Moving Toward a Biosimilars Pathway: The Lines are Drawn in Congress

July 1, 2009

Volume 22, Issue 7

Page Number: 40–45

The introduction of two rival bills has intensified the long-simmering debate on biosimilars regulation in the US.

March 2009 was an active month for the proposal of legislation that would create a pathway for the US Food and Drug Administration to approve generic biologic drugs, or biosimilars. Two competing bills were introduced into the US House of Representatives, and one into the US Senate, that would provide such a pathway. This biosimilars legislation has been introduced during a time when healthcare reform in the United States, particularly in the area of maximizing affordability of prescription drugs, is receiving increased attention as a primary initiative of the Obama administration.

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Rep. Henry Waxman (D–CA) introduced a bill (H.R. 1427) entitled "Promoting Innovation and Access to Life-Saving Medicine Act" in the US House of Representatives on March 11, 2009. This bill, co-sponsored by Reps. Frank Pallone, Jr. (D–NJ), Nathan Deal (R–GA), and Jo Ann Emerson (R–MO), was assigned to the House Committee on Energy and Commerce (chaired by Rep. Waxman) and to the House Committee on the Judiciary. On March 26, 2009, a companion bill (S. 726) was introduced in the US Senate by Sen. Charles E. Schumer (D–NY). This bill, containing the same title and text as H.R. 1427, was co-sponsored by Sens. Susan M. Collins (R–ME), Sherrod Brown (D–OH), David Vitter (R–LA), Debbie Stabenow (D–MI), Mel Martinez (R–FL), and Jeanne Shaheen (D–NH), and was referred to the Senate Committee on Health, Education, Labor, and Pensions, which is chaired by Sen. Edward M. Kennedy (D–MA). According to the bills' text, these companion House and Senate bills are intended "to provide for the licensing of biosimilar and biogeneric biological products . . ."

A second bill having a similar expressed purpose—"to establish a pathway for the licensure of biosimilar biological products"—was introduced into the House by Rep. Anna G. Eshoo (D–CA) on March 17, 2009. This bill (H.R. 1548), is entitled the "Pathway for Biosimilars Act" and was co-sponsored by 44 of Rep. Eshoo's fellow members of the House, with Reps. Jay Inslee (D–WA) and Joe Barton (R–TX) being primary co-sponsors. H.R. 1548 also has been referred to the House Committee on Energy and Commerce and to the House Committee on the Judiciary.

By their titles and their expressed purposes, H.R. 1427 ("the Waxman bill") and H.R. 1548 ("the Eshoo bill") appear to have a common goal—to provide a mechanism for the review and licensing by the FDA of generic biotherapeutic products (also sometimes referred to as "biogenerics" or "follow-on biologics," but referred to as "biosimilars"). Because S. 726 is a companion bill to, and contains the same text as, H.R. 1427, this article will focus on the differences between the two House bills. It seems likely that because both bills have been introduced into the House Energy and Commerce Committee and Judiciary Committee, the real negotiations for a final bill will take place within those House committees and the final Senate bill would conform to the bill emerging from the House.

By their provisions, however, these two competing House bills set out to achieve a common goal in very different ways, setting up drastically different regulatory schemes for the approval of biosimilars. The introduction of these rival bills has intensified the long-simmering debate between various groups having an interest in biosimilars regulation. This includes high-profile individuals from the generics pharmaceutical industry and the biotechnology industry, and even certain members of Congress, who have spoken out in recent weeks on the merits and demerits of these two bills. Of interest to both sides in the debate is the fact that this discussion is taking place at a time when the biopharmaceutical industry is not only beginning to deliver its long-promised benefits in the treatment and prevention of certain diseases, but also when the industry is increasingly being viewed as the "savior of the pipeline" for many traditional pharmaceutical companies.

This article will examine some of the primary differences between these competing bills, focusing on the provisions that have received the most attention in the trade and popular press. The article will also compare the provisions of these bills to the regulatory scheme currently in place for traditional or small-molecule pharmaceuticals, better-known as the Hatch-Waxman Act, which has provided a mechanism for the review and licensing of generic pharmaceutical products for the last 25 years.1 Finally, the article will note some of the public comments made by individuals on both sides of the debate.

