Money to Be Made, Saved with Biosimilars?

A heated fight has developed over legislation to regulate a biotech development that hasn’t yet hit the U.S. market. On Wednesday, the state  Senate Committee on Health will take up the topic of biosimilars and the  surprisingly robust debate they’ve sparked.

“Legislation like this is a typical brand ploy,” said Brynna Clark, senior director for state affairs at the Generic Pharmaceutical Association, at a Senate Business and Professions committee hearing earlier this month. “It is being pushed by companies who stand to lose $60 billion in patent [expirations]. They don’t have a compelling interest to allow competition to the marketplace.”

That’s the opposition to the bill. Now a proponent:

“Quite frankly, I am shocked at the insensitivity that has been shown to patients during this debate,” said Eve Bukowski, vice president for state government affairs at the California Healthcare Institute, a not-for-profit research and advocacy organization. For cancer patients like Bukowski, who might need biosimilars treatment and who want their physician to be informed about a change in medication, she said, “Are our opponents really suggesting this is too much to ask? … Really?” 

That kind of heated rhetoric is unusual for a legislative regulation on something as arcane and difficult to understand as the new biosimilars market.

Biosimilars are basically copies — or generic versions — of biologics, which are a type of pharmaceutical treatment different from chemically synthesized drugs. Biologics are created by biologic processes. Humira, for example, is a monoclonal antibody used to treat arthritis and Crohn’s disease, and Epogen is a cancer treatment made of recombinant protein.

Biosimilars can be made after a biologic patent runs out, and that’s where the money meets the legislative road: A number of patents are about to expire for a number of biologics, and that potentially means big money for makers of biosimilars.

The proposed legislation before the Senate Committee on Health this week isSB 598 by Sen. Jerry Hill (D-San Mateo). It would allow a pharmacist to substitute a less-expensive biosimilar for a biologic, in some cases, and require that pharmacist to notify the prescribing physician of the change. It’s the notification requirement that has caused all the uproar, because pharmacists are not currently required to notify physicians when switching to generic medication. 

“This bill erects substitution barriers and implements a new pharmacy practice,” Clark said, “creating doubt about the safety and effectiveness of affordable interchangeable biosimilars.”

Biosimilars cost an estimated 20% less than biologics, and have been introduced in the European market. They are expected to come to the U.S. as soon as next year, according to Geoffrey Eich, executive director of R&D policy at Amgen, which makes several biologics.

Eich said this is not a battle between biologic and biosimilar companies. In fact, he said, Amgen will be making biosimilars, so it stands to make a profit from the use of biosimilars.

“This is not about money,” Eich said. “And this is not a problem for pharmacists [to notify physicians of changes in biologic medication]. In fact, pharmacists helped write this legislation.”

Eich said it’s unclear exactly why the notification aspect of the legislation has caused such a stir. “Why that particular provision has [hit a nerve], it is somewhat of a mystery to me,” he said. “I believe it’s important to put the right framework in place for how we’re going to handle these products.”

One point on which everyone seems to agree is that the cost of biosimilars will be lower, which means more people will be able to get this type of medication.

“There’s clearly going to be savings and increased access as a result of this,” Eich said.

He said his company will make a profit with biosimilars, “but I’m not sure this is going to be a windfall,” he said. “It takes exponentially more time and effort to develop a biosimilar. We don’t see the passage of this bill as having any economic upside for Amgen or any other biologic or biosimilar company. We just think this is the right thing for consumers.”

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