The Biosimilar Challenge

With legislation imminent for FDA approval of biosimilars, the industry must prepare for major change. One of the most contentious issues is intellectual property protection for new biotech products, addressed below by Senior Advisor Genia Long.

Working with Professor Henry Grabowski, Ms. Long and Analysis Group have analyzed the impact of different data exclusivity periods on investment decisions. We have also helped model the impact of biosimilar entry on the industry.

Here, Ms. Long shares her thoughts on key issues in the biosimilar challenge.

Q: Why has proposed legislation regulating biosimilars attracted intense interest and controversy?

Ms. Long: Biosimilar legislation will have the most far-reaching impact on the pharmaceutical industry since Hatch-Waxman created the modern generics industry in 1984. The most important impact will be on the development of future products. Congress faces the challenge of balancing short-term savings from additional price competition with adequate long-term incentives for continued innovation. Given the far-reaching and sometimes unintended consequences associated with the Hatch-Waxman generics framework, creating an appropriate pathway for biosimilars, which involves more complex scientific uncertainties, has been understandably controversial.

Q: What are the key elements in the proposed legislation?

Ms. Long: In addition to a framework for the process and standards that the FDA would apply in reviewing biosimilars, one of the most critical areas of debate is the data protection period – how long biosimilar manufacturers must wait to enter the market by relying on the innovator’s data with an abbreviated application. Data protection is a more complex issue for biologics than for small molecules. First, unlike generics, biosimilar applications will establish similarity to, rather than identity with, the innovator’s brand product. But how will similarity be defined and tested – what standards will the FDA set? Second, for small molecule drugs, patent protection is centered largely around the drug composition; biologics may have more patents relating to process, which may be extensive, more complex, and difficult to defend. It is therefore possible that a biosimilar may be similar enough to win FDA approval through an abbreviated pathway, yet different enough to evade patent infringement. It may even be possible for a biosimilar to win approval and be launched prior to expiration of innovator patents.

Q: What should manufacturers and other stakeholders do to prepare for coming changes?

Ms. Long: A US biosimilar pathway has the potential to redraw the worldwide biotech market. Manufacturers with on-market biologic products need to understand the potential impacts on their current portfolio and next-generation pipelines, given short- and long-term behavior by payers, physicians, patients, regulators, partners, and competitors. This may include reexamining and modifying R&D, investment, partnering, pricing, and market access strategies. Early- and later-stage development companies need to prepare for intensified competition, even as the bar is raised for more extensive safety and relative effectiveness evidence. Payers should develop policies and strategies that balance concerns for safety, market access, and cost, and prepare to engage with manufacturers on innovative access and pricing arrangements. All companies need to prepare for more complex investment choices and a shifting partnership landscape. ■