United States: Virginia Enacts The First State Law Regulating Interchangeable Biosimilar Products

The newly enacted Virginia law permits pharmacists to dispense a biosimilar in place of a prescribed biological product only if that biosimilar meets the higher safety standards for "interchangeability" under the federal Biologics Price Competition and Innovation Act of 2009.

On March 16, 2013, Virginia became the first state to enact legislation regulating a pharmacist's substitution of an interchangeable biologic drug for a prescribed reference biologic drug. Newly enacted section 54.1-3408.04 of the Code of Virginia raises additional hurdles for biosimilar and interchangeable biologic drug manufacturers by imposing recordkeeping and prescriber and patient notification requirements on a pharmacist dispensing an interchangeable biosimilar in the place of a prescribed biological product. In contrast, pharmacists are not subject to those burdens when substituting a therapeutically equivalent small-molecule generic drug for a prescribed branded drug.

The notification provisions in § 54.1-3408.04 require that after dispensing an interchangeable product, "a pharmacist or his designee" must provide "electronic, written, or telephonic notification of the substitution to the prescriber or his staff within five business days or as set forth in a collaborative agreement" between the pharmacist and prescribersup>1 In addition, "the pharmacist or his designee must further provide the patient with retail cost information for both the prescribed biological product and the interchangeable biosimilar"2 However, the notification provisions expire under the provisions of the statute in July 2015. Other provisions of the Virginia law that authorize physicians to prevent substitution by specifying "brand medically necessary" and allow patients to "insist on the dispensing of the prescribed biological product" do not expire.

Virginia's enactment of the interchangeable substitution law marks the first success by the Alliance for Safe Biologic Medicines (the Alliance), which has been urging state legislatures to adopt legislation regulating substitution of interchangeable biosimilar drugs as part of its mission to "protect patient safety and ensure the accessibility of these products." 3 The Alliance, whose members include leading biologic drug manufacturers and other proponents, such as the Biotechnology Industry Organization (BIO), advocate that such measures are needed to protect patient safety because the "interchangeable" versions of complex biological drugs are not identical to the original biologic products. On March 21, 2013, BIO commended Virginia Governor Bob McDonnell for signing the Virginia legislation into law. At least 15 other states are reported to be considering similar legislation that would restrict the ability of pharmacists to substitute generic versions of biological drugs for brand name products, including Arizona, Arkansas, California, Colorado, Florida, Illinois, Indiana, Maryland, Massachusetts, Mississippi, North Dakota, Oregon, Pennsylvania, Texas and Washington.

Biosimilar drug companies and insurers, however, view the proposed state legislation as a preemptive strike to deter the use of biosimilars before any have been approved, and they have undertaken countermeasures to oppose or advocate amendment of the state bills. Earlier this year, a similar bill in Mississippi died in committee—the first rejection of such a bill. Ralph Neas, CEO of the Generic Pharmaceutical Association (GPhA), applauded Mississippi's rejection of the proposed legislation, observing that the "Mississippi state legislators know that creating barriers between patients and newer, low-cost versions of these therapies is not right for their state." 4 At the GPhA Annual Meeting in February 2013, FDA Commissioner Margaret Hamburg also defended the substitution of interchangeable biosimilars, noting that, "Substitutability helped spur the growth of the generic[s] industry and is similarly essential to help foster competition in the biological drug market." 5 She further noted, "Ultimately, such competition will spur innovation, improve consumer choice, and drive down medical costs." 6

The newly enacted Virginia law permits pharmacists to dispense a biosimilar in place of a prescribed biological product only if that biosimilar meets the higher safety standards for "interchangeability" under the federal Biologics Price Competition and Innovation Act of 2009 (BPCIA), part of the Patient Protection and Affordable Care Act. However, FDA has yet to publish the specific criteria and approach that FDA will use to determine if a follow-on biological drug meets the BPCIA's requirements for interchangeability. The BPCIA created an abbreviated pathway for FDA's approval of follow-on biosimilar and interchangeable biological products, setting safety standards for interchangeable biological products. 7 The BPCIA itself provides that if a follow-on biological product meets the requirements for interchangeability, the interchangeable product "may be substituted for the reference product without the intervention of the health care provider who prescribed the reference product." 8 Although FDA published draft guidance documents on February 9, 2012, for "biosimilar" products, those guidance documents only minimally addressed "interchangeable" products, and informed the industry that, "FDA is continuing to consider the type of information sufficient to enable FDA to determine that a biological product is interchangeable with the reference product." FDA has yet to issue its final "biosimilar" guidances; moreover, FDA's January 31, 2013, list of draft guidances it expects to issue in the coming year did not mention a draft guidance on "interchangeable" biosimilar products.

In the absence of any interchangeable product approval, or any further guidance from FDA on its requirements for interchangeability determinations, biosimilar manufacturers and their proponents view the proposed state legislation as an attempt to undermine the fledgling interchangeable biosimilar industry before it can gain consumer acceptance. Neas has criticized the pending legislation in other states, maintaining that "[t]he push for these new measures has nothing to do with safety and everything to do" with "biotech Goliaths, trying to thwart competition." 9

Following Virginia's enactment of § 54.1-3408.04, it is likely to be of interest to proponents of both the biologic product industry and biosimilar manufacturers whether other states will enact similar legislation, or whether they will follow Mississippi's lead and reject legislation regulating interchangeable product substitution.


1. § 54.1-3408.04(C).

2. § 54.1-3408.04(D).

3. Alliance Mission Statement at www.safebiologics.org.

4. http://www.gphaonline.org/gpha-media/press/mississippi-state-biosimilar-legislation.

5. http://www.gabionline.net/Biosimilars/General/US-FDA-defends-biosimilar-substitution.

6. http://www.gabionline.net/Biosimilars/General/US-FDA-defends-biosimilar-substitution.

7. 42 U.S.C. § 262 (k)(4).

8. 42 U.S.C. § 262 (i).

9. http://www.gphaonline.org/gpha-media/press/mississippi-state-biosimilar-legislation.

This article is for general information and does not include full legal analysis of the matters presented. It should not be construed or relied upon as legal advice or legal opinion on any specific facts or circumstances. The description of the results of any specific case or transaction contained herein does not mean or suggest that similar results can or could be obtained in any other matter. Each legal matter should be considered to be unique and subject to varying results. The invitation to contact the authors or attorneys in our firm is not a solicitation to provide professional services and should not be construed as a statement as to any availability to perform legal services in any jurisdiction in which such attorney is not permitted to practice.

Duane Morris LLP, a full-service law firm with more than 700 attorneys in 24 offices in the United States and internationally, offers innovative solutions to the legal and business challenges presented by today's evolving global markets. Duane Morris LLP, a full-service law firm with more than 700 attorneys in 24 offices in the United States and internationally, offers innovative solutions to the legal and business challenges presented by today's evolving global markets. The Duane Morris Institute provides training workshops for HR professionals, in-house counsel, benefits administrators and senior managers.

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