States consider 'carve-out'-style laws for biosimilars

While the passage of the Patient Protection and Affordable Care Act of 2010 was a milestone in a number of respects, it also was one of the biggest moments in the history of the generic drug industry since the 1984 passage of the Hatch-Waxman Act, which created an abbreviated regulatory approval pathway for generic pharmaceutical drugs.

The healthcare reform law created a similar, abbreviated pathway for biosimilars, and while the Food and Drug Administration has yet to put regulations in place, many analysts foresee significant growth in the industry when that happens. According to Visiongain, a British market-research firm, the global market for biosimilars will see rapid growth over the next 10 years as biosimilars hit the market in the United States. Indeed, companies ranging from generic drug manufacturers that already make biosimilars for the European market — including U.S.-based Hospira, Israel-based Teva Pharmaceutical Industries and Switzerland-based Sandoz — to those looking to enter the market, such as Actavis and Mylan, and large pharmaceutical companies, including Merck and Boehringer Ingelheim, all hope to claim their piece of the market.

But one major obstacle to biosimilars has been the biotechnology industry. Biotech companies have supported bills in numerous states that, while not banning substitution of biosimilars for branded biotech drugs, would certainly get in the way, saying they are necessary to promote patient safety. Unlike generic drugs, which are required to be identical to their branded counterparts, they say, it is much harder to avoid differences between branded biotech drugs and biosimilars due to the likelihood of genetic differences between the cell lines used to make them, which can dramatically change a biosimilar's properties and therefore its safety and efficacy profile.

In March, Virginia Gov. Bob McDonnell signed into law a bill that would prohibit a pharmacist from dispensing a biosimilar to substitute for a branded biotech drug if the prescriber indicated that substitution was not allowed or if the patient insisted on receiving the branded product. It also would require the pharmacist to inform the patient before dispensing and record the name of the product and its manufacturer on the dispensing record and prescription label. Pharmacists would further be required to provide cost information to the patient for the branded product and the biosimilar. The Generic Pharmaceutical Association, a Washington trade group that represents generic drug manufacturers, criticized the bill, but the bill contains a two-year sunset clause, meaning it will expire in 2015, before biosimilars are likely to hit the market in significant numbers. A similar bill failed in Maryland's legislature.

Meanwhile state legislators in Florida passed a bill last month that would allow for substitution of a biosimilar for a branded biologic when they were determined to be interchangeable, and also required the state board of pharmacy to maintain a current list of interchangeable products — drawing praise from the GPhA. An earlier version of the bill also contained restrictions on substitution, but the final version was waiting for the governor's signature, at press time, with none of them attached.

All of these bills might be moot, though. President Barack Obama's $3.8 trillion 2014 budget proposal sent to Congress in April would ban state laws to restrict biosimilar substitution, if passed.

"Biotech companies have supported bills in numerous states that, while not banning substitution of biosimilars for branded biotech drugs, would certainly get in the way."

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