House Hears Testimony on Biosimilars' Role in Addressing High Drug Prices

The House Committee on Oversight and Reform held its first hearing into drug prices this week and received testimony that pointed to increased biosimilar competition as a part of the solution to the problem.

In his opening statement, Committee chair Representative Elijah Cummings, D-Maryland, said that drug companies’ price hikes to existing drugs and high launch prices for innovative products have created one of the biggest problems facing American families. Cummings called escalating prices unsustainable and a matter of life and death.

Among the experts providing testimony before the committee were Avik S.A. Roy, president of the Texas-based think tank The Foundation for Research on Equal Opportunity.

Roy testified that prescription drug use is the third largest component of US healthcare spending, despite the fact that the United States leads other advanced global economies in use of unbranded generic drugs, made possible through the Hatch-Waxman Act and its provision of a pathway for a US generic marketplace. High prices for branded drugs, he said, now outweigh efficient generic utilization. Roy pointed to patient price insensitivity and monopolistic pricing—resulting from a lack of competition for branded products like biologics—as drivers of this growth.

According to Roy, “subtle differences between Hatch-Waxman and the [Biologics Price Competition and Innovation Act, BPCIA], highly favorable to the pharmaceutical and biotechnology industries, have suffocated biosimilar competition.” In addition to questioning the longer exclusivity periods provided for biologics versus small-molecule drugs, Roy took issue with the fact that the BPCIA does not allow for automatic substitution of biosimilars at the pharmacy level unless they are granted interchangeable status by the FDA.

Roy also incorrectly stated that the BPCIA requires costly phase 3 clinical studies for biosimilars. The BPCIA does not, in fact, require phase 3 studies, and Coherus BioSciences’ pegfilgrastim biosimilar, Udenyca, was recently approved on the basis of analytical similarity studies as well as pharmacokinetic, pharmacodynamic, and immunogenicity studies.

Roy also pointed to patent issues—stating that patent litigation for biologics could exceed $100 million per product—and rebates paid by brand-name drug makers to pharmacy benefit managers as challenges to biosimilars.

Among Roy’s suggestions are reforms to the BPCIA that would allow for pharmacy-level substitution of biosimilars without interchangeable designations as well as government subsidies of legal costs for biosimilar developers who are challenging patents on originator products.

The committee also heard testimony from other experts, including Gerard F. Anderson, PhD, of the Johns Hopkins School of Medicine, who explained that drug makers may be gaming the Orphan Drug program to block competition for their products.

Similarly, Aaron S. Kesselheim, MD, JD, MPH, of Harvard Medical School and Brigham and Women’s Hospital, testified that patent exclusivities constitute government-granted monopolies on drugs and pointed to the example of Humira’s “patent thicket” that has forestalled US competition until 2023.