This article first appeared in The Recorder
In the pharmaceutical industry, intense competition has been going on for years between "branded" drug manufacturers and "generic" competitors for the same drugs. This competition has taken place under the carefully balanced rules laid out in the Hatch-Waxman Act, with the biotechnology industry thus far immune to it. Thanks to the Biologics Price Competition and Innovation Act of 2009 and the long-awaited proposed "biosimilar" guidelines, issued by the U.S. Food and Drug Administration on Feb. 9, that is about to change.
Medicinal drugs largely fall into two categories — small, chemically-synthesized molecules and large, biological products produced by living organisms. In both instances, the company that develops the new drug (or a new therapeutic use for an existing drug), patents it, and establishes to the satisfaction of the FDA that the drug is safe and effective can reap huge profits during the term of its patent. For example, the cost of using Avastin — a popular biological cancer medication developed and sold by Genentech Inc. — can reach $100,000 per patient per year. There is little doubt that if a generic version of Avastin were available, it would cost significantly less and still generate substantial profits for its generic manufacturer.
For small molecule drugs, such as Lipitor, if a generic competitor can get around the branded company's patent, either by successfully challenging it (e.g., proving it is invalid or not infringed), or by waiting until the patent expires, the path to competition is relatively short and simple. Because the branded company has already established the safety and efficacy of the pharmaceutical to the FDA's satisfaction, the generic company need only demonstrate to the FDA that it is synthesizing the same small molecule drug (or at least the same active ingredient) and using safe manufacturing processes.
The path to generic competition in the biotechnology industry is not so simple and has been largely nonexistent in the United States. That has started to change with the implementation of the BPCIA in 2009 to create an approval pathway for generic biological products shown to be "biosimilar" or "interchangeable" with an already FDA-approved, branded biological product. Biosimilar or "biosimilarity" means that "the biological product is highly similar to the reference product notwithstanding minor differences in clinically inactive components" and "there are no clinically meaningful differences between the biological product and the reference product in terms of the safety, purity and potency of the product." A biosimilar product is not the same as the branded product, but rather highly similar to it. In comparison, the term interchangeable is reserved for biological products that may be substituted for the branded product without the intervention of the health care provider who prescribed the branded product. A proposed biological product that has been demonstrated to be biosimilar or interchangeable with a branded product can rely on existing safety, purity and potency data of the branded product to support its FDA approval. This reliance could save a generic applicant potentially many millions of dollars.
Because biological products are large, complex molecules and are produced by living organisms, it is not easy to show that a generic reproduction of them is biosimilar to or interchangeable with the original, branded biological product. In fact, until the issuance of the FDA draft guidelines on Feb. 9, the FDA had not offered guidance on what it required for a showing of biosimilarity. Though the FDA has now provided guidance for a showing of biosimilarity, regrettably, it reserved for a later time its guidance for a showing of interchangeability.
In its draft guidelines, the FDA laid out: (1) its recommendation that proposed generic competitors use a stepwise approach in their development of biosimilar products; (2) its intention to use a risk-based, totality-of-the-evidence approach to evaluate all data and information provided by a generic competitor to demonstrate biosimilarity; (3) that the type and amount of analyses and testing required to demonstrate biosimilarity will be determined on a product-specific basis; and (4) general scientific principles in conducting comparative analyses.
The stepwise approach to demonstrating biosimilarity starts with extensive structural and functional characterization of both the proposed generic and branded biological products. It may include consideration of animal toxicity, human pharmacokinetics, human pharmacodynamics, clinical immunogenicity and clinical safety and effectiveness. The FDA recommended that generic competitors initially meet with the FDA to present their product development plans, and at each stage, "evaluate the extent to which there is residual uncertainty about the biosimilarity and identify and design studies to address those uncertainties."
The data evaluation in one step may provide further guidance concerning the type and amount of data required in the next step. The BPCIA gives the FDA discretion to determine that one or more elements (such as certain analytical studies, animal testing, an immunogenicity study or a clinical trial) may not be required in a particular application. Thus, the FDA encourages generic competitors to approach it and discuss their product development plan and data to determine what additional information must be provided to satisfy the FDA's determination of biosimilarity. If robust structural and functional comparisons demonstrate little, if any, difference between the proposed generic product and the branded product, the FDA sees scientific justification for a "selective and targeted approach" in animal and clinical testing
In what could save time and money for the generic competitor, the FDA proposed that, under certain circumstances, instead of comparing the proposed generic biological product to the FDA-approved branded product, a generic company may seek to use animal testing and clinical study data that compare its product with a non-U.S.-licensed biological product, as long as the generic company can "establish an acceptable bridge to the U.S.-licensed reference product." Such reliance on data should specifically benefit generic competitors that already have approved biosimilar products in other markets (e.g., Europe), where a similar approval process was implemented years earlier.
As noted, the FDA proposed to use a risk-based, totality-of-the-evidence approach to evaluate all data and information submitted by a generic competitor, rather than applying a rigid "one-size-fits-all" approach or issuing separate guidance for each distinct product class of biological products. With regard to that approach, the FDA confirmed that a generic competitor may be able to demonstrate biosimilarity even though formulation or minor structural differences (e.g., post-translational modifications, different excipients) exist between the generic and branded products, as long as the generic competitor provides sufficient evidence demonstrating that the differences are not clinically meaningful and the proposed product otherwise meets the statutory criteria for biosimilarity.
The FDA also confirmed that a proposed biosimilar product may employ a different delivery device or container closure system and that an applicant for a proposed biosimilar product may obtain license for (1) fewer than all routes of administration for which an injectable branded product is licensed; (2) fewer than all presentations (e.g., strengths or delivery device or closure systems) for which a branded product is licensed; and (3) fewer than all conditions of use for which the branded product is licensed. Further, an applicant can extrapolate clinical data to support a demonstration of biosimilarity in one condition of use to support license of the proposed biosimilar product in one or more additional conditions of use for which the branded product is licensed.
Because the biosimilar guidelines are not binding, the FDA advised that a generic competitor can use an alternative approach, as long as this approach satisfies the applicable statutes and regulations requirements. A generic competitor may now, prior to implementation of the final FDA biosimilar guidelines, begin its application process for a proposed biological product. To date, no generic competitor has actually filed a biosimilar application with the FDA. Nonetheless, now that the FDA has issued its proposed guidelines, the door is open for generic companies to enter the lucrative multibillion-dollar biosimilar market.
In addition to working with the FDA on technical biosimilar issues, a generic competitor should also be aware that upon submission of its biosimilar application to the FDA, a series of time-sensitive, pre-suit provisions of the BPCIA involving statements and opinions concerning the branded company's patents are triggered. A generic competitor may wish to work with patent counsel to address these pre-suit provisions before submitting its biosimilar application to the FDA. Further, a well-prepared generic competitor would monitor the branded company's patent activities in addition to strengthening its own IP position with respect to its biosimilar activities. Likewise, a branded company should evaluate its respective patents for validity, enforcement, infringement and possible patent term extension. It can address those weaknesses by considering reissue and re-examination applications.
A new day is dawning for the biotechnology industry. Those companies that act quickly and astutely are likely to be richly rewarded.
Siegfried J.W. Ruppert, Ph.D. is special counsel at Duane Morris and is a registered patent attorney practicing in the area of intellectual property law, focusing on patent prosecution, patent interference, patent litigation and opinion work in life sciences and biotechnology.
Guy W. Chambers is a partner at Duane Morris and practices in the areas of intellectual property, especially patent law.
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