Global Biosimilars Market - PowerPoint

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					                           Second Annual Biotech Supply Chain Academy


                                   Keynote Address
          Regulatory Influences in
           Biogenerics-the Next
                 Horizon
                             Gillian R. Woollett, M.A., D.Phil.
                                                  Chief Scientist
                                      Engel & Novitt, LLP
                                       The Law Firm That Knows Its Science

                                    October 19, 2009, San Francisco, CA

                               The material and viewpoints set forth in this slide deck
                        and conveyed during this presentation are presented by the author
                              in her capacity as Chief Scientist of Engel & Novitt, LLP.
                  They do not represent and do not purport to represent the views of the law firm
                  or any current or former-client of the firm, and should not be construed as such.
ENGEL & NOVITT, LLP The Law Firm That Knows its Science                                               1
                                           OUTLINE
 The premise of competition when patents expire
 Biotech products and the biotech pipeline – a
      whole lot more are on the way…
     Minimal terminology for the biologics debate
     The current US regulatory framework
     Biologics - the need for them is global, but can
      they be made for a global market?
     Biologics business models and lessons from the EU
      biosimilars experience
     Current legislative efforts to create a new
      regulatory pathway
     Opportunities and Conclusions

ENGEL & NOVITT, LLP The Law Firm That Knows its Science   2
                 The Traditional Incentives for Innovation

  Incentives created by competition create new medicines & increase access

                                                 Patents Expire
Generics offer
 high quality drugs for
   established treatments
 affordable costs
and thereby free up                                                    Innovative drugs offer:
healthcare funds for new                         Net Progress          Improved treatment
innovative drugs                                   Radical New         Less side effects
                                                  Therapies and        New therapeutic options
                                                     Iterative         and thereby replace
                                                                       older/less effective
                                                  Improvements
                                                                       medications




                                                                  Obsolescence
ENGEL & NOVITT, LLP The Law Firm That Knows its Science                                          3
 The Context for ALL Biologics

The 200 year history of biologics is the basis for their future:
 Started with the very complicated – smallpox vaccine – and the
    decisions were empirical, and the studies “unethical”
 The biotech industry is much younger (first recombinant insulin
    1982), and the original biotech products were “biosimilars” -
    essentially biotech was a means of manufacturing previously
    approved naturally-sourced products. Now we can do way more
    as in Never-before-seen-in-nature products…
 FOBs are not just biosimilars, but also bioidenticals, second-
    generation products, biobetters, and bio-I-just-don’t-knows
 Biobetters can be clinically-better, but also perhaps safer, more
    stable, more reliably manufactured and cheaper, or all of the
    above



ENGEL & NOVITT, LLP The Law Firm That Knows its Science               4
          The Economic Issues for Biologics
                   Matter NOW
 Healthcare costs are high and increasing - all economies are under
    pressure, but access is life/death
 Individual biopharmaceuticals are more expensive than drugs on a
    per-patient basis, so prices have become conspicuous - attracting
    political and media attention.
 Medicines are a critical part of healthcare worldwide, but there is
    considerable price and product disparity, yet the companies and
    the patients are the same
 Biologics are, or are coming, off-patent
 Arguments for free-market pricing of drugs evoke an expectation
    of competition in the marketplace at the conclusion of patent
    terms
 The opportunities from multiple sponsors are increasingly apparent
    to all stakeholders; conversely their lack is a liability to biopharma
    and patients


ENGEL & NOVITT, LLP The Law Firm That Knows its Science                      5
 BIOTECHNOLOGY




ENGEL & NOVITT, LLP The Law Firm That Knows its Science   6
 Biotech Medicines in Development

                                          700
                                                                                                    Represents
  Number of Products in Clinical Trials




                                                                                   633
                                          600                                                       pipeline for
                                                                                                   future Brand
                                          500
                                                                             418                  products and
                                          400                     369 371                              then,
                                                                         324
                                                            284                                   subsequently,
                                          300
                                                                                                        for
                                          200         143                                           biosimilars
                                                 81
                                          100

                                           0
                                                1988 1993 1996 2000 2002 2004 2006 2008
ENGEL & NOVITT, LLP The Law Firm That Knows its Science                      Source: PhRMA Biotech Medicines in Development Surveys 7
                                                                                                   The
                                                                                              majority of
                                                                                               Medicines
                                                                                               in clinical
                                                                                                trials for
                                                                                              the US may
                                                                                                 now be
                                                                                                 biotech



