Evaluate the Current Biosimilar Landscape and Strategies to Secure Access Jim Van Lieshout August 16, 2017 1
Disclosure Statement James R. Van Lieshout, Vice President, Trade and Industry Relations Apobiologix, a division of ApoPharma, USA This is a non-promotional program. Any product names used in this presentation are only for reference purpose. 2
Learning Objectives By the end of this session you will be able to Address the current landscape and changes in the marketplace dynamics Gain Insight into the shifts in usage, market response and current data available Understand approval pathways and strategies to ensure reimbursement and coverage Identify potential patient access and reimbursement hurdles and develop strategic plans to address these obstacles 3
Test Your Knowledge 4
True or False Biosimilars are Biologics TRUE 5
Descriptions and Definitions Introduction to Biologics 6
Biologics are larger and more complex than traditional small molecules 1,2 Small Drug Aspirin MW 180 Da Medium Biologic Filgrastim 18,880 Da Large Biologic Immunoglobulin 150,000 Da Bike ~ 20lbs Car ~ 3,000lbs Business Jet ~ 30,000lbs References: 1. Haag et. al. The emergence of biosimilars: how are they different from generics and what are the implications from marketing? Presented at: European Pharmaceutical Market Research Association Meeting; June 29, 2011. 2. Schellekens H. Biosimilar therapeutics- what do we need to consider? NDT Plus. 2009; 2(suppl 1)i27-136. 7
All biologics undergo manufacturing process updates during their life cycle 3,4 Number of changes 40 30 20 10 0 Number of Changes in Manufacturing Process After Approval* Rituxan Remicade Enbrel Humira *Products authorized for rheumatological indications in Europe. Changes range from change in supplier of a cell culture to new purification methods or new manufacturing sites. References: 3. Schneider CK. Ann Rheum Dis. 2013;72:315-318. 4. Mahler, Mojas, Roche Kepler Swiss Seminar, www.roche.com. 2007. 8
Test Your Biosimilar Knowledge 9
True or False Biosimilars are the same as generic drugs FALSE 10
BIOSIMILARS GENERICS 11
Definition of a biosimilar Biological product that is licensed (approved) by the FDA based on a showing that they are highly similar to an already FDA-approved biological product, known as the reference product have no clinically meaningful differences in terms of safety and effectiveness from the reference product. Only minor differences in clinically inactive components are allowed. U.S. Food and Drug Administration Reference: 5. United States Food and Drug Administration. Information for Healthcare Professionals (Biosimilars). http://www.fda.gov/drugs/developmentapprovalprocess/howdrugsaredevelopedandapproved/approvalapplications/therapeuticbiologicapplications/biosimilars/ucm241719.htm. Accessed January 26, 2017. 12
Address the Current Landscape and Changes In the Marketplace Dynamics 13
Biologics Price Competition and Innovation Act 2010 Created an abbreviated licensure pathway for biological products shown to be biosimilar to or interchangeable with an FDA-licensed reference product LICENSURE PATHWAYS Reference Product Biosimilar Limits biosimilar application to a single reference biologic licensed under 351(a) Requires reliance on FDA s previous determination that reference product is safe, pure, and potent, as well as publicly available information Two potential approvals Biosimilar Interchangeable References: 6. http://www.fda.gov/downloads/drugs/guidancecomplianceregulatoryinformation/ucm216146.pdf. 14
Experience and Expectations in Europe 7 Payers expect discounts for oncology biosimilars to align with those observed in EU The average price reduction of biologics was 27% in the EU in general Most payers are seeking a 20-25% differential at the net level (across markets) They expect discounts to increase with time, as more competitors enter the market The cost-saving potential of biosimilars in the EU and US could equal even more than 50 billion EUR over 5 years and reach even 100 billion EUR by 2020 Source: http://www.biosimilarsip.com/2017/06/20/u s compares europe biosimilar approvals products pipeline/ Reference: 7. IMS (2016). Delivering on the Potential of Biosimilar Medicines. The Role of Functioning Competitive Markets. IMS Institute for Healthcare Informatics. Available at: http://www imshealth com/files/web/imsh%20institute/healthcare%20briefs/documents/ims Institute Biosimilar Brief March 2016 pdf 15
The Purple Book 1984 Hatch Waxman Act, Orange Book Generics list demonstrating active ingredient is the same as previously approved The Purple Book Biosimilars list biological products, including any biosimilar and interchangeable biological products licensed by the FDA under the Public Health Service Act (PHS Act) Currently under review (as of July 2017) According to the FDA, the Purple Book will allow users to see whether or not a biological product licensed under section 351(k) of the PHS Act has been determined by the FDA to be biosimilar to or interchangeable with an already licensed FDA biological product Reference: 8. www.fda.gov/drugs/resources. 16
