As he wraps up his final weeks as commissioner of the FDA, Scott Gottlieb, MD, talked about the factors holding back biosimilars in the United States.
Scott Gottlieb, MD, is trying to wrap up loose ends as he prepares to leave what he described as “the best job I’ll ever have,” but he implied the FDA’s role is somewhat constrained in terms of trying to promote acceptance of biosimilars during an interview this week hosted by the Hutchins Center on Fiscal & Monetary Policy and the USC-Brookings Schaeffer Initiative for Health Policy at the Brookings Institution.
The outgoing commissioner was asked by Anna Edney, a Bloomberg News reporter, if the FDA, or the government, can do anything about patent thickets. Last week, HHS Secretary Alex Azar appeared before the Senate Finance Committee and said that “ending anticompetitive practices that delay or restrict biosimilar market entry” is part of the administration’s plan to lower the cost of prescription drugs.
Gottlieb said, “I would point first and foremost to some of the commercial obstacles that biosimilars and the fact that the incumbent biologics have large royalties associated with them,” he said, noting that manufacturers “ramp up the royalties on biosimilar entry.”
A health insurer that adopts a biosimilar onto its formulary loses the rebates and needs to be able to shift enough market share to the biosimilar to make up for the loss of rebates, he said.
However, that task is made more challenging because it is difficult to convert patients and physicians to biosimilars, Gottlieb said.
“It's not just a question of interchangeability and automatic substitutability. It's a question of some physicians’ resistance right now, particularly for biosimilars that are being used in curative therapy. I think as the market develops, as doctors gain more acceptance and comfort with biosimilars, as more biosimilars are developed against chronic therapy biologics where I think there will be more clinical comfort in converting patients over to them, I think this market will evolve and be very robust.”
In the United States, interchangeability is a legal matter that governs automatic substitution at the pharmacy level.
He said he was not surprised by the time it is taking for the market for biosimilars to develop in the United States. Early predictions made about biosimilars more than a decade ago were probably “a little bit bold” about their market predictions; the slow development mirrors a similar pace for the early days of generic products, he said.
“I think the health plans should look beyond the next quarter and look at the long run and recognize that if they put a biosimilar on formulary they might lose money for a quarter when they lose the rebates, but if they can convert their population over a 2-year period to the biosimilar they’re going to create a lot of competition that ultimately is going to lower their drug spend," Gottlieb said.
The key is controlling utilization, he said, citing Intermountain Health and Kaiser as examples. But he said the pharmacy benefit managers and health plans are supposed to do the same, adding, “If they can’t do this I’m not sure what they’re doing.”
Gottlieb was also asked if he thinks the 12-year period of market exclusivity for biologics is too long. He said that he had not looked at that issue in a while and, in his view, the issues are patient affordability and other market failures.
“I think that trying to define what the right period of time is for exclusivity in order to create the incentives to attract sufficient investment to have the robust innovation that we have is a very difficult science,” he said.
A lot of things have gone well in terms of creating “robust investment in the pharmaceutical sector” and so these are “unprecedented” times for medical science, he said.
He agreed that there are problems with affordability and access for patients but said market failures are unrelated to patent issues. For nonbiologic drugs, patents have come down, but for biologics, “most of the exclusivity goes beyond 12 years. Twelve years is not the floor for a lot of those products. The ceiling is sort of a floor.”
Gottlieb added that that there is not always a competitive product, and when there is, “we don't always have the pricing mechanisms in the marketplace that allows that competition to actually deliver savings.”
He cited Medicare Part B, where prices are not bid as they are for Part D, yet in Part D, the discounts come in the form of rebates and don’t flow to the patient. It’s the lack of product competition, price competition, and rebates that don't benefit the patient that are the 3 failures, he said.