This article does not intend to advocate for one proposed regulatory scenario over another, but instead attempts to provide an overview of the key provisions of these bills so that the key constituencies involved in the biopharma* industry can remain informed as the legislative process evolves.

THE KEY PROVISIONS: A COMPARISON

The Waxman and Eshoo bills are a study in contrasts, differing in many key provisions that are important to the constituencies interested in coming up with an appropriate and effective regulatory scheme for biosimilars. Several of these key differences between these bills, and a comparison of their provisions to those in the Hatch-Waxman Act under which generic small-molecule therapeutics are regulated, are highlighted in Table 1.

Table 1. A comparison of key provisions of the biosimilars bills and the Hatch-Waxman Act

Market Exclusivity

The provision that is receiving the most attention is the exclusivity period that each bill would provide. This provision mandates the length of time after initial introduction of a new biologic product, a new formulation containing the biologic product, or a new indication for the biologic product, during which the FDA could not approve a biosimilar drug for marketing in the US if it contained the same biologic, was contained in the same or a similar formulation, or was indicated for the same medical or therapeutic use. As shown in Table 1, the Hatch-Waxman Act has similar provisions prohibiting approval of generic pharmaceuticals by the FDA during the first five years after approval of a new small-molecule drug (commonly referred to as a new chemical entity), and during the first three years after approval of either a new formulation containing a previously approved and marketed small-molecule drug or a new medical or therapeutic use for a previously approved and marketed small-molecule drug. The Act also provides for a six-month additional period of market exclusivity if the approval-holder undertakes pediatric studies to determine the safety and efficacy of the approved drug in pediatric populations. Under the Hatch-Waxman rubric, these periods of market exclusivity were intended to provide brand-name pharmaceutical companies with incentives to research and develop new pharmaceutical products and methods for using such products, providing them with a head-start in the marketplace before any competitor could enter the market with a generic version of the approved drug for the approved indication.

The Waxman biosimilars bill largely tracks the exclusivity periods seen in the Hatch-Waxman Act, providing the same five-year and three-year exclusivity periods seen in the small-molecule regime and the same six-month pediatric extension. In contrast, the Eshoo bill goes far beyond the Waxman bill, providing for 12 years of market exclusivity for a new biologic product, and up to 14 years for a previously approved biologic product if, during the first eight years after its approval, the biologic is approved for a new indication (although that term of exclusivity is measured from the date on which the biologic was first approved for any indication). Thus, under the Waxman bill, a new biologic product could receive a maximum of 5.5 years of market exclusivity before a biosimilar could be approved, whereas the Eshoo bill would provide for up to 14.5 years of market exclusivity for a new biologic product.

Comparative Effectiveness

Another key difference between the bills is the requirement for new clinical trials on the part of the biosimilar applicant. Under the Eshoo bill, biosimilar applicants would have to conduct clinical trials comparing the immunogenicity of the biosimilar product to that of the reference (previously approved) biologic product, and those data would have to be included in the biosimilar application submitted to the FDA. The FDA would be permitted to waive the requirement for such trials, but only after it published regulatory guidance regarding the conditions under which such a waiver would be provided. In contrast, the Waxman bill would not require new clinical trials for a biosimilar drug, and would permit the biosimilar applicant to rely on the safety and efficacy data provided to the FDA by the reference drug manufacturer in its application for first approval of the reference biologic, provided that the biosimilar application contains information demonstrating that: (a) the biosimilar product and the reference biologic product have highly similar molecular structural features; (b) no clinically meaningful differences would be expected between the biosimilar and the reference product in terms of safety, purity, and potency; (c) the biosimilar and the reference biologic product have the same mechanism or mechanisms of action; and (d) the biosimilar and the reference biologic product are used and administered in the same way, and the dosage form and strength of the biosimilar are the same as those of the reference product. This scenario is similar to that used for the review and licensing of small-molecule generic therapeutic pharmaceutical products under the Hatch-Waxman Act, which permits the generic applicant to rely on safety and efficacy data provided to the FDA by the brand name applicant in support of a new drug application.

