A complex piece of federal law known colloquially as the “patent dance” will be reviewed this spring by the U.S. Supreme Court, and the outcome is going to have a big effect on payer budgets.
At issue is the ability of brand-name drugmakers to delay the introduction of biosimilars, those highly identical versions of expensive biologics that may cost anywhere from 10% to 30% less and, presumably, reduce health care costs.
The dispute centers on dueling interpretations of the Biologics Price Competition and Innovation Act, which says a company seeking to sell a biosimilar must give the maker of the brand-name biologic at least a 180-day notice before selling its drug. The idea is to give brand-name companies enough time to determine what, if any, patent challenges to pursue before they face lower-cost rivals.
“Waiting six months to compete is a long time,” says Elaine Herrmann Blais, who heads patent litigation at the Goodwin Procter law firm. “So, there is a lot of money at stake.”
“The law created a six-month block to competition, and the court review opens up the possibility the six-month blockade will be removed,” says Elaine Herrmann Blais, an attorney who heads the patent litigation practice at the Goodwin Procter firm in Boston.
The Supreme Court will review a July 2015 federal appeals court ruling that decided biosimilar companies must wait until they receive FDA approval before they notify brand-name companies of their launch plans. The decision upset biosimilar makers, which want to give marketing information to brand-name rivals as soon as they file applications with the FDA. Why? If notice is provided to brand-name companies before FDA approval, we may see earlier biosimilar launches.
The difference in timing is a valuable right for biosimilar companies that want to market their drugs as soon as possible, but, of course, the six-month wait is also a valuable hindrance for brand-name drugmakers to exploit. The court review was sought by Sandoz, which got approval in 2015 to sell filgrastim-sndz (Zarxio), a biosimilar of Amgen’s Neupogen for boosting white blood cell counts in chemotherapy patients.
The implications of the court decision are sizeable for the entire U.S. health care system. Biosimilars are forecast to save the system $58 billion by 2021, according to the Quintiles/IMS Institute for Health Informatics. But if enough delays ensue, those savings may be shaved, which biosimilar makers argue would undermine the purpose of the law.
“The biologics already have 12 years of marketing exclusivity,” notes Bruce Leicher, general counsel and senior vice president at Momenta Pharmaceuticals, which develops biosimilars. “I don’t think anyone ever intended for the law to offer yet another six months.”
But biosimilar manufacturers—and payers hoping for lower drug costs—have two reasons to be optimistic, in Herrmann Blais’s view. First, the Supreme Court asked the U.S. Solicitor General’s office to provide its views, which turned out to largely support the Sandoz petition. Second, the court then decided to review the case, which she calls “very big news.”
Indeed, anticipation seems to be building over the ruling, which is expected this summer. “The bottom line is that you’ll get the product sooner if the 180-day notice can be given prior to approval,” says Gillian Woollett, a senior vice president at Avalere Health. However, she adds, a key issue beyond the legal tussling is whether the hoped-for savings from biosimilars actually occur, given a lack of visibility into rebates.