State Pharmacy Laws Mandate Substitution of Drugs As of July 2017 Legislation currently progressing in 8 states Since 2013, 36 states and Puerto Rico have enacted state pharmacy practice acts to address biologics and biosimilars Legislation currently progressing Alabama Arkansas Alaska Connecticut Michigan New York Oklahoma Vermont Reference: 9. National Conference of State Legislatures: http://www.ncsl.org/research/health/state-laws-and-legislation-related-to-biologic-medications-and-substitution-ofbiosimilars.aspx 17
The Value of Biosimilars and Cost Considerations 18
Development of Biosimilars Still Requires Significant Time and Resources 10 Generic Biosimilar Reference # of patients 20 50 ~500 1000-2000 Time to market 2 3 years 7 8 years 8 12 years Development ($) $ 2 3M $100 150M $500M 1B Probability of getting to market 90 99% 50% 5% References: 10: Montgomery, Michael S. [2014]. Generics and Biosimilars: Mapping the biosimilar regulatory approval pathways against the Hatch- Waxman Act and Projecting Future Effects on the Biologics Market and Patient Protection. 19
Potential Cost Savings from Biosimilars to the U.S. Healthcare System for 11 Products 11 Competition from biosimilars could reduce federal drug spending in the United States by roughly $25 billion over 10 years 12 Potential savings with biosimilars could reach $250 billion by 2024 13 Projected U.S. Spend on 11 Specific Biologics (in 000s) $140,000,000 $120,000,000 $100,000,000 $80,000,000 $60,000,000 Without Biosimilars With Biosimilars Savings Projection with Biosimilars $40,000,000 Based on 11 most likely biologic drugs to come off patent in the next 10 years $20,000,000 $0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 References: 11. Rovira J, et al. GaBI J. 2013;2(1):30-35. 12. Congressional Budget Office. Biologics price competition and innovation act of 2007. S. 1695. 13. Miller S. The $250 billion potential of biosimilars. http://lab.express-scripts.com/lab/insights/industry-updates/the-$250-billion-potential-of-biosimilars. Accessed January 26, 2017. 20
Biosimilars May Provide Multiple Benefits to the U.S. Healthcare System Greater Competition Introduces competition and may drive down biologic costs 14 Foster Innovation Provides an added incentive for investment in the development of innovative new biologic products by originator companies 14 Greater Patient Access Due to improved affordability, a greater proportion of eligible patients should be able to benefit from biologic treatment 15,16,17,18 References: 14. Buffery D. Am Health Drug Benefits. 2011;4(2):120. 15. Scheinberg MA, et al. Nat Rev Rheumatol. 2012;8(7):430-436. 16. Strober BE, et al. J Am Acad Dermatol. 2012;66(2):317-322. 17. Rak Tkaczuk KH, et al. Semin Oncol. 2014;41(suppl 3):S3-S12. 18. Zelenetz AD, et al. J Natl Compr Canc Netw. 2011;9(suppl 4):S1-S22. 21
Gain Insights Into the Shifts In Usage Market Response and Current Data Available 22
Shift In Care Over The Past 10 Years 19 Office-based chemo care was 84% of the market in 2004 In 2014, it dipped to 54% This shift alone cost Medicare $2 Billion in 2014 In 2016, the monthly rate of community oncology practice closures increased 87% from the previous year Factors: ASP change in reimbursement 2 CMS Drug cuts Shift to 340B Reference: 19. MedPAC, Report to the Congress: Overview of the 340B Drug Pricing Program (May 2015). 23
Players to Watch In the Growing Specialty Pharmacy Marketplace Primarily with pharmacy dispensed products Leading specialty drug dispensing companies CVS Health Accredo (Express Scripts) Walgreens BriovaRx (United Healthcare) Diplomat Pharmacy Reference: 20. The 2016 Economic Report on Retail, Mail, and Specialty Pharmacies, Exhibit 41 24
Understand Approval Pathways and Strategies to Ensure Reimbursement and Coverage 25
Approval Pathways in the United States Small Molecules Approved via Food, Drug and Cosmetic Act (FDCA) Biologics Approved via Public Health Service Act (PHSA) Generics Biosimilars New Drug Application (NDA) Abbreviated new drug application (ANDA), Hatch-Waxman Biologics license application (BLA) 351(a) Biosimilar biologics license application (BPCI Act) 351(k) Safety and efficacy must be demonstrated Bioequivalence must be demonstrated Safety and efficacy must be demonstrated Must demonstrate high similarity to reference No clinically meaningful differences BPCI = Biologics Price Competition and Innovation References: 21. http://www.fda.gov/downloads/drugs/guidancecomplianceregulatoryinformation/ucm216146.pdf.
