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August 28, 2019

A controversy erupts: Should we give up hope on biosimilars?

Daily Briefing

    In a Wall Street Journal opinion piece last week, two experts argued that it's time to abandon biosimilars in favor of leveraging federal price regulation to make more affordable biologic drugs. The piece drew a rebuttal from former FDA Commissioner Scott Gottlieb, who argued Congress could enact policy changes to make biosmilars more competitive with their biologic counterparts. 

    Here's what each side of the debate had to say.

    The case to abandon biosimilars

    Biologics are made from genetically engineered cells and are used to treat serious conditions such as cancer and rheumatoid arthritis. While it's common for brand-name drugs to have a lower-cost generic equivalent, it's nearly impossible to replicate the genetically engineered cells used to create biologics. That's why policymakers approved the development of biosimilars, which closely resemble biologics but are not exact copies.

    However, in the op-ed, Peter Bach, director of the Drug Pricing Lab at Memorial Sloan Kettering Cancer Center, and Mark Trusheim of the MIT Sloan School of Management, argue that biosimilars are not a viable solution to reducing the price of biologic drugs.

    They explain that because biosimilars aren't perfect copies of the original drugs, "the government appropriately requires that they undergo extensive testing before going on the market."

    "This creates two new problems," Bach and Trusheim argue.

    "First, onerous testing requirements raise costs, delay market entry, and reduce the number of competitors." Even if the biosimilars are approved, biologics usually only have to compete with a few biosimilars over the years, which "would exert only mild price pressure on the original drug," they write.

    The second problem, according to Bach and Trusheim, is that biosimilar clinical trials require a large number of participants who could otherwise have participated in studies for new treatments that could have bigger clinical or monetary benefits.

    For instance, they write, "Nearly 3,000 women had to undergo clinical trials of four biosimilars that may someday modestly dent the price of Herceptin. … Meanwhile, clinical trials of cancer immunotherapies are short more than 100,000 patients."

    All this means, Bach and Trusheim contend, that "there are barely a dozen biosimilars on the U.S. market and no competitors on the horizon for dozens of biologic drugs." 

    "Thus it is time to throw in the towel on biosimilar," and instead turn to price regulation, Bach and Trusheim argue.

    For instance, Bach and Trusheim write that once a a biologic drug's exclusivity period ends the federal "government should regulate its price to provide a fair profit for its manufacturer." In exchange for the profit guarantee, the drugmaker "would be required to keep supplying the drug to the U.S. for that guaranteed profit or sell the business to a firm that will."

    Gottlieb's response

    In his own opinion piece in the Journal, Gottlieb refutes Bach and Trusheim's case to abandon biosimilars and proposes steps policymakers can take to help biosimilars get to market. Gottlieb is an investor in and director of drugmakers. In June, he joined the board of directors at Pfizer, which develops biosimilars.

    In the op-ed, Gottlieb warns that Bach and Trusheim's proposal "could trigger shortages of" biologics, and "would also discourage investment in manufacturing, as few drugmakers would want to produce complex drugs in perpetuity for little profit."

    Instead of Bach and Trusheim's price regulation proposal, Gottlieb argues that "Congress can make straightforward changes to speed the development and use of cost-saving biosimilars."

    For one, he writes, Congress "can pass a law mandating that brand companies sell their biologic drugs at a fair market price to biosimilar manufacturers." Currently, certain drugmakers prevent such sales, citing "fear[s] that the drugs might get resold in ways that can put patients at risk," Gottlieb writes. To address that concern, FDA can "guarantee[e] that custody of the drug remains secure," while "Congress could indemnify the brand drugmakers from any risks" related to the biosimilar trials.

    The next action Congress can take, according to Gottlieb, is to bar drugmakers from giving insurers rebates for biologic drugs. Under such agreements, "the drugmaker agrees to return part of a drug's purchase price to the insurance plan" and in return, the insurer "often agrees to make exclusive use of that drug."

    Finally, Gottlieb calls for the United States to "invest more heavily in educating doctors about the safety and effectiveness of biosimilars and the value that they can deliver to patients and the health care system." He notes that when "generic copies of small-molecule pills first entered the market in the 1980s, doctors were reluctant to prescribe them," citing "unfounded concerns." Doctors' and consumers' opinions changed, however, as they "gained familiarity with and confidence in generic drugs," Gottlieb states (Bach/Trusheim, Wall Street Journal, 8/21; Gottlieb, Wall Street Journal, 8/25; Pfizer release, 3/11; LaVitoa, CNBC, 6/27).

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