Biosimilar Substitution: US State Laws Require Physician Communication And, In Some Cases, Lower Prices
Executive Summary
Bills allowing pharmacies to substitute biosimilars for reference biologics have been enacted in all but six states. Interactive map notes state-by-state provisions.
States are ready for the US FDA's future approval of interchangeable biosimilars. As of June 4, 44 states and Puerto Rico had enacted laws allowing pharmacies to substitute an interchangeable biosimilar in place of the prescribed biological product.
Under the federal biosimilars statute, FDA is to determine if a biosimilar meets specific standards to be deemed interchangeable, and nearly all state laws specify that such a designation is necessary for substitution. FDA has not granted this status to any of the 11 biosimilars approved to date, but it could do so within the next few years. The ability of pharmacies to dispense interchangeables in place of the prescribed biologic product will be necessary for their success.
The issue of biosimilar substitution was controversial when states first began introducing substitution bills, as innovator companies and the Generic Pharmaceutical Association (now the Association for Accessible Medicines, or AAM) feuded over provisions that could affect how easy it is to switch from brand-name biologics to biosimilars.
In 2014, the two sides agreed to compromise language on pharmacists informing prescribers when they make the substitution. Rather than requiring physician "notification" of the change, legislation calls for pharmacist "communication" with the prescriber about the specific product provided to the patient, including the name of the product and the manufacturer. Such communication may be conveyed through electronic medical records if such a system is available. (Also see "Biosimilar Substitution: 'Devil' Is In Barriers To Switch In State Laws" - Pink Sheet, 25 Jan, 2016.)
All of the biosimilar substitution measures enacted into law at the state level have a provision requiring physician communication.
Nearly all the enacted bills have a provision requiring physician communication. It is one of the five principles of biosimilar substitution that the Biotechnology Innovation Organization (BIO) advocated be included in state laws.
BIO also recommended that substitution should occur only when FDA has designated a biologic product as interchangeable; the prescribing physician should be able to prevent substitution by writing "dispense as written," or "brand medically necessary;" the patient should be notified of the substitution; and the pharmacist and physician should keep records of the substitution.
These key provisions are included in many state laws, along with a provision requiring the state to maintain a public or web-based list of permissible interchangeable products. (See interactive map of state-by-state provisions).
State substitution legislation generally is not controversial, said Tara Ryan, AAM's vice president of state government affairs. She noted that AAM is part of a coalition that backed a model bill introduced in several state legislatures. It includes provisions requiring an FDA designation of interchangeability, allowing doctors to prevent substitution and requiring pharmacists to inform providers or patients of substitution.
Amgen Inc. said in a statement that the language adopted by the coalition places an appropriate emphasis on electronic technology to ensure accurate medical records, while creating a clear pathway for the substitution of interchangeable biologics when approved by FDA.
Pricing Matters
Several state laws have requirements related to pricing. The National Conference of State Legislatures, which has a database of statewide legislation related to biosimilar substitution, noted that enacted laws in Colorado, Georgia, Illinois, North Carolina and Texas require that any authorized substitution must be for a product with the lowest cost.
West Virginia's law specifies that a pharmacist may substitute only when there will be savings to the buyer and that all savings in the retail price shall be passed on to the purchaser.
Kentucky's law also requires a pharmacist to dispense the lowest-priced interchangeable product in stock. The requirement can be set aside at the direction of the patient at the point of purchase or by the patient's practitioner. And West Virginia's law specifies that a pharmacist may substitute only when there will be savings to the buyer and all savings in the retail price shall be passed on to the purchaser.
Some state laws also specify that pharmacists are immune from liability for making a substitution.
The last three states to enact legislation were Nevada (May 26), Vermont (May 30), and Connecticut (June 4). Legislation is expected to be enacted in the six remaining states. Alaska state legislators passed a bill at the end of April which has yet to be signed by the governor.
Laying Groundwork For Interchangeables
FDA and biosimilar sponsors also are preparing for the advent of interchangeables.
FDA released a draft guidance, "Considerations on Determining Interchangeability with A Reference Product," in January 2017. The document discusses the types and amount of data needed to support a designation, the design and analysis of clinical switching studies, and considerations for developing presentations for proposed interchangeable products. (Also see "Biosimilars: Postmarketing Data Alone Not Enough For Interchangeability" - Pink Sheet, 17 Jan, 2017.)