Other Differences

There are several additional differences between the Waxman and Eshoo bills. For example, the Waxman bill would permit complete interchangeability of an approved biosimilar drug for the reference drug once the former has been approved by the FDA. This would allow substitution at the pharmacy level of the biosimilar as being equivalent to the branded drug unless a physician writes a prescription that contains a "no substitution" order, the same scenario as exists for small-molecule pharmaceuticals under Hatch-Waxman. In contrast, the Eshoo bill would not permit such outright interchangeability, and would only permit such substitution in a certain limited set of situations and only after the FDA has issued guidelines relating to the circumstances under which complete interchangeability of a biosimilar for a reference drug would be permitted. In addition, although the Waxman bill would permit the FDA to use the same official name for a biosimilar as for the reference biologic, the Eshoo bill would require the two biologic products to have different names. The bills also differ with respect to the "first-to-file exclusivity" accorded to the first applicant to receive approval for a biosimilar drug (i.e., the period during which the FDA cannot approve a second biosimilar application for the same biologic). The Waxman bill provides one year of first-to-file exclusivity and the Eshoo bill provides two years (although both are longer than the 180-day first-to-file exclusivity that is provided under Hatch-Waxman for small-molecule generic pharmaceuticals).

Patent Challenges

Finally, there is a significant difference in the mechanisms by which the two bills permit challenges to patents that may protect biologics or their methods of use or manufacture. Moreover, both these bills differ dramatically from the patent challenge mechanism provided for small-molecule pharmaceuticals under Hatch-Waxman. Neither of the biosimilar bills recently introduced into the House uses the "Orange Book" system that is familiar to those who work in the small-molecule generic pharmaceuticals environment under Hatch-Waxman. In that system, a pharmaceutical approval holder can submit a listing of patents to the FDA that the approval holder believes in good faith provide patent protection for the approved active pharmaceutical ingredient (API), an approved formulation containing the approved API, or an approved method of use (i.e., indication) of the approved API and/or approved formulation. Those patents would then be listed in the FDA's Approved Drug Products with Therapeutic Equivalence Evaluations, commonly called The Orange Book. When a generic manufacturer submits an application for FDA approval of a generic version of the approved drug, formulation, or indication, the generic applicant must then certify to the FDA that: (1) there are no patents that encompass the generic drug to be approved; (2) any patents listed in The Orange Book that purport to cover the generic drug have already expired; (3) any patents listed in The Orange Book that purport to cover the generic drug would expire before the first date on which the generic applicant would market the generic version of the drug; or (4) that the patents listed in The Orange Book that purport to cover the drug compound, formulation or use either would not be infringed by the generic drug, or are invalid (a so-called "paragraph IV certification"). If its FDA application contains a paragraph IV certification, then the generic applicant must notify the approval holder and patentee of the filing of the generic application, and provide a statement of the reasoning for its patent certification; the approval holder/patentee then has 45 days to decide whether or not to sue the generic applicant for patent infringement. This process was designed to lead to more rapid adjudication of the patent exclusivity covering branded pharmaceuticals, and has been used with great success for the past 25 years.

In contrast, neither the Waxman nor the Eshoo biosimilars bill contains such an Orange Book mechanism for patent challenges. The Waxman bill permits a biosimilar applicant (or someone even just contemplating filing a biosimilar application) to request information from the approval holder on the reference biologic drug regarding any patents that the approval holder believes will cover the approved biologic, its use, or its manufacture. After receipt of such a request, the approval holder then has 60 days to provide such patent information to the requestor, and must update that patent information for two years from date of initial inquiry. Once an application for approval of the biosimilar has been submitted to the FDA, the biosimilar applicant may (but is not required to) notify the approval holder of the filing of the application. If such a notification is sent, it must include a patent notification similar to that for a paragraph IV certification under Hatch-Waxman, and the holder of the approval on the reference biologic would then have 45 days to sue the biosimilar applicant. Under the Eshoo bill, the FDA would provide a copy of a biosimilar application to the reference product approval holder, who would then be required to (a) provide the biosimilar applicant with a list of patents that purport to cover the product or its use, and (b) explain in writing to the biosimilar applicant why the reference product approval holder believes the biosimilar product would infringe one or more patents on that list. Thus, the Eshoo bill shifts the burden of patent certification from the biosimilar applicant to the reference product approval holder, a significant departure from both the Hatch-Waxman regime and that provided under the Waxman biosimilars bill.

