Biologic drugs are miracles. At least they are to those whose lives they save. Through sheer size and three-dimensional complexity, a biologic can act on certain targets with specificity unimaginable for most small-molecule drugs. When this target is the molecular Achilles heel of a disease, a biologic directed against it can bring unparalleled therapeutic success. It can also bring unparalleled financial rewards. Witness Roche’s anti-VEGF cancer drug Avastin (bevacizumab), anti-CD20 cancer drug Rituxan (rituximab), and anti-HER2 breast cancer drug Herceptin (trastuzumab). Each earns its maker billions of dollars annually.
The biologic drug industry emerged in only a few decades. Yet, these drugs have now transformed medicine as we know it. By the early 2000s, biologics had already formed a significant, and growing, portion of the U.S. drug market.
And they did this outside the framework of the Hatch–Waxman Act. There was no abbreviated approval pathway or regulatory exclusivity like those for small-molecule drugs. Consequently, there was no relief in sight from the steep prices innovator companies were free to charge for these miracle drugs. There was no distant point in time when the expiration of a biologic’s exclusivity and patent rights would cause its price to drop, even modestly.
Things needed to change for biologics as they had for small-molecule drugs years earlier. Yet, this was easier said than done. The science, economics, and market dynamics of biologic drugs were different from those of small-molecule drugs, as they still are. There was no quick fix here, no easy way to make these drugs more affordable while also rewarding their innovation. To be sure, simply grafting the Hatch–Waxman Act onto the biologics industry would not work.
In 2010, the Biologics Price Competition and Innovation Act became the imperfect vehicle for this change. The act and the U.S. biosimilar industry it formed are the focus of this chapter. Before we explore these topics, though, it would be useful to better appreciate the scale of biologic prices, some important differences between the biologic and small-molecule realms, and the limited expectations for positive change that these differences warrant.
Biologic prices are in a league of their own. In 2015, for example, the average annual cost for a biologic exceeded $53,000. To better digest this point, let us consider that the 2015 median household income in the United States was $55,775. So, the average cost of a biologic rivaled the median income for an entire family.
There has been no shortage of biologics that well exceed this average. As far back as 2012, for example, the annual cost of Genentech’s cancer drug Perjeta (pertuzumab) was $70,000, and of its Herceptin/Perjeta combination was $115,000. The annual cost of Pfizer’s cancer drug Ibrance (palbociclib) in 2015 was nearly $120,000. The annual cost of Genzyme’s Gaucher’s disease drug Cerezyme (imiglucerase) was $300,000 in 2014. Last but not least, in 2017, Alexion’s hemoglobinuria drug Soliris (eculizumab) had an annual cost of about $500,000.
Even before 2010, the ratio of biologic prices to the median U.S. household income was remarkably high. This made calls for reform by patients and their advocates all the more urgent.
In some ways, the biologic world mirrors that of small-molecule drugs. A prime example is that biologic innovation and affordability are at odds with each other. This creates tension. Like a new small-molecule drug, a new biologic is the fruit of much time, effort, and resources. Its path to FDA approval is long, expensive, and uncertain. High drug prices compensate the biologic maker for this effort and risk and permit the cycle of innovation to continue. Meanwhile, high drug prices are an affront to patients and their advocates and thus a perennial battleground between innovator companies and patient groups. That a drug is a biologic rather than a small molecule carries scant weight for patient groups in this fight. To them, it matters not whether an expensive drug has a high molecular weight or is structurally complex. Tension between biologic innovation and affordability remains.
In other ways, the biologic and small-molecule drug worlds differ starkly. For one, they differ economically. Developing and manufacturing a biologic typically costs more and takes longer than for a small-molecule drug. How much more and how much longer are a matter of debate, of course. More dramatic still is the price gap between biologics and small-molecule drugs. Again, in 2015, the average annual cost for a biologic was over $53,000, as compared to under $6,000 for an innovator small-molecule drug—a roughly nine-fold difference. What is more, regarding complexity, a biologic is to a small-molecule drug what an aircraft carrier is to a rowboat. As such, the science of replicating a biologic is far removed from the comparatively simple task of copying a small-molecule drug.
