Not everyone shares the view that authorized generics are a boon, and concerns are rising that the marketplace may soon see the advent of authorized biologics.
Earlier this year, Eli Lilly and Company rolled out a lower-priced authorized generic of its insulin lispro injection (Humalog) in the United States. Lilly framed the launch as solution to lower the cost of insulin for US patients; the authorized generic is available in a single vial for a list price of $137.35—50% lower than the list price for the branded Humalog.
According to David A. Ricks, Lilly's chairman and chief executive officer, a lower-priced insulin can help patients at the pharmacy counter “until a more sustainable model is achieved.” Supporters of authorized generics—which are the same products as brand-name drugs but may have minor differences, such as different inactive ingredients or different colors or markings—say that these cheaper versions of existing products can help mitigate skyrocketing prices for patients.
However, not everyone shares the view that authorized generics are a boon, and concerns are rising that the marketplace may soon see the advent of authorized biologics.
Kaiser Health News reported this week that authorized generics are a potential tactic to stave off competition from traditional generics; the threat of an authorized generic entering the market can be enough to keep rival drug makers from launching their traditional generics.
That’s in part because the courts have held that, during the 180 days of exclusive rights to market the first traditional generic, a brand-name drug maker can launch an authorized generic that may compete with that product. As former FDA Commissioner Scott Gottlieb, MD, wrote in a Health Affairs blog in May 2019, the exclusivity period is intended to allow a first generic filer to earn a substantial return on investment in the work needed to develop a generic, while after the 180 days lapses, other generic filers can enter the market and drive down prices.1 The specter of an authorized generic entering the market during the 180 days could create an untenable amount of uncertainty—or a lack of profitability—for the maker of a traditional generic.
In fact, while introducing authorized generics during the 180-day exclusivity period for first generic filers results in short-term reductions in consumer retail prices, their introduction also reduces, on average, the first-filer’s revenues by 40% to 52% during the exclusivity period, and by 53% to 62% during the 30 months following the exclusivity period.2 To help limit uncertainty for those traditional generic makers who do move forward with their products, some patent settlements may include clauses in which brand-name drug makers promise not to introduce authorized generics if traditional generic makers agree to delay market entry—a scenario that some say may constitute a “pay-for-delay” agreement.
Some of these concerns are specific to the generics market: The Biologics Price Competition and Innovation Act (BPCIA), unlike the Hatch-Waxman Acts, does not feature a 180-day exclusivity period for first products to challenge innovator drugs in the market. However, there is growing concern that, in the nascent US biosimilars market, the threat of an authorized biologic could create uncertainty for drug makers deciding whether to invest in costly development of biosimilars; even in market conditions without branded biologics, challenges with patent settlements have led some drug makers to bow out of development projects.
So far, 2 innovator drug makers have signaled an interest in pursuing authorized versions of their own innovator biologics; just weeks before it announced plans for its authorized generic of its insulin product, Lilly asked, in a comment letter in response to the FDA’s proposed approach to the transition of insulins to regulation as biologics and biosimilars in 2020, for the agency to clarify whether drug product developers can introduce “second versions” of their innovator biologics, calling these potential products “branded biosimilars” or “authorized biologics.”
The transition of insulins to regulation as biologics has been hailed as potential watershed moment, because, for the first time, interchangeable insulin products will have the potential to be approved under the BPCIA, allowing them to be substituted at the pharmacy counter under applicable state laws. If branded insulin biosimilars become more common, it could reduce the incentive to develop interchangeable biosimilars.
Additionally, just days ago, Amgen signaled in its second quarter earnings call that it, too, may be considering a strategy for branded products; Amgen’s chairman and chief executive officer, Bob Bradway, said during the call that the company had “the prospect of branded biosimilars” in the future as a way to add to its top line.
References
1. Gottlieb S. The HELP Committee’s fix for 180-day generic marketing exclusivity: does it solve the problem? Health Affairs Blog. doi: 10.1377/hblog20190529.223594.
2. Jones GH, Carrier MA, Silver RT, Kantarjian H. Strategies that delay or prevent the timely availability of affordablegeneric drugs in the United States. Blood. 2016;127(11):1398-1402. doi: 10.1182/blood-2015-11-680058.
Challenges and Guidance in Biosimilar Assessment: An ISPOR Report on HTA Agency Approaches
May 14th 2024The ISPOR report highlights the urgent need for clear guidance on when and how to conduct health technology assessments (HTAs) for biosimilars, emphasizing the challenges faced by HTA agencies and the evolving role of HTAs in evaluating biosimilar value.
Biosimilars Policy Roundup for April 2024—Podcast Edition
May 5th 2024On this episode of Not So Different, The Center for Biosimilars® glances back at all the major biosimilar policy updates from April, including 2 FDA approvals, 1 European approval, and several insights into possible policy changes from the Festival of Biologics USA conference.
A New Chapter: How 2023 Will Shape the US Biosimilar Space for 2024 and Beyond
December 31st 2023On this episode of Not So Different, Cencora's Brian Biehn and Corey Ford take a look back at major policy and regulatory advancements in 2023 and how these changes will alter the space going forward.
Dr Sophia Humphreys Provides Calls to Action to Ensure Biosimilar Market Sustainability
April 30th 2024During her presentation during Festival of Biologics USA, Sophia Humphreys, PharmD, director of formulary management at Sutter Health, gave an overview of current challenges and opportunities for the biosimilar market and offered calls to action for multiple stakeholders.
Challenges and Guidance in Biosimilar Assessment: An ISPOR Report on HTA Agency Approaches
May 14th 2024The ISPOR report highlights the urgent need for clear guidance on when and how to conduct health technology assessments (HTAs) for biosimilars, emphasizing the challenges faced by HTA agencies and the evolving role of HTAs in evaluating biosimilar value.
Biosimilars Policy Roundup for April 2024—Podcast Edition
May 5th 2024On this episode of Not So Different, The Center for Biosimilars® glances back at all the major biosimilar policy updates from April, including 2 FDA approvals, 1 European approval, and several insights into possible policy changes from the Festival of Biologics USA conference.
A New Chapter: How 2023 Will Shape the US Biosimilar Space for 2024 and Beyond
December 31st 2023On this episode of Not So Different, Cencora's Brian Biehn and Corey Ford take a look back at major policy and regulatory advancements in 2023 and how these changes will alter the space going forward.
Dr Sophia Humphreys Provides Calls to Action to Ensure Biosimilar Market Sustainability
April 30th 2024During her presentation during Festival of Biologics USA, Sophia Humphreys, PharmD, director of formulary management at Sutter Health, gave an overview of current challenges and opportunities for the biosimilar market and offered calls to action for multiple stakeholders.
2 Commerce Drive
Cranbury, NJ 08512