Current Regulatory and Legislative Issues with Biosimilars Naming Labeling Interchangeability BDUFA funding REMS/Sampling access Patent litigation. 27
340B Growth & the Impact on the Oncology Marketplace 22 In 2004, 340B was 3% of Part B, compared to 25% in 2014 CMS provided a new proposal to significantly affect 340B care and costing for hospitals Med PAC Part B recommendations Lower cost options in Oncology drug care PBM s to negotiate drug prices for Part B Formularies by PBM S Market needs to look at the Oncology Care Model Reference: 22. http://archive.communityoncology.org/site/blog/tag/millman.html 28
Identify Patient Access and Reimbursement Hurdles and Develop Strategic Plans to Address Obstacles 29
Lower Prices Increase Patient Access and Product Utilization 30
Payer (and Employers) Perspective on Biosimilars Based on a national survey of health insurers by Avalere, 81% of plans report they are covering a biosimilar product Nearly all payers indicate that a biosimilar s cost relative to the originator is a key decision-making factor for determining coverage Payers are looking to be influential in the use of biosimilars As payers negotiate lower provider reimbursement levels, providers are incented to seek lower cost alternatives 23 Lower costs for the payer may be passed on to the patient as lower premiums or lower coinsurances, which may increase access to healthcare resources References: 23. Mulcahy, Andrew W., Zachary Predmore and Soeren Mattke. The Cost Savings Potential of Biosimilar Drugs in the United States. Santa Monica, CA: RAND Corporation, 2014. http://www.rand.org/pubs/perspectives/pe127.html 31
Patient Perspective on Biosimilars Patient out-of-pocket expenses are becoming a crucial element in Rx care of patients Lower cost alternatives should expand access to important medicines in the US, as has been seen in Europe Greater patient access, conceptually, will lead to improved health status, thus lowering overall healthcare costs 24 References: 24. Mulcahy, Andrew W., Zachary Predmore and Soeren Mattke. The Cost Savings Potential of Biosimilar Drugs in the United States. Santa Monica, CA: RAND Corporation, 2014. http://www.rand.org/pubs/perspectives/pe127.html 32
Reimbursement: What You Need To Know CMS final rule CY 2016: Revisions to Payment Policies Under the Physician Fee Schedule 21 More than one biosimilar product to the same reference product Biosimilars are excluded from coverage gap discount program (donut hole) Provider reimbursed at ASP + 6% of reference product (4.23% with sequestration) At launch, Medicare will pay 106% of WAC until ASP is provided% of WAC CMS will group biosimilar products that rely on a common reference product s biologics license application into the same payment calculation; products will share a common payment limit and HCPCS code. Modifiers will be used to distinguish between biosimilar products that appear in the same HCPCS code but are made by different manufacturers All biosimilars to the same reference product will share the same J-code and payment rate Each biosimilar will have a random 4-letter suffix Reference: 25. 2016 Physician Fee Schedule Final Rule, 80 Fed. Reg. 71906 (Nov. 16, 2015). 33
Fighting Shared J-Codes The need to eliminate shared J- codes is getting attention in Congress 52 representatives and 9 GOP senators have sent letters to Secretary Price and Administrator Verma AAM Biosimilar Council is working in Washington D.C. to try to revise the biosimilar coding policy 34
Federal Reimbursement Landscape Medicare Part B Reimbursement treats biosimilars as multiple-source, generic-like products Shared J- code Medicare Part D CMS views biosimilars as non-branded products Excluded in coverage cap (Donut hole) Medicaid Manufacturer rebates position biosimilars as branded products 23% product rebate 35
Summary 36