Despite certain parallels between the biologic and small-molecule drug realms, the chasm between them compels us—as it compelled Congress—to treat non-innovator biologics as something more than just oversized generics.
The European Medicines Agency (EMA) established a biosimilar pathway in 2005. By 2006, it had approved its first biosimilar: Omnitrope (Sandoz), a biosimilar of Pfizer’s innovator somatotropin product Genotropin. By the end of 2009, seventeen EMA-approved biosimilars were on the market. This caused a significant price reduction for innovator drugs. For example, by 2015, the average epoetin (erythropoietin) price reduction in the European Union was 27 percent. Again, this was the average, and price reductions differed wildly by country. Witness epoetin’s 66 percent price drop in Portugal compared to its 10 percent drop in the United Kingdom.
By the late 2000s, it was clear that the United States needed an abbreviated biologics approval pathway and the price reductions it was expected to bring. And in light of Europe’s experience, this pathway was no longer an abstraction, nor was the resultant economic effect.
From the biologic maker’s perspective in the late 2000s, a modest price reduction of 10–30 percent would have been preferable to Hatch–Waxman-like price reductions of more than 80 percent. From the patient’s perspective, of course, the converse was true. Despite this, even a modest drop in a biologic’s price could still mean considerable annual savings for patients given the already high cost of biologics. So, for example, the annual savings from a 20 percent price drop on a $100,000 biologic far exceeds that from an 80 percent price drop on a $5,000 small-molecule drug.
Despite its relative success in Europe, the EMA’s biosimilar approval pathway could not be expected to yield the identical economic outcome in the United States. This is true for at least the reason that the American and European health care systems differ. Moreover, Europe’s pre-2010 experience with biosimilars underscored the scientific reality that replicating a biologic is harder than copying a small molecule. And it showed that the dramatic price reductions possible with generic drugs are simply not the reality for biologics.
In short, Europe’s early success gave Americans hope for what biosimilars could do. At the same time, it showed what biosimilars could not do and gave Americans good reason to manage their expectations accordingly.
The Biologics Price Competition and Innovation Act, informally known as the BPCI Act, the BPCIA, or the Biosimilars Act, is but a small part of the Affordable Care Act. As its name implies, the act was intended to strike a balance between innovator and non-innovator biologics, just as the Hatch–Waxman Act does for innovator and generic drugs.
The BPCI Act came into being despite doubts by some as to whether it would accomplish its purported goal. It was slow to gain traction. Indeed, it took five years for the act to yield its first approved product: Zarxio, Sandoz’s biosimilar version of Amgen’s innovator filgrastim product Neupogen. The EMA’s approval pathway, by contrast, yielded its first biosimilar approval only one year after implementation. The BPCI Act is also complex and, like most legislation, is no paragon of clarity. The courts have only just begun to parse its language. How they will do so remains to be seen, just as it remains to be seen if and how Congress will amend the act.
At first blush, the BPCI Act would appear to have the trappings of the Hatch–Waxman Act. It creates an abbreviated approval pathway for non-innovator biologics, grants generous exclusivity to innovators, and grants some exclusivity to certain interchangeable biologic makers. It even creates a Purple Book for biologic products, a resource reminiscent of the Orange Book for small-molecule drugs.
Closer inspection reveals a more complex reality. The BPCI Act itself, together with the unique science and economics of developing and selling biologics, make a biologic Hatch–Waxman Act impossible. So, despite its overlap with the Hatch–Waxman Act, the BPCI Act is its own animal, and it should be studied as such.
Toward that end, we next discuss the act’s key features. These include its provisions governing regulatory exclusivity, the abbreviated approval pathway, and the resolution of patent disputes. We also address tactical concerns unique to companies wishing to compete with innovator biologic makers.
The BPCI Act creates an abbreviated pathway for approving biologic products. This pathway’s first prong permits the FDA to review and approve an abbreviated BLA (aBLA) for a “biosimilar” product. The second permits the FDA to review and approve an aBLA for an “interchangeable” biologic. For interchangeable biologics, the act also provides certain exclusivity for the first licensed product.
