A detailed pathway for FDA approval of biosimilars was signed into law on March 23 as part of H.R. 3590, The Patient Protection and Affordable Care Act. That single provision ended years of debate and is considered a major achievement for the industry.
This new law also contains some tax credits for therapeutic discovery projects and encouragements to certain types of research—both beneficial for the industry. The negatives, however, include a new tax on medical devices and drug sales.
Ultimately, the success or failure of this extensive and highly detailed law, for biotech, will rest upon unforeseen consequences. Specifically, given the nation’s deep debt, will the funds identified for biotech programs be available? If the law results in rationed care, will payers support biotech’s novel, often initially expensive, therapeutics and diagnostics? To what extent will research funds be diverted toward research targets specified in this law? If government picks the winners and losers, will its choices be the right ones? [See sidebar on page 3 for think-tank and industry reaction to H.R. 3590.]
“This bill includes an historic provision that creates a pathway to enable the U.S. Food and Drug Administration to approve biosimilars,” wrote BIO president and CEO James Greenwood, in a prepared statement. Like the version passed by the Senate on Christmas Eve, this bill provides a 12-year period of exclusivity for clinical data.
That period is seven years longer than that granted to traditional pharmaceuticals under the Drug Price Competition and Patent Term Restoration Act (the Hatch-Waxman Act of 1984) because of biologics’ greater complexity, according to John Wetherell, J.D., partner and co-leader, national life sciences and nanotechnology industry groups, Pillsbury Winthrop Shaw Pittman.
Gaining Congressional authority to develop an approval pathway has long been a hurdle in creating biosimiliars in the U.S. Section 7002 of this new law includes detailed information regarding the approval process for biosimilars. It demands analytical, animal, and clinical studies that include pharmacokinetics and pharmacodynamics and immunogenicity studies. Biologics made under this pathway will be considered interchangeable if they are biosimilar to the reference product, if they produce the same outcome, and if the risks of switching between the reference product and the biological product are not greater that using the reference product.
Patent disputes regarding biosimilars also are addressed in section 7002. In the case of disputes, the company sponsoring the biosimilar and the company holding the patents to the reference drug have 15 days to agree on which patents, if any, constitute infringement. The law also details the subsequent steps and time frame for each of those steps if no agreement is reached. These actions could speed infringement cases through the courts, providing a speedy trial.
Part of the interest in developing a regulatory pathway for biosimilars is based upon the consumer cost savings that occurred after the Hatch-Waxman Act was enacted. Generics, on average, cost 80% less than their branded counterparts. Estimates of consumer cost savings possible through biosimilars, in contrast, range from about 10 to 30%. “The savings to the Federal Government generated as a result of the enactment of this subtitle shall be used for deficit reduction,” the subsection concludes.