Patent expirations for biologics: will there be cost-savings?

[chantell.reagan]

When it comes to utilization, drug spending for biologic agents exceeded $40B in 2007, and is increasing at 17% a year. Up to 300 biologic agents have already been approved, with another 400 in the drug pipeline. Health plans are continually searching for ways to reduce costs. We’ve heard a lot about the possibility of generic entry in this area. Biogenerics, biosimilars, biocomparables, follow-on biologics (FOBs), follow-on proteins and biologics, off-patent or multisource biopharmaceuticals …whatever you call them, there is controversy and confusion when it comes to establishing generic equivalents for these products. As many plans can relate, even the core definition of a biotech drug remains largely undefined. In fact, the Biotechnology Information Institute is proposing a registry of biopharmaceutical products as the "US Biopharmacopeia," which could ultimately be the authoritative public resource for biopharmaceutical terminology, nomenclature and product identification.

Interestingly many commonly-used biologics will go off-patent in the next 7 years (see below):

2008/2009: BeneFIX, Betaseron, Human Growth Hormone, Humulin, Novolin, Infergen, Intron A, Neupogen, Regrenex
2010: NovoSeven
2011: Kogenate, Neumega
2012: Remicade
2013: Avonex, Cerezyme, Humalog, Novolog, Rebif, Rituxan
2014: Aranesp, Enbrel, Epogen, Erbitux, Procrit
2015: Avastin, Lantus, Neulasta, Sandostatin LAR, Synagis, Tysabri

Does this mean anything for managed care pharmacy? It might…but the potential cost-savings aren’t certain:

• Because these products are biologic, the standards for demonstrating bioequivalence are very different from traditional small molecule drugs. Even minor deviations in the manufacturing process may result in lack of bioequivalency.

• For generics biosimilars, there is no regulatory pathway to market, as there is with small molecules (the abbreviated NDA, as under the Hatch Waxman Act). Note that biogeneric-like agents like Omnitrope, Vitrase, and GlucaGen were approved under the 505(b)(2) Hatch Waxman Act as brands and with no formal recognition of equivalence and/or substitutability.

• Even if there was a regulatory process, since standards will be different, the manufacturing/approval process for bringing biosimilar products to market will require a lot of resources.

• By the time patents expire for certain biologics products their market share may be eroded by newer agents.

Bottom line, managed care pharmacy can’t expect same savings as with traditional generics. But even the potential savings may be worthwhile to wait for. For now, we can follow legislative developments. Until then, it’s business as usual.

Sources:

Medco Drug Trend Report 2008

BIO Press release 12/08

News article 12/08

What’s a Biogeneric?...(Part 1). Bioprocess International. 3/07

What’s a Biogeneric?...(Part 2). Bioprocess International. 5/07

US Biopharmacopeia

Congress of the United States/Congressional Budget Office: Budget Options Volume 1: Healthcare (see PDF p. 140-142): 12/08

CRS Report for Congress: FDA Regulations of Follow-On Biologics: 6/07

The potential American market for generic biological treatments and associated cost savings: 2/08

FDA LawBlog: Rep. Eshoo proposes draft biogenerics bill: 3/08

News article 1/09

[Nochmar]

Looking from this from a purely economic point of view, the biggest reductions in the cost of generics (e.g. simvastatin and zolpidem) have come from the fact that there are so many manufacturers marketing products.

The inherent difficulty in the manufacturing of most biotech drugs will prevent many companies from even considering this. I doubt many companies who produce these products even have the necessary infrastucture to do this. The handful that may will not provide enough competition to drive the prices down.

What would be the advantage to the patient to use a new generic for this? Will there be a lower copay? Many payors have added a 4th Tier for these druugs, will there now be Tier 3.5 to cover the generic biotech meds? Without a savings and an assurance of equal quality, I suspect many payors won't mandate coverage of these.

[diana.papshev]

Another interesting issue with biogenerics is that there is a group of drugs that technically fall between the world of small molecule pharmaceuticals (with an established ANDA process for generic approvals) and that of biologic agents (without a mechanism for generic approvals).

Although insulins, growth hormones, and heparins are made using living cells, the FDA approved these branded agents through the same traditional process as small molecule drugs because structurally these agents are polysaccharide chains that don’t contain proteins (proteins are associated with a greater risk of immunogenicity and folding issues). And technically, that structural distinction creates a quirk for allowing the generic approval process as long as the generic company can demonstrate bioequivalence.

Case in point – Lovenox:

Three generic companies have submitted ANDAs with a paragraph IV certification (Amphastar, Momenta/Sandoz and Teva). The ‘618 and ‘743 patents, which are expiring on 2/14/2012, were challenged in courts and were ruled to be unenforceable (with last court ruling made in 5/2008).

Aside from the patent issue, Aventis filed a citizens petition in 2/2003 urging the FDA not to approve generic versions of Lovenox until enoxaparin is fully characterized or until the generic companies conduct full clinical trials to establish safety and efficacy. The FDA has not yet ruled on Aventis' petition.

Finally, of the 3 generic manufacturers, it appears that Momenta (in partnership with Sandoz) is the closest in being able to demonstrate bioequivalence; additional data has been submitted to the FDA in 2008 and human clinical trials were not requested.

UPDATE: In 4/2009, the Supreme Court denied Aventis’ appeal, affirming the patents unenforcability. Momenta stated that FDA approval for the generic could come later in 2009.

Sources:

News article 4/09

News article 3/09

News article 10/07

FDA’s list of paragraph IV patent certifications

FDA’s Orange Book

Orange Book Blog 5/08

Orange Book Blog 4/09

Momenta press release 4/08

Aventis citizen petition 2/2003

News article 2/09

[chantell.reagan]

Momenta and Novartis are still expecting an FDA approval for their generic enoxaparin product sometime in 1Q2010 and are prepared to launch immediately thereafter (source: Reuters news 1/10)

With regards to a separate drug, Teva's BLA for filigrastim (Neupogen biosimilar) (XM02) has been accepted by FDA as of 2/10. (To view the link to DrugPipelineForecast, you must be a registered user of DrugManagementForum and sign in here).

[chantell.reagan]

FDA responded to the Citizen Petition, stating that "current scientific evidence, precedent, and FDA's legal authority establish a sound basis for the approval". Subsequently Momenta's m-enoxaparin generic for Lovenox was approved on July 23, 2010, with product expected to be shipped immediately (sources: Momenta press release 7/10 and Sandoz press release 7/10; News article 7/10).

[chantell.reagan]

FDA reports that other manufacturers are likely to gain approval for their generic enoxaparin products, with Teva by end of the year. Watson and Hospira also have generics in the works.