There is no such thing as a generic biologic. At least not yet.
A generic small-molecule drug can be shown with scientific certainty to be identical to its reference product. Not so with biologics. Biologics are large, complex, and made using living cells. Take antibody drugs, for example. Even if two antibodies have identical amino acid sequences, they can still differ in protein folding. They can also differ in crosslinking, acetylation, and glycosylation. The list goes on. Even the slightest difference between an innovator biologic and a biosimilar candidate could render the candidate less potent, less stable, and less safe owing to problems such as unintended binding or immunomodulation. Demonstrating that one biologic is identical to another is a goal that is still out of reach scientifically.
Against this scientific backdrop, the biosimilar pathway requires the aBLA applicant to simply show that its product is biosimilar to a reference product. To do this, at least two kinds of data must support the aBLA. First, analytical data must show that the biologic candidate is “highly similar” to the reference product. Second, clinical data must demonstrate “safety, purity, and potency” for at least one approved condition. In that regard, these data must show immunogenicity, pharmacokinetics, and/or pharmacodynamics, as needed. Importantly, there can be no “clinically meaningful differences” between the biosimilar candidate and its reference product regarding safety, purity, or potency. Naturally, the aBLA applicant must meet additional requirements. For example, the biosimilar and reference products must have the same administration route, strength, and dosage form. And, the facilities and processes for making and purifying the biosimilar product must meet standards ensuring that the product will continue to be safe, pure, and potent.
Again, these are early days for the act. As of this writing, only several years have passed since the FDA implemented it. The FDA’s guidance so far suggests that it will approach biosimilar approval in a fact-based manner and will consider the “totality of the evidence.”
Biotech X makes and sells the innovator biologic TNFAb1 in the United States under the brand name X1. It has done so for twenty years. X1 is an anti-human-TNFα chimeric IgG1 human/murine antibody having a molecular weight of 150 kD. It is approved for treating rheumatoid arthritis via intravenous infusion. The X1 product is sold as a lyophilized powder for administration following aqueous reconstitution. Each X1 vial contains 100 mg TNFAb1, 500 mg sucrose, 0.5 mg polysorbate 80, and other nonactive components.
Biotech Y wishes to market a biosimilar version of X1 (i.e., bs-TNFAb1). Toward that end, scientists at Biotech Y develop a bs-TNFAb1 product. It has the same amino acid sequence as X1. Like X1, the biosimilar product is a lyophilized powder used for intravenous infusion following aqueous reconstitution. Each vial of 100 mg bs-TNFAb1 has 500 mg sucrose, 0.5 mg polysorbate 80, and other nonactive components.
Since X1 was approved twenty years ago, Biotech X’s regulatory exclusivity for it has long expired. Biotech Y files an aBLA application for its bs-TNFAb1 product. In connection with its application, Biotech Y submits data showing that its product is highly similar to X1, the reference product. Biotech Y also submits clinical data showing that its biosimilar product is safe, pure, and potent for treating rheumatoid arthritis. As required, there are no clinically meaningful differences between bs-TNFAb1 and X1. Importantly, Biotech Y relies on the clinical data that Biotech X submitted in support of its BLA for X1. Biotech Y may do this despite not having access to those data, just as an ANDA or §505(b)(2) applicant may rely on reference drug data without having access to them.
The FDA approves Biotech Y’s aBLA application for bs-TNFAb1. (Note: Biotech Y’s freedom to market its approved biosimilar product in the United States will depend on whether and how the parties resolve any disputes concerning Biotech X’s TNFAb1-related patents. The complex and murky process of resolving biosimilar patent disputes is discussed later in the chapter. Also discussed later is regulatory exclusivity for innovator biologics, a topic only alluded to in this example.)
In the world of small-molecule drugs, and with certain important exceptions, an FDA-approved generic drug is interchangeable with its reference drug. A pharmacist may, and in many states must, provide a generic drug to a patient for whom the reference drug was prescribed, absent the physician’s contrary instructions.
