, Sen. Elizabeth Warren along with Sen. Bernie Sanders and Representatives Katie Porter and Pramila Jayapal sent a letter to Kathi Vidal, director of the United States Patent and Trademark Office (USPTO), arguing that Merck’s development of a subcutaneous version of the biologic drug Keytruda® (pembrolizumab) appears to be an example of anti-competitive business practices, including double-patenting, patent thicketing, product hopping, and evergreening.
Thus, while biosimilars are increasingly important in reducing healthcare costs and increasing patient access to lifesaving medicines, there are various perceived impediments to biosimilar approvals and marketing that will need to be addressed. It is clear that the regulatory landscape for biosimilars is evolving, and we can expect to see more legislation in the coming years as the biosimilar industry continues to grow.