COMMENTS BY KEY CONSTITUENCIES

The interested constituencies on both sides of the biosimilars debate have provided comments for and against each bill and the regulatory schemes envisioned by those bills.

The Innovator Industry

The biotechnology industry generally favors the Eshoo bill, particularly because of its provision of longer exclusivity periods for newly approved biologics. For example, the Biotechnology Industry Organization (BIO), one of the largest trade and advocacy organizations in the biotech industry that counts many of the key biotech corporations among its members, said in a statement that it favors the Eshoo bill, calling it "an effective, reasonable and safe pathway to biosimilars . . ." that "provides patients with the right balance between innovation and competition."2 Jim Greenwood, president and CEO of BIO, was quoted as saying that the Eshoo bill "will help reduce costs by enabling additional competition among biologics but at the same time help safeguard patient safety by requiring demonstration of the purity, safety and effectiveness of biosimilars."3 In contrast, BIO believes the Waxman bill "does not strike the necessary balance for patients or the economy," contending that the bill "seeks to cut prices but instead cuts corners."4 BIO issued a similar statement of disdain for the companion bill introduced into the US Senate by Sen. Schumer, contending that S. 726 "follows its companion bill in the House . . . through the looking glass to a world of biosimilars that would jeopardize patient safety and undermine future medical breakthroughs."5

The Pharmaceutical Research and Manufacturers of America (PhRMA), a pharmaceuticals industry trade and advocacy group whose members include the largest brand name pharmaceutical companies and their supporters, has expressed a similar view to that of BIO. PhRMA's senior vice president Ken Johnson was quoted as saying that the Eshoo bill "represents a positive step forward" at least in part because of the Eshoo bill's requirement for more extensive clinical trials than are required in the Waxman bill.3

In addition, many big companies have supported the Eshoo bill over the Waxman bill. For example, Robert Armitage, senior vice president and General Counsel of Eli Lilly & Co., was quoted as saying that the Eshoo bill "makes certain that innovator companies can continue to make these types of investments in new therapies for patients, and that, once a reasonable period of time has passed for recouping its investment, generics companies can copy those innovations in a safe, scientifically sound manner."6 Analogous statements in support of the Eshoo legislation were made by representatives from Johnson & Johnson and Amgen Corporation.3,7 The primary issue driving them to favor the Eshoo bill over the Waxman bill, according to these industry advocacy groups and biopharma companies, is the longer exclusivity period provided in the Eshoo bill. According to Armitage, biotechnology innovation "entails many years of research, massive investments and high risk," and it is only with the longer exclusivity period provided by the Eshoo bill that such investment and risk would be undertaken by the innovator companies.6 Similarly, Audrey Phillips, an executive director of public policy for Johnson & Johnson, was quoted as saying that the exclusivity provided by the Waxman bill "is far from sufficient," contending that companies need about 12 years of exclusivity to have the appropriate financial incentive to innovate new biologic products.7

The Generics Industry

In contrast, the generics pharmaceutical industry sees things quite differently. The Generic Pharmaceutical Association (GPhA) has stated its opposition to the Eshoo bill, calling it "the wrong road for patients looking for safe and affordable biogeneric medicines, particularly during these difficult economic times" and "a long route filled with needless roadblocks that will keep patients from getting needed medicines in a timely manner."8