An interchangeable biologic would work in essentially the same way. So, to demonstrate that a biologic is interchangeable with its reference product, an applicant must submit an aBLA with information showing two things: biosimilarity to the reference product and an expectation that the two products will yield the “same clinical result” in “any given patient.” This threshold is a high one for a biologic. It is so high, in fact, that it remains uncertain if and when biosimilar interchangeability will be achieved.
EXAMPLE 16.2
Here, though, Biotech Y wishes to market an interchangeable biosimilar version of X1 (i.e., i-TNFAb1).
Biotech Y files an aBLA application for its interchangeable TNFAb1 product. In connection with its application, Biotech Y submits studies showing that its product is biosimilar to the reference product. Importantly, Biotech Y also submits information showing that its product would be expected to yield the same clinical result as X1 in any given patient. Again, since the aBLA pathway is an abbreviated one, Biotech Y may rely on the clinical data that Biotech X submitted in support of its BLA for X1, despite not having access to those data.
The FDA approves Biotech Y’s aBLA application for i-TNFAb1. (Note: Once again, Biotech Y’s freedom to market its approved interchangeable product in the United States will depend on whether and how the parties resolve any disputes concerning Biotech X’s TNFAb1-related patents. Moreover, individual state laws may hamper Biotech Y’s ability to market its product by imposing special notification requirements and other hurdles.)
The first aBLA applicant to win FDA approval for an interchangeable product is entitled to market exclusivity. This exclusivity is only effective, however, against an interchangeable product for the same indication, not against a regular (i.e., noninterchangeable) biosimilar product. That is, once the FDA approves an interchangeable product, the FDA must wait for this exclusivity to expire before approving a subsequent aBLA for another interchangeable product referencing the same innovator biologic. This exclusivity ranges from one year to forty-two months depending on the facts. It lasts at least until one year after the first licensee markets its product. It may last longer if patent litigation ensues or if the first licensee fails to market its product. This interchangeable biologic exclusivity is somewhat analogous to the 180-day ANDA exclusivity available under the Hatch–Waxman Act. Once again, it remains to be seen when making an interchangeable biologic will become possible, and how frequently this feat can be achieved once it does.
A BLA, like an NDA, is an FDA-granted right that can be worth billions of dollars. It rewards the innovator company for its time, effort, investment, and risk leading to BLA approval.
The BPCI Act further rewards the innovator by providing it with abundant exclusivity. This exclusivity coexists with the seven-year orphan drug exclusivity and six-month pediatric exclusivity already available for innovator biologics and small-molecule drugs.
The centerpiece of the reward package is a twelve-year market exclusivity period for innovator biologic products. Thus, once a new biologic product is approved, the FDA must wait twelve years before approving (i.e., granting a license for) a biosimilar or interchangeable product referencing the approved product. The BPCI Act also grants a four-year data exclusivity period for innovator biologics. This means that once a new biologic is approved, the FDA must wait four years before accepting a biosimilar or interchangeable application referencing the approved product. These market and data exclusivities function independently of whether the BLA holder also has patent protection for the approved biologic or its use.
EXAMPLE 16.3
Biotech X is an innovator company that makes and sells biologics for treating rheumatoid arthritis. The company’s new rheumatoid arthritis drug candidate, TNFAb1, is an anti-human-TNFα chimeric IgG1 human/murine antibody. Biotech X wishes to market its TNFAb1 product in the United States. Toward that end, it files with the FDA a BLA for an injectable TNFAb1 product.
The FDA approves Biotech X’s BLA. A twelve-year market exclusivity period attaches. This means that during the first twelve years after BLA approval, the FDA will not approve any biosimilar or interchangeable product referencing Biotech X’s TNFAb1 product. A four-year data exclusivity period also attaches. This, in turn, means that during the first four years after BLA approval, the FDA will not accept any application for a biosimilar or interchangeable product referencing Biotech X’s approved product.
To further illustrate this sequence of events, assume that the FDA approves Biotech X’s BLA on June 1, 2023. First, a twelve-year market exclusivity period attaches. This exclusivity will last until June 1, 2035. Before that date, the FDA will not approve any competing biosimilar or interchangeable TNFAb1 product. Second, a four-year data exclusivity period also attaches with respect to Biotech X’s BLA. This means that the FDA will not accept an application for any competing biosimilar or interchangeable TNFAb1 product before June 1, 2027 (i.e., four years from the BLA approval date).