Summary 26,27 Biosimilars are biological compounds that are highly similar to their reference drugs with no clinically meaningful differences in safety, purity, and potency Biosimilars, like their reference biologic products, are more complex in structure than pure chemical substances The active ingredient of a generic drug is structurally identical to the active ingredient of the reference drug Biosimilars are structurally highly similar, but not identical, to their reference biologic products Market access in reimbursement will be critical factors in the adoption of biosimilars Biosimilars will create greater competition in the marketplace, increasing the number of safe and effective treatment options References: 26. http://www.fda.gov/drugs/developmentapprovalprocess/howdrugsaredevelopedandapproved/approvalapplications/ TherapeuticBiologicApplications/Biosimilars/ucm241718.htm. 27. Zelenetz et al. J Natl Compr Canc Netw. 2011;9(suppl 4):S1-S22. 37
Thank you for your participation 38
Reference List 1. Haag et. al. The emergence of biosimilars: how are they different from generics and what are the implications from marketing? Presented at: European Pharmaceutical Market Research Association Meeting; June 29, 2011. 2. Schellekens H. Biosimilar therapeutics- what do we need to consider? NDT Plus. 2009; 2(suppl 1)i27-136. 3. Schneider CK. Ann Rheum Dis. 2013;72:315-318. 4. Mahler, Mojas, Roche Kepler Swiss Seminar, www.roche.com. 2007. 5. United States Food and Drug Administration. Information for Healthcare Professionals (Biosimilars). http://www.fda.gov/drugs/developmentapprovalprocess/howdrugsaredevelopedandapproved/approvalapplications /TherapeuticBiologicApplications/Biosimilars/ucm241719.htm. Accessed January 26, 2017. 6. http://www.fda.gov/downloads/drugs/guidancecomplianceregulatoryinformation/ucm216146.pdf. 7. IMS (2016). Delivering on the Potential of Biosimilar Medicines. The Role of Functioning Competitive Markets. IMS Institute for Healthcare Informatics. Available at: http://www.imshealth.com/files/web/imsh%20institute/healthcare%20briefs/documents/ims_institute_biosimilar_brief_mar ch_2016.pdf 39
Reference List (cont.) 8. www.fda.gov/drugs/resources. 9. National Conference of State Legislatures: http://www.ncsl.org/research/health/state-laws-and-legislation-related-tobiologic-medications-and-substitution-of-biosimilars.aspx 10. Montgomery, Michael S. [2014]. Generics and Biosimilars: Mapping the biosimilar regulatory approval pathways against the Hatch-Waxman Act and Projecting Future Effects on the Biologics Market and Patient Protection. 11. Rovira J, et al. GaBI J. 2013;2(1):30-35. 12. Congressional Budget Office. Biologics price competition and innovation act of 2007. S. 1695. 13. Miller S. The $250 billion potential of biosimilars. http://lab.express-scripts.com/lab/insights/industry-updates/the-$250-billionpotential-of-biosimilars. Accessed January 26, 2017. 14. Buffery D. Am Health Drug Benefits. 2011;4(2):120. 15. Scheinberg MA, et al. Nat Rev Rheumatol. 2012;8(7):430-436. 16. Strober BE, et al. J Am Acad Dermatol. 2012;66(2):317-322. 17. Rak Tkaczuk KH, et al. Semin Oncol. 2014;41(suppl 3):S3-S12. 18. Zelenetz AD, et al. J Natl Compr Canc Netw. 2011;9(suppl 4):S1-S22. 40
Reference List (cont.) 19. MedPAC, Report to the Congress: Overview of the 340B Drug Pricing Program (May 2015). 20. The 2016 Economic Report on Retail, Mail, and Specialty Pharmacies, Exhibit 41 21. http://www.fda.gov/downloads/drugs/guidancecomplianceregulatoryinformation/ucm216146.pdf. 22. http://archive.communityoncology.org/site/blog/tag/millman.html 23. Mulcahy, Andrew W., Zachary Predmore and Soeren Mattke. The Cost Savings Potential of Biosimilar Drugs in the United States. Santa Monica, CA: RAND Corporation, 2014. http://www.rand.org/pubs/perspectives/pe127.html 24. Mulcahy, Andrew W., Zachary Predmore and Soeren Mattke. The Cost Savings Potential of Biosimilar Drugs in the United States. Santa Monica, CA: RAND Corporation, 2014. http://www.rand.org/pubs/perspectives/pe127.html 25. 2016 Physician Fee Schedule Final Rule, 80 Fed. Reg. 71906 (Nov. 16, 2015) 26. http://www.fda.gov/drugs/developmentapprovalprocess/howdrugsaredevelopedandapproved/approvalapplications / TherapeuticBiologicApplications/Biosimilars/ucm241718.htm. 27. Zelenetz et al. J Natl Compr Canc Netw. 2011;9(suppl 4):S1-S22. 41