Last year proved an eventful year for the healthcare industry. Prescription drug pricing made national headlines when Turing Pharmaceuticals raised the price of Daraprim, an anti-parasite drug primarily used in immune suppressed patients, from $13.50 a pill to $750, inciting public outrage.
The Trans-Pacific Partnership (TPP), signed in October after seven years of negotiations, mandated a confusing “at least” five- plus three-year exclusivity period for biologics, altering the rules of engagement for market formation in countries previously without such exclusivity, and rolling back the 2007 “May 10” agreement used to mitigate the detrimental effects of U.S. trade agreements on access to medicines in developing countries.
Within this context, arguably one of the most significant developments was the U.S. Food and Drug Administration’s (FDA’s) approval of the first biosimilar in the U.S., Sandoz’s Zarxio – and, more recently, the Arthritis Advisory Committee recommending approval of Celltrion’s CPT-13, creating a profound change within the healthcare industry, affecting manufacturers, providers, payers and patients.
The balance between drug pricing, innovation, and patient access is one of the healthcare industry’s biggest challenges. The Drug Price Competition and Patent Term Restoration Act, informally known as the Hatch-Waxman Act, established the generics industry, an instrumental step in generating cost savings and increasing access for chemically synthesized drugs. Indeed, close to 90 percent of dispensed drugs today are generics, accounting for only 28 percent of drug spending.
In the same vein, Congress passed the Biologics Price Competition Innovation Act (BPCIA) in 2010 to create an abbreviated regulatory approval pathway for biosimilars – biologics demonstrating no clinically meaningful differences compared to a reference product.
FDA approval of Zarxio in March of last year is a momentous step forward in this regard, but it is just that – a single step. Indeed, this singular U.S. approval in 2015 – though significant – is dwarfed by the progress of other geographies such as Europe, which has already more than 20 approvals for biosimilars and is reaping the benefits of significantly improved patient access and healthcare savings afforded by such prescience.
The FDA reports that there are currently close to 60 development programs for 16 reference products at the agency, with a significant backlog of development stage meetings to advance these programs with regulatory advice.
Why the backlog? Certainly, the FDA has noted the number of qualified reviewers within its ranks is insufficient to meet the unanticipated demands previously forecasted. Moreover, critical guidances are absent, necessitating each FDA review team to move incrementally at best when working with biosimilar developers.
Most pressingly, interchangeability guidance is a key facet eagerly awaited by the biosimilar industry, given the emerging state regulations around this concept. An interchangeable biosimilar may be substituted for its reference product, a crucial element for patient access as it would create a greater number of effective and affordable options and support provider adoption of biosimilars the same way substitution of small molecule generics has created provider optionality and patient access.
Interchangeability realizes the full potential of biosimilars by bolstering competition, lowering prices, and increasing availability for patients. Each day of delay of the issuance of guidance around achievable activities to create interchangeable biosimilars increases the time until these important therapeutic options can be made available to patients, with corresponding cost savings.
Given the spend for biologics was estimated at $160 billion in 2013, it will not be a moment too soon.
As prescription drug costs continue to climb, the list of viable and affordable treatments pushes the issue of patient access to a tipping point. Fewer available alternatives means less competition, and less competition results in price increases for all treatments, including generics. Co-pays for specialty drugs – the category into which most biologics fall – can be so expensive as to lead to suboptimal care for patients, who may need to choose between teetering on bankruptcy, or non-compliance. Suboptimal care results in subsequently higher costs of care, due to sicker patients. Thus, regulatory backlog directly affects consumers’ pocketbooks and outcomes, by limiting their ability to afford and receive necessary therapies.
The FDA’s agenda for 2016 looks to add new guidance documents for biosimilars and renegotiate five-year user fee agreements, with the Biosimilar User Fee Act (BsUFA II) on the docket. While it is important the FDA implement processes and regulations allowing for a more transparent and timely biosimilar approval process, simply addressing the backlog is insufficient.
The FDA must also create, with industry, stakeholder education efforts around biosimilars to facilitate uptake, very much as it did with the generics industry. FDA has noted that the pathway to licensure does not affect the determination of safety and efficacy of a product; as FDA-approved alternatives with no clinically meaningful difference from their biologic counterparts, biosimilars offer the opportunity to provide patients with the innovative biologic therapies they need, at a more affordable cost.
Patients, providers and payers need to be educated on these points in order to facilitate competition in the marketplace, thus creating access with optionality and healthcare system cost savings.
As drug prices continue to rise and more and more patients are priced out of their treatments, the issue of drug pricing and patient access will continue to dominate healthcare industry headlines. More competition in our drug market is necessary to reduce costs, increase access, and encourage additional innovation. By finalizing guidances in areas such as biosimilar interchangeability, and by facilitating education, clarity and timeliness in biosimilar review and approval, the FDA has the opportunity to significantly impact our nation’s healthcare market competition in biologics, resulting in the availability of affordable treatments crucial for many patients. We in industry encourage FDA to move expeditiously in this effort, and stand ready to partner with the agency to provide increased access to patients for these important therapeutic alternatives.