Absent other applicable regulatory exclusivities, the FDA will be free to approve all products biosimilar to or interchangeable with Biotech X’s TNFAb1 product after June 1, 2035. (Note: BLA market and data exclusivities are effective only against biosimilar and interchangeable products. They have no effect against competing innovator products. So, for example, the twelve-year market exclusivity would not block the FDA from approving a competitor’s BLA for a new, more potent injectable anti-TNFα chimeric IgG1 product before the twelfth anniversary of Biotech X’s TNFAb1 approval.)
The twelve-year market exclusivity is more than twice the five-year NCE exclusivity granted for small-molecule drugs. Some have advocated for even longer biologic exclusivity, arguing that more time is needed for innovators to recoup their development investments. Others have advocated for much less exclusivity. They have maintained that a twelve-year duration is excessive, it unjustly enriches innovators, and it frustrates the BPCI Act’s purpose of lowering biologic drug prices.
Resolving this controversy by determining an appropriate biologic exclusivity period agreeable to all would be difficult, if not impossible. It is beyond the scope of this book to properly explore the factors relevant to doing so. We only flag this issue at all given its centrality to the act’s very purpose.
The BPCI Act provides a mechanism for a biosimilar applicant and reference product sponsor to preemptively resolve patent disputes. It is nicknamed the “patent dance.”
As we learned in chapter 15, Hatch–Waxman litigation allows preemptive resolution of patent disputes between innovator and generic companies. That is, both parties can resolve questions of patent infringement and validity before generic market entry. The Hatch–Waxman Act accomplishes this via a tried and true legal framework. The Paragraph IV challenge, the forty-five-day window for bringing a patent infringement suit, and the thirty-month stay of approval once litigation begins are just some of its hallmarks. This framework is imperfect to be sure. Yet, after years of refinement, interpretation, and use, this adversarial process serves its purpose well. And, it does so according to rules that, although complex, are relatively understandable and reasonable.
Not so, the patent dance.
The dance begins with an overture by the biosimilar applicant. Once the FDA accepts the applicant’s aBLA for review, the applicant has twenty days to provide the reference product sponsor (usually the innovator company) with the aBLA and information about manufacturing the biosimilar product. Within sixty days of receiving the aBLA copy and manufacturing information, the sponsor must provide the applicant with a list of patents. This list includes patents that the sponsor believes would be infringed by the biosimilar product. It also identifies those patents that the sponsor would be willing to license to the applicant. Then, within sixty days of receiving this list, the applicant must respond to it. In its response, it must do one of two things with respect to each allegedly infringed patent listed. It may describe, in detail, how each claim of the patent would be held invalid, unenforceable, or not infringed. Or, if it cannot or will not do that, the applicant must state that it won’t market its biosimilar product before that patent expires. The applicant must also respond regarding each patent identified as one the sponsor is prepared to license. Additionally, the applicant may provide its own list of the sponsor’s patents that the applicant believes might be infringed by the unauthorized manufacture or sale of the biosimilar product. The sponsor then has sixty days to answer the applicant’s reply. In its answer, the sponsor must rebut—on a claim-by-claim basis—the applicant’s assertions of patent invalidity, unenforceability, and/or noninfringement. Once the applicant receives the sponsor’s reply, the two parties have fifteen days to engage in good faith negotiations as to which patents on the exchanged lists, if any, will be the subject of an immediate patent infringement litigation. If the parties reach agreement within this time, litigation over the agreed-upon patents proceeds within thirty days. If they don’t, there is yet another exchange of patent lists. First, the applicant notifies the sponsor of the number of patents it believes should be the subject of infringement litigation. Then, within five days, the parties must simultaneously exchange lists. The applicant’s list contains the patents it believes should be litigated. Likewise, the sponsor’s list contains the patents it believes should be litigated. And the number of patents on the sponsor’s list may not exceed the number of patents on the applicant’s list—unless, of course, the applicant lists no patents. In that case, the sponsor may list one patent. Patent litigation begins within thirty days after the parties exchange their lists.