FDA Commissioner Scott Gottlieb noted in April that the agency is working on a suite of policies to try to facilitate market entry of biosimilars and is updating the January 2017 draft guidance to try to create a lower hurdle for companies to demonstrate interchangeability. (Also see "US FDA Biosimilar Guidance Update Will Relax Interchangeability Standards" - Pink Sheet, 21 Apr, 2018.)
Sandoz Inc. has done studies evaluating the impact of switching from reference medicines to three of its biosimilars: Zarxio (filgrastim-sndz), which references Amgen's Neupogen (filgrastim); Erelzi (etanercept-szzs), which references Amgen's Enbrel (etanercept); and GP2017, which references AbbVie Inc.'s Humira (adalimumab). Zarxio and Erelzi are licensed in the US, while GP2017 is under review with a November user fee date. (Also see "Biosimilar Switching Studies Show No Adverse Efficacy Or Safety Effects, Researchers Say" - Pink Sheet, 7 Mar, 2018.)
Boehringer Ingelheim GMBH is conducting a switching study intended to support an interchangeable designation for Cyltezo, its approved biosimilar to Humira. (Also see "Humira Biosimilar Interchangeability: The Race Begins" - Pink Sheet, 30 Jul, 2017.)
It is uncertain when a biosimilar will receive an interchangeable designation. FDA's Leah Cristl, associate director for therapeutic biologics in the Center for Drug Evaluation and Research, noted at the Drug Information Association's 2017 annual meeting that she expects to see these products coming to market within the next two years, and hopefully sooner. (Also see "Best Of Biosimilar Agreement: FDA, Industry Tout Written Response, Pre-Submission Meeting" - Pink Sheet, 29 Jun, 2017.)
Patent, Commercial And Educational Hurdles
Meanwhile, companies are facing other hurdles to market, particularly yet-to-expire patents by innovator companies.
Of the 11 biosimilars approved to date, only three have launched: Sandoz's Zarxio, Celltrion Inc./Pfizer Inc.'s Inflectra (infliximab-dyyb), a biosimilar to Johnson & Johnson's Remicade; and Samsung Bioepis Co. Ltd./Merck & Co. Inc.'s Renflexis (infliximab-abda), another Remicade biosimilar.
"So many things still have to happen until we have a robust market." -- AAM's Ryan
The most recent approval was Mylan NV's Fulphila (pegfilgrastim-jmbd), a biosimilar to Amgen's Neulasta (pegfilgrastim), which cleared FDA on June 4. Mylan said it plans to launch the product "in the coming weeks." (Also see "Mylan Is First To Clear US Neulasta Biosimilar Hurdle; At-Risk Launch May Not Be Risky" - Pink Sheet, 5 Jun, 2018.) (Also see "Mylan's Fulphila Approval: Lack Of US FDA AdComm May Be A Positive For Biosimilar Industry" - Pink Sheet, 15 Jun, 2018.)
Pfizer and Merck's experiences with their infliximab biosimilars show the commercial challenges sponsors face.
J&J has been able to hold onto 95% of the infliximab market through aggressive contracting with insurers. Pfizer filed suit in September seeking a preliminary and permanent injunction barring J&J from continuing its allegedly anticompetitive practices, including exclusionary contracts, and trebled money damages. Direct and indirect purchasers filed similar class action complaints, and Walgreen Co. and Kroger filed a separate suit on June 6. (Also see "Biosimilar Antitrust Pressure On J&J Grows As Walgreen, Kroger Sue Over Remicade Contracts" - Pink Sheet, 7 Jun, 2018.)
States will continue to play a leading role in biosimilar adoption. AAM's Ryan said that going forward there will be more emphasis on educating legislatures about the cost savings if biosimilars get on the market. She noted that the estimate ranges from $54bn to $150bn because it is not known what the uptake will be.
"So many things still have to happen until we have a robust market," Ryan said. "We are growing through the natural growing pains."
[Editor's Note: The story has been updated to note that biosimilar substitution bills have now been enacted in 44 states and to clarify that some states, including Florida, do not require pharmacist communication of substitution with the prescriber].