GPhA contends that there is little justification for the longer exclusivity period provided by the Eshoo bill compared to that provided by the Waxman bill, stating that the former "will only benefit brand companies by erecting barriers including an unprecedented and unjustifiable 14 years of market exclusivity" and that "there is a minimal difference of less than eight months longer in the development of biopharmaceuticals when compared to traditional pharmaceuticals, [so] there is little justification for excessively expanding exclusivity beyond the Hatch-Waxman model."8 GPhA also issued statements in support of the Waxman bill in the House and its counterpart in the Senate, contending that because these bills are based in large part on "our healthcare system's successful experience with generic medicines for the past 25 years" under the Hatch-Waxman rubric, it would "achieve the much-needed balance between pharmaceutical competition and innovation for the benefit of consumers, payors and state and federal governments."9,10 GPhA had previously come out in support of the opening remarks of President Obama's 2010 budget proposal, which stated that the ideal system for review and licensing of biosimilars would be modeled in large part on the Hatch-Waxman Act.11,12

Teva Pharmaceuticals, one of the largest manufacturers of generic pharmaceutical products in the world, echoed the sentiments of GPhA. Debra Barrett, Teva's senior vice president of government affairs, was quoted as saying that the Eshoo bill "clearly is written to protect brand-name drugs and their innovators' government-granted monopoly at the expense of access and innovation."3

Thus, it is clear that the battle lines have been drawn between the biotechnology industry and its advocates on one side, and the generics pharmaceuticals industry and its advocates on the other. This battle is shaping up to be reminiscent of the one that took place 25 years ago during the debate over the bills that ultimately became the Hatch-Waxman Act and that set the stage for the development of the generics pharmaceutical industry itself. This time around, however, the generics industry is far more robust than it was 25 years ago, and the industry groups and Congress also have 25 years' worth of experience in the small-molecule arena to draw from as they debate the most appropriate system for regulation of biosimilars.

The FTC's Views on Biosimilars Legislation

As we went to press, the US Federal Trade Commission (FTC) issued its report on biosimilars. Entitled, Emerging Health Care Issues: Follow-on Biologic Drug Competition, the FTC report examined the effects on commercial competition that may result from the various regulatory schemes currently being considered. The report contained a number of findings and recommendations, among them finding that the longer exclusivity period proposed in the Eshoo biologics bill "is unnecessary to promote innovation by pioneer biologic drug manufacturers" (p. vi) and "imperils the efficiency benefits of a [follow-on biologics] approval process in the first place" (id. at p. vii). However, the report also recommended against adoption of a traditional Hatch-Waxman regulatory scheme as proposed in the Waxman biologics bill, contending that such a scheme would still have "anticompetitive consequences" (id. at p. x), and that "market dynamics counsel against [a follow-on biologics] exclusivity period" (id., at p. ix). This is because, in the FTC's view, market entry of a subsequent follow-on biologic after the approval of the first is "unlikely to cause a substantial price drop due to the high costs of developing and manufacturing" follow-on biologics in general (id.). Thus, the FTC report concludes, "market opportunities are likely to be sufficient to incentive [sic] development of interchangeable [follow-on biologics]" (id.), and that competition in the biologics market thus would be more akin to brand–brand competition rather than brand–generic competition in the small molecule arena. As a result, the FTC report does not favor the regulatory schemes proposed in either the Waxman or the Eshoo bills; instead, the report concludes that the most promising system would be one that would provide for an abbreviated FDA approval while relying on patent protection and market-based pricing to promote competition and spur innovation in the biologics marketplace.

CONCLUSION

Given the two different regulatory schemes provided by the Waxman and Eshoo bills, the debate over which proposal should prevail will no doubt continue to grow within the House and between the industry, trade, and consumer groups having sometimes-competing interests in the outcome of this debate. Healthcare reform is one of the top priorities of the Obama Administration, and the administration's 2010 budget proposal contained a framework for biosimilars regulation that appears to mirror the Hatch-Waxman pathway for small-molecule generic pharmaceuticals. As a result, we can likely expect heavy lobbying efforts from the generics and the biotechnology industries as Congress works toward a final bill. With the biopharma industry continuing to mature and beginning to deliver its long-promised benefits in the treatment and prevention of certain diseases, and as that industry is increasingly viewed as the "savior of the pipeline" for many traditional pharmaceutical companies, it becomes even more important that the debate is framed such that the outcome—a workable mechanism for FDA review and licensing of biosimilars—ultimately maximizes the protection of the interests of the public as well as those of both the biotechnology and generics industries.