The biosimilar applicant’s legal journey doesn’t end there. Indeed, this post-exchange litigation is but the first of two litigation phases. At least 180 days prior to the first commercial marketing of its biosimilar product, the applicant must send a notice of commercial marketing to the sponsor. This triggers the second phase of patent litigation. In it, the sponsor may seek a preliminary injunction temporarily stopping the sale of the applicant’s biosimilar product and/or bring suit on any newly issued or licensed patents, as well as any patents not involved in the first patent litigation.
While the Hatch–Waxman and BPCI Acts both have processes for preemptively resolving patent disputes, they differ profoundly. The patent dance is Byzantine to its core. Equally problematic is the uncertainty as to how parties must engage in the dance and to what degree they may decline to participate in it.
In essence, the patent dance is a nascent, confusing, and largely untested process that seems to raise more questions than it answers. Only time, the crucible of litigation, and perhaps more legislation will determine how—or even if—it serves the act’s ostensible purpose of lowering biologic prices while rewarding biologic innovation.
Legally speaking, the FDA’s system for approving biologic drugs is bifurcate. There is the BLA pathway for innovator biologics and the aBLA pathway for biosimilar and interchangeable products. The BLA pathway requires ab initio drug development and clinical testing. It is costlier than biosimilar development but rewards licensure with abundant exclusivity. It is also less likely to succeed than biosimilar development, yet more lucrative when it does. The successful BLA applicant may enter the market as long as third-party patents don’t preclude it from doing so. Meanwhile, the aBLA pathway permits a shortened clinical trial and is less expensive and less risky than innovator drug development. The successful aBLA applicant may enter the market, however, only after reference product exclusivity expires and only after it successfully evades and/or challenges the sponsor’s patent rights via the patent dance or other means.
What of a biologic that structurally resembles—but is superior to—an approved innovator biologic? Such biologics exist, of course, and are known as biobetters. Biobetters form a subset of innovator biologics. As such, they are approved via the BLA pathway. There is no third, hybrid-like approval pathway for these drugs despite their hybrid-like nature.
A biobetter acts on the same clinically validated target that the original biologic does. A biobetter may also share some or all of the original product’s primary structure. In that sense, a biobetter is not developed ab initio. Unlike a biosimilar, though, it structurally differs in some way from the original biologic and does so by design. This structural difference can, for example, result from a polypeptide truncation, a point mutation, differential glycosylation, or another post-translational modification. As the name makes clear, this structural difference conveys a clinically meaningful advantage over the original product. This advantage can take the form of greater potency, a more favorable half-life, or fewer side effects, to name a few. Roche’s leukemia drug Gazyva (obinutuzumab) is an example of a biobetter version of that same company’s blockbuster biologic Rituxan (rituximab). Another example is Amgen’s anemia drug Aranesp (darbepoetin alfa). This product is a more heavily glycosylated version of its popular Epogen (epoetin alfa) product.
Once again, the law provides only two pathways for the FDA to approve biologics. Yet, there are at least three competitive biologic categories from which a biologic maker may choose: a biosimilar, a biobetter, and an innovator biologic not based on an existing biologic. Important here is that if a company wishes to compete with the maker of an approved innovator biologic by launching its own product that is structurally and functionally based on the innovator biologic, it may do so by developing either a biosimilar or a biobetter.
EXAMPLE 16.4
Biotech X developed the innovator biologic TNFAbX. TNFAbX is a chimeric IgG1 human/murine antibody having a molecular weight of 150 kD. It targets human TNFα. The FDA just approved Biotech X’s BLA for TNFAbX to treat rheumatoid arthritis. Thus, Biotech X is entitled to twelve years of market exclusivity, during which the FDA will not approve an aBLA for a biosimilar version of TNFAbX. It is also entitled to four years of data exclusivity, during which the FDA will not accept an aBLA for a biosimilar version of TNFAbX.