ENGEL & NOVITT, LLP The Law Firm That Knows its Science   http://www.phrma.org/images/110308%20biotech%202008.pdf
                                                                                                                    8
   PhRMA Biotech Medicines in Development
                   2008




                                                                                           Total
                                                                                         Biotech
                                                                                      Medicines in
                                                                                      clinical trials
                                                                                       for the US
                                                                                           633




ENGEL & NOVITT, LLP The Law Firm That Knows its Science   http://www.phrma.org/images/110308%20biotech%202008.pdf
                                                                                                                    9
             Current US Regulatory Pathways


        STATUTE                                            APPLICATION
                                                                NEW DRUG
     U.S. FOOD DRUG                                         APPLICATION (NDA)
     & COSMETIC ACT                                         AND 505(B)(2) NDA
                                                             ABBREVIATED NDA
                                                          (ANDA) = GENERIC DRUG

       U.S PUBLIC                                          BIOLOGIC LICENSE
     HEALTH SERVICE                                        APPLICATION (BLA)
           ACT
                                                                  EXPEDITED
                                                                     BLA

Derived from a Presentation By Keith Webber, Deputy Director, OPS, FDA. 25Sep07 GWU “Biosimilar 2007”
ENGEL & NOVITT, LLP The Law Firm That Knows its Science                                            10
 Terminology has been distracting…

 Biologic – is a prophylactic, in vivo diagnostic, or therapeutic
    substance that is made in a living system, and that, generally,
    has a large and complex molecular structure
 Follow-on Biologic (FOB) – a subsequent version of a biologic,
    independently developed and approved, but that shares the same
    mechanism of action as a previously approved product (includes
    so-called EU Biosimilars, plus some second generation biologics)
 Second-generation biologic - subsequent versions of biologics that
    are independently developed and approved, share the same
    mechanism of action as a previously approved product but are
    explicitly different in some manner, e.g. inhaled. Sometimes called
    “evergreened”.
 Biogeneric, or Generic Biologic Drugs – should only be applied to
    ANDAs for biologic drugs approved by FD&C Act. ANDAs are
    interchangeable with their reference product



ENGEL & NOVITT, LLP The Law Firm That Knows its Science               11
 And please remember, while there may
 be a debate on naming…


            …THE NAME DOES
            NOT CHANGE THE
              CONTENTS OF
                THE TUBE

ENGEL & NOVITT, LLP The Law Firm That Knows its Science   12
 So how do you tell what is in the tube…


                                             …with

                                  DATA
  And hence the issue for any biologic sponsor is what data, to
  demonstrate what, and to whom, at what price to get what
  market…
  Answer: data to show safety, purity and potency or a
  relationship to a reference product (with known safety, purity
  and potency) at the structural, functional, and clinical levels
  to the regulators
ENGEL & NOVITT, LLP The Law Firm That Knows its Science             13
      Where are we with biosimilars today?

       Generally accepted that the science is sufficient for some/most
        biosimilars today
       Europe, Australia, Canada, Japan have biosimilars and
        competition is beginning
       No Enacted US legislation but bills in play (albeit drowned in
        the larger health care reform debate)
       Recognition of need for biologics competition in US as patents
        expire, but aggressive defense by some Brands
       Huge confusion on the role of reimbursement, and need for
        interchangeability to gain savings and access
       Health care reform an Administration priority, and biosimilars
        seen to have potential to increase access and save money
       Global issues


ENGEL & NOVITT, LLP The Law Firm That Knows its Science                   14
 The Biosimilars Story of Europe – a
 Timeline
 17Dec03 European Parliament “Future Medicines Legislation” (also
    called “Pharma Review Package”)
 31Mar04 Directive 2004/27/EC (also known as Directive
    2001/83/EC as amended) and Regulation 726/2004. Came into
    effect 20Nov05
 EMEA published general guidelines on biosimilars, as well as
    “class”-specific ones, but accepts and reviews applications
    concurrently
 Approvals: April 06 First biosimilar approval was Omnitrope
    (somatropin); August 07 First glycosylated protein approved as a
    biosimilar, Binocrit (Epoetin alfa); March 09 EMEA Guideline on
    LMWH – first for a naturally-sourced biosimilar
 EMEA meeting on Biosimilar Monoclonal Antibodies Jul09