DISCLAIMER

The views expressed herein are those of the author and should not be attributed to former, present, or future clients or any employees of Sterne, Kessler, Goldstein & Fox P.L.L.C.

Brian J. Del Buono, PhD, is a director in the Biotechnology/Chemical Group at Sterne, Kessler, Goldstein & Fox, Washington, DC, 202.371.2600, briand@skgf.com

*Throughout this article, the term biopharma is used to refer to the combination of biotechnology and pharmaceutical companies. It is recognized that companies in these two industries face certain issues that are unique to one industry or the other. However, because the author believes that there is significant overlap in the primary issues relating to regulation of biosimilars that are important to both industries, and because a number of companies straddle the line between the two, biopharma has been used throughout this article to refer to the combination of the biotechnology and pharmaceutical industries.

REFERENCES

1. The Drug Price Competition and Patent Term Restoration Act of 1984. Pub. Law 98-417; 1984. Primarily codified at 21 U.S.C. § 355 et seq. and 35 U.S.C. § 271(e).

2. Biotechnology Industry Organization. 2009;Mar 11. New bipartisan, consensus bill points to right path to biosimilars. 2009 Mar 17. Aavailable from: http://bio.org/news/pressreleases/newsitem.asp?id=2009_0317_03.

3. Mixter BD. Reps. Eshoo, Inslee, Barton introduce bill to create generic biologics pathway. Pharmaceutical Law & Industry Report. 2009;19(7);318.

4. BIO. New proposed biosimilars pathway filled with potholes. 2009 Mar 11. Available from: http://bio.org/news/pressreleases/newsitem.asp?id=2009_0311_02.

5. BIO. New Senate bill takes shortcuts on path to biosimilars. 2009 Mar 26. Available from: http://bio.org/news/pressreleases/newsitem.asp?id=2009_0326_01.

6. Henson S. Rival biologics bill introduced in House. IPLaw360; 2009 Mar 17. Available from: http://ip.law360.com/print_article/92147.

7. Favole JA. J&J Co. doesn't have plans to enter 'biosimilars' market. Dow Jones Newswires. 2009 Apr 7.

8. Generic Pharmaceutical Association. GPhA statement on introduction of H.R. 1548, "The Pathway for Biosimilars Act." 2009 Mar 17. Available from: http://www.gphaonline.org/media/press-releases/2009/gpha-statement-introduction-hr-1548-%E2%80%9C-pathway-biosimilars-act%E2%80%9D.

9. GPhA. GPhA statement on the introduction of the Bipartisan Biogenerics Consensus Bill: "Promoting Innovation and Access to Life-Saving Medicine Act." 2009 Mar 11. Available from: http://www.gphaonline.org/media/press-releases/2009/gpha-statement-introduction-bipartisan-biogenerics-consensus-bill.

10. GPhA. GPhA statement on the introduction of the Bipartisan Senate Biogenerics Consensus Bill 2009 Mar 26. Available from: http://www.gphaonline.org/media/press-releases/2009/gpha-statement-introduction-bipartisan-senate-biogenerics-consensus-bill.

11. GPhA. GPhA praises President Obama's support for safe and affordable biogenerics as critical solution to America's ailing health care system. 2009 Feb 26. Available from: http://www.gphaonline.org/media/press-releases/2009/gpha-praises-president-obama%E2%80%99s-support-safe-and-affordable-biogenerics-cri.

12. GPhA. GPhA meeting focuses on biosimilars; praises Obama's support for biosimilars. World Generic Markets. 2009;8(12):12.