Biotech X begins marketing TNFAbX in the United States under the brand name BX1. The BX1 product is sold as a lyophilized powder for administration following aqueous reconstitution. Each BX1 vial contains 100 mg TNFAbX, 500 mg sucrose, 0.5 mg polysorbate 80, and other nonactive components.
Biotech Y makes and sells biologics in the United States. The company wishes to compete with Biotech X by developing and selling a product based on BX1. Toward that end, Biotech Y pursues one of two routes. In Scenario 1, it pursues the biosimilar route. In Scenario 2, it pursues the biobetter route.
SCENARIO 1
Biotech Y chooses to develop a biosimilar version of BX1 (i.e., bs-TNFAbX). Toward that end, scientists at Biotech Y develop a bs-TNFAbX product. It has the same amino acid sequence as BX1. Like BX1, the biosimilar product is a lyophilized powder used for intravenous infusion following aqueous reconstitution. Each vial of 100 mg bs-TNFAbX has 500 mg sucrose, 0.5 mg polysorbate 80, and other nonactive components.
Biotech Y completes development of its biosimilar product six years after the FDA approves BX1 and files an aBLA application for it. Biotech Y may do so since Biotech X’s data exclusivity period expired two years ago (i.e., four years after FDA approval), even though its market exclusivity will not expire for another six years. In connection with its application, Biotech Y submits data showing that its product is highly similar to BX1. Biotech Y also submits clinical data showing that its biosimilar product is safe, pure, and potent for treating rheumatoid arthritis. There are no clinically meaningful differences between the two products. Importantly, Biotech Y relies on the clinical data that Biotech X submitted in support of its BLA for BX1.
Upon expiry of Biotech X’s twelve-year market exclusivity, the FDA approves Biotech Y’s aBLA application for bs-TNFAbX. Of course, Biotech Y’s freedom to market its approved biosimilar product in the United States will depend on the outcome of the patent dance and/or any other proceedings for resolving disputes concerning Biotech X’s TNFAbX-related patents.
SCENARIO 2
Biotech Y chooses to develop a biobetter version of BX1 (i.e., bb-TNFAbX). Toward that end, scientists at Biotech Y develop a biobetter product. It has essentially the same amino acid sequence as BX1. However, Biotech Y’s product differs from BX1 by several point mutations. These render the biobetter product significantly more potent and significantly safer than BX1. Like BX1, bb-TNFAbX would be sold as lyophilized powder used for intravenous infusion following aqueous reconstitution. Each vial of Biotech Y’s product has 50 mg of bb-TNFAbX, as well as appropriate amounts of sucrose, polysorbate 80, and other nonactive components.
Biotech Y completes development and clinical testing of its biobetter product in eight years. Even though Biotech X’s twelve-year market exclusivity for BX1 will not expire for another four years, Biotech Y may file a BLA application for its product and seek immediate approval, since Biotech X’s exclusivity is not effective against the approval of a subsequently filed BLA for an innovator biologic. In connection with its application, Biotech Y submits all preclinical and clinical data showing that its biobetter product is safe, pure, and potent for treating rheumatoid arthritis and that it is safer and more potent than BX1. Although bb-TNFAbX’s target was clinically validated by virtue of BX1’s testing, Biotech Y may not simply rely on Biotech X’s clinical data for BX1 as it could if its product were a biosimilar.
One year later, the FDA approves Biotech Y’s BLA application for bb-TNFAbX. This approval occurs three years earlier than it could have were Biotech Y’s product a biosimilar. Additionally, Biotech Y’s approved biobetter product is entitled to its own twelve-year market exclusivity against biosimilar competitors. As a BLA applicant, Biotech Y need not, and may not, participate in the patent dance with Biotech X to resolve disputes, if any, concerning Biotech X’s BX1-related patents. Instead, Biotech Y must resolve such disputes outside the context of the BPCI Act. Until it does at least this much, Biotech Y will not be free to market its bb-TNFAbX product in the United States, even though the FDA has approved it.
As we can see, each of the biosimilar and biobetter approaches has its own costs, hurdles, uncertainties, and rewards. The factors favoring one over the other are numerous, complex, evolving, and beyond the scope of this book.