ENGEL & NOVITT, LLP The Law Firm That Knows its Science                15
Selected Therapeutic Biologics by Product Class

                                     Average
                                     ~150Kd



               Average
                <50Kd
 European Biosimilars are based on well-
 established regulatory standards
 1996 US Guidance on Comparability for Manufacturing Changes for
    drugs and biologics developed by FDA and Pharma
 Early 2000’s ICH Q5E Comparability standards adopted by EU US
    and Japan – HIGHLY SIMILAR
 EU Biosimilars based on similarity and guidelines developed, but
    MEANWHILE biosimilars were developed and approved.
 No central EU regulatory designation of interchangeability, up to
    the health authorities in each country
 Review and approval not coupled to patents

 Innovator exclusivity 8+2+1 for all medicines (drugs and biologics
    are the same)




ENGEL & NOVITT, LLP The Law Firm That Knows its Science               17
         The Established Definition of Comparability
                       (EU, US, Japan)
           ICH HARMONISED TRIPARTITE GUIDELINE
   COMPARABILITY OF BIOTECHNOLOGICAL/BIOLOGICAL
         PRODUCTS SUBJECT TO CHANGES IN THEIR
                  MANUFACTURING PROCESS
                              Q5E
  COMPARABLE:
  A conclusion that products have highly similar quality
  attributes before and after manufacturing process
  changes and that no adverse impact on the safety or
  efficacy, including immunogenicity, of the drug product
  occurred. This conclusion can be based on an analysis of
  product quality attributes. In some cases, nonclinical or
  clinical data might contribute to the conclusion.
      Federal Register, Vol. 70, No. 125, June 30, 2005, pages 37861-37862

ENGEL & NOVITT, LLP The Law Firm That Knows its Science                      18
     The Comparability Exercise is fundamental to the
     Development of an EU Biosimilar Product
                               Clinical
                                               The comparability/similarity with the reference
 with reference product
 Confirm comparability




                           safety & efficacy
                                               product must be demonstrated at all levels of
                                PK/PD          product development:
                              Preclinical
                                                Analytical comparability - physicochemical
                               Biological                         ESTABLISHING SIMILARITY
                            characterization    Functional Comparability in assays, and
                           Physicochemical       shown by animal studies
                           characterization
                                                                   CONFIRMING SIMILARITY
                                                Clinical Comparability shown in Phase I and
                                                 III studies
 development
   Product




                          Complete product
                            and process
                            development        A biosimilar product is designed to meet the
                                               criteria of the reference product with regards to
                                               quality, safety and efficacy.
                                               This rigorous comparability exercise qualifies
 Define




                              Define and
 target




                             characterize      Biosimilars for therapeutic interchange
                          reference product
                                                           Derived from a Presentation By Ingrid Schwarzenberger, Sandoz
ENGEL & NOVITT, LLP The Law Firm That Knows its Science                                   23Sep08 GWU “Biosimilar 2008”    19
         Presented by Thomas Moore at Sanford
ENGEL & NOVITT, LLP The Law Firm That Knows its ScienceBernstein Biosimilars Conference, 3Dec09   20
 The Safety and Efficacy of EU Biosimilars

   Nicolas Rossignol, then Administrator of the EC’s
   pharmaceuticals on questions of safety for EU biosimilars:

       "I don't judge case by case, but I have a message:
       we have promoted and developed with the European
       Medicines Agency a special biosimilars framework.
       So we are confident that if a product meets all the
       requirements and gets a marketing authorisation
       from the commission, it means that the product is
       as safe and effective as any other product
       authorized by the commission"
   SCRIP World Pharmaceutical News 24 April 2008, reporting on EGA
   Meeting, London



ENGEL & NOVITT, LLP The Law Firm That Knows its Science              21
The EU Biosimilars approved to date
       EU Biosimilar                 INN            Reference Product           Auth./Pos. Op. Date
          Omnitrope               Somatropin              Genotropin                  12 April 2006
             (Sandoz)                                        (Pfizer)

           Valtropin                                      Humatrope                                                 With
                                  Somatropin                                          24 April 2006
          (Biopartners)                                      (Eli Lilly)                                         approval
            Binocrit              epoetin alfa            Eprex/Erypo                28 August 2007              sponsors
                                                                                                                    gain
             (Sandoz)                                     (Janssen-Cilag)

      Epoetin alfa Hexal                                  Eprex/Erypo
             (Hexal)
                                  epoetin alfa
                                                          (Janssen-Cilag)
                                                                                     28 August 2007              access in
          Abseamed                                        Eprex/Erypo                                              all 27
                                  epoetin alfa
                                                                                                                 countries
                                                                                     28 August 2007
            (Medice)                                      (Janssen-Cilag)

            Retacrit              epoetin zeta            Eprex/Erypo               18 December 2007            of the EU,
            (Hospira)                                     (Janssen-Cilag)
                                                                                                                    but
             Silapo
             (Stada)
                                  epoetin zeta            Eprex/Erypo
                                                          (Janssen-Cilag)
                                                                                    18 December 2007            reimburse
                                                                                  16 September 2008/
                                                                                                                   -ment
          Biograstim                                      Neupogen
      (CT Arzneimittel GmbH)
                                   filgrastim
                                                             (Amgen)              24 July & 21 Feb 2008          systems
    Filgrastim Ratiopharm                                 Neupogen                16 September 2008 /            still vary
                                   filgrastim
       (ratiopharm GmbH)                                     (Amgen)              24 July & 21 Feb 2008              by
         Ratiograstim              filgrastim             Neupogen                16 September 2008 /             country
       (ratiopharm GmbH)                                     (Amgen)              24 July & 21 Feb 2008

         Tevagrastim                                      Neupogen                16 September 2008/
                                   filgrastim
      (Teva Generics GmbH)                                   (Amgen)              24 July & 21 Feb 2008

             Zarzio                Filgrastim             Neupogen
                                                             (Amgen)        13 February 2009/20 November 2008
             (Sandoz)


       Filgrastim Hexal            filgrastim             Neupogen
                                                             (Amgen)        13 February 2009/20 November 2008
             (Hexal)
                                                                                                                        22
ENGEL & NOVITT, LLP The Law Firm That Knows its Science                                                                  22
                         FDA Precedents for Everything?
                Brand Name      Generic Name        Regulatory   Date of FDA     Sponsor       Reference product
                                                     Pathway      approval                      (sponsor, date of
                                                                                                original approval)
 Naturally-      Repronex        menotropins              ANDA   10-Jan-97       Lederle/    Pergonal (Serono, 1969)
  sourced                                                                         Ferring
 products
 Naturally-      Repronex        menotropins         505(b)(2)   27-Aug-99        Ferring    Pergonal (Serono, 1969)
  sourced
 products
                  Vitrase       hyaluronidase        505(b)(2)    5-May-04     Ista Pharms    Wydase (Baxter, 22-
                                                                                                  Mar-1950 )
                Amphadase       hyaluronidase        505(b)(2)   26-Oct-04      Amphastar     Wydase (Baxter, 22-
                                                                                                   Mar-50 )
                  Hydase        hyaluronidase        505(b)(2)   25-Oct-05     Primapharm     Wydase (Baxter, 22-
                                                                                                   Mar-50 )
Recombinant      Glucagen           glucagon         505(b)(2)   22-Jun-98     Novo Nordisk Glucagon (Lilly, 14-Nov-
  products                       hydrochloride                                                       60)
                                 recombinant
                  Fortical     calcitonin salmon     505(b)(2)   12-Aug-05     Upsher Smith Miacalcin (Novartis, 17-
                                 recombinant                                                        Aug-95)

                  Hylenex       hyaluronidase        505(b)(2)    2-Dec-05      Halozyme       Wydase (Baxter, 22-
                                recombinant                                                        Mar-50 )
                                   human
                Omnitrope        somatropin          505(b)(2)   30-May-06       Sandoz/     Genotropin (Pharmacia
                                                                                 Novartis    and Upjohn, 24-Aug-95)
ENGEL & NOVITT, LLP The Law Firm That Knows its Science                                                          23
 But, for all biologics suppliers…

 Regulatory requirements have increased as the collective ability to
    do “more science” has increased - sameness has become pursuing
    everything with every technique every time to show the absence
    of a difference…
 Reference standards are not routinely available. No API
    commercial model for biologics
 Comparability has become increasingly difficult, even for
    innovators with their own products, e.g. when getting new facilities
    on line, resulting in shortages. This drives pressures for more
    suppliers. Quality matters.
 Alternative sources/products are needed, and also incented by the
    expanding markets (range of products, and more patients needing
    access), and manufacturing can be more efficient…
 Products in one market drive demands in others – global needs


ENGEL & NOVITT, LLP The Law Firm That Knows its Science                24
Innovator comparability complicates the
story

   AVONEX (Interferon Beta 1A) approved in 1996 based on
      comparability and without clinical studies on final material
   MYOZYME (alglucosidase alfa) for the treatment of late onset
      Pompe disease. FDA decides material made at different scales are
      different products (Oct08)
   CEREZYME (Imiglucerase) manufacturing shortages due to viral
      contamination such that different products subject to expanded
      access studies (Protalix – Glucocerebrosidase) or switching
      (Zavesca - miglustat)
  FDA authority to use comparability is clear, but their caution
  continues to be evident. Hence, it has become a very high
  regulatory standard, and innovators inability to achieve it for their
  own products suggest that biosimilars sponsors will have challenges
  too.

ENGEL & NOVITT, LLP The Law Firm That Knows its Science                25
 Biosimilars can enable Regulatory
 Progress for all Biologics
 The PHS Act (1903) requires a demonstration of safety, purity and
    potency. New legislation can enable, not impede, the
    accommodation of scientific progress into the regulatory
    framework – a win:win for all sponsors.
 The goal of regulations for ANY biologic should be only to require
    actionable data, i.e. ONLY, but ALL, necessary data on which to
    make appropriate decisions. Regulations need to evolve with the
    science if innovator products are to be licensed, and the promise of
    biotech fulfilled.
 Biosimilars are self-evidently possible, and FDA needs to the
    authority to evaluate them and when appropriate designate them
    as interchangeable. Only FDA will see the data and the licensure
    has to be data-driven.
 The FDA already has a >12 year old “sameness standard” for
    biologics and drugs called comparability
ENGEL & NOVITT, LLP The Law Firm That Knows its Science                26
Progress in science and regulations is a
continuum…          …and should be global

                        Bio-manufacturing-                               Progress in ALL or
                             technology                                  ANY give greater
                        •Process Analytical                              certainty to the
                         Technology
                        •MOA                                             development of:
                        •Quality by Design
                                                     Pre-clinical
      Analytics                                     •Better disease      • First generation
    •Improved                                        models                biologics
     technology                                     •Comparative
    •Orthogonal                                      immungenicity       • Follow-on
                                Clinical
     methods &              •Critical Path          •Better predictive     biologics
     data                                            safety models
     integration            •Adaptive clinical
                             trials design                               • Including second
                            •Post-marketing                                generation
                             studies
                            •More predictable
                             outcomes
                            •Validation of                Note: Biologic can be manufactured
                             biomarkers as                using biotechnology, synthetic
                             surrogate                    chemistry or using natural sources;
                             endpoints
                                                          some have been made with all three
ENGEL & NOVITT, LLP The Law Firm That Knows its Science                                         27
So why are we having these discussions
about biosimilars, and why now?
 BIOTECH IS A STORY OF SUCCESS Innovator biologics work
    and patents are expiring. Consumers want more of them, both as
    innovator products, and as cheaper versions of old products.
    Access matters and is an unmet medical need.
 ECONOMIC PRESSURES ARE ADDING TO THE NEED FOR A
    SOLUTION ASAP Patents ending are visible, as are EU successes
    with biosimilars, but cost is the biggest issue by far (both
    individual and collective).
 WE NEED COMPETITION FOR BIOLOGICS, AS WELL AS
    DRUGS A lot can be learnt from the successes and failures of
    generic drugs, but we need a process to be appropriate for
    biologics. That requires legislation and the details will determine
    the savings.
 THE ISSUES ARE GLOBAL


ENGEL & NOVITT, LLP The Law Firm That Knows its Science                   28
  Patient access to Rx depends on market
               access for Rx
                           GLOBAL                          REGIONAL/NATIONAL
                                                          Healthcare systems vary
                         ACCESS                            (affects reimbursements
               Patients are everywhere                    and ROI, 1y & 2y markets)
                (albeit Dx and healthcare
                   infrastructure vary)
                                                          IP varies, and getting a
                                    Market access is
                                                     little better harmonized,
                                     determined by but barely (certain global
                                  regulatory approval, free-trade norms are
               Companies develop and
                                   market viability by emerging but limited)
                  manufacture for the
                                     reimbursement
               leading markets, ideally
                    global standards
                                COMPETITION REQUIRES
               (inconsistent requirements            Regulations are regional
                                   MARKET ACCESS &           with some
                 lead to requirements for
                                  FREEDOM TO PRICE harmonization for
                     different products)
                                                            drugs, and innovator
                                                          biologics (cost of getting
                                                          to market less if can use a
                                                               single data set)


ENGEL & NOVITT, LLP The Law Firm That Knows its Science                                 29
  BIOLOGICS/SIMILARS – the need for them is
  global, but can they be made for a global market?


