Are Authorized Biologics Poised to Hold Back Biosimilars?

August 6, 2019
Kelly Davio

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.


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.