           Europe                                  US                      Brazil
          Pathway in                           Legislative                 0.19
            place                                debate                                  Largely
           THE LEADER
                                                                          Russia
                                                  0.31                                 Supporting
              0.50                                                         0.14
                        ICH plus others                                                   WHO
                          (1st World)                                      India        Guideline
                                                          Canada            1.14        Initiative
                             Japan
                            Guidance                    Guidance
                                                                          China
                              Final                        Final
                                                                           1.13
                              0.13                           0.03
                                                  Australia
                                                                              BRIC plus others
                                                  Using EU
                                                                                (2nd World)
   WHO                                            approach
                                                    0.02
   Biosimilar Guidelines
   near final
                                                ROW (Largely 3rd World)
                            Largely lack health care infrastructure for complex biologics
World Population               WHO less relevant, but will recognize those standards
Total 6.7
ENGEL & NOVITT, LLP The Law Firm That Knows its Science                                              30
Top Approved and Marketed Biologics




ENGEL & NOVITT, LLP The Law Firm That Knows its Science   http://www.ftc.gov/bc/workshops/hcbio/docs/fob/rgal.pdf
                                                                                                                    31
          Current US Regulatory Pathways


        STATUTE                                            APPLICATION
                                                                NEW DRUG
     U.S. FOOD DRUG                                         APPLICATION (NDA)
     & COSMETIC ACT                                         AND 505(B)(2) NDA
                                                             ABBREVIATED NDA
                                                          (ANDA) = GENERIC DRUG

       U.S PUBLIC                                          BIOLOGIC LICENSE
     HEALTH SERVICE                                        APPLICATION (BLA)
           ACT
                                                                  EXPEDITED
                                                                     BLA

Derived from a Presentation By Keith Webber, Deputy Director, OPS, FDA. 25Sep07 GWU “Biosimilar 2007”
ENGEL & NOVITT, LLP The Law Firm That Knows its Science                                            32
 Licensure of Biologics in the US today:
   The only pathway is the “Full BLA”


      Raw                                                                            Product C
                                              Process B
    Material A


As long as A and B stay the same,                 C       can be sold without more clinical trials




      Raw                                                                           Product C’
                                              Process B’
    Material A’




   C’     can be made and licensed today.




ENGEL & NOVITT, LLP The Law Firm That Knows its Science                                              33
Interchangeability versus Substitutability

  SMALL MOLECULE DRUGS                                              BIOLOGICS
   Responsibility of regulators (EMEA                     Responsibility of regulators
    or FDA)                                                (EMEA or FDA)

   Interchangeability = Therapeutic                       Interchangeability =
     Equivalence (based on                                  Comparability (based on
     Pharmaceutical equivalence plus                        highly similar at structural,
     Bioequivalence)                                        functional, and clinical levels)



  Responsibility of health authorities                    Responsibility of health
  (Countries or States)                                   authorities (Countries or States)

    Substitutability                 Substitutability
          DO PAYORS NEED THE SUBSTITUTABILITY MODEL OF
                GENERIC DRUGS TO GET REAL SAVINGS?
ENGEL & NOVITT, LLP The Law Firm That Knows its Science                                        34
 The US is falling behind…

 European biosimilars are succeeding – 13 marketing
  authorizations, increasing visibility and no evidence of
  quality, safety or efficacy problems
 The US is the largest biotech market – patents are expiring;
  the science is universal; 8 FD&C Act follow-ons to biologic
  drugs have been approved as 505(b)(2)s, one ANDA and
  two in the wings
 Economic pressures have increased as biotech products
  have succeeded – free-market pricing for Rx in the US
  cannot expect to continue without competition becoming
  evident in the biologics market
 Health care reform in the works – maybe. Biosimilars bills
  are included in both US Senate and US House



ENGEL & NOVITT, LLP The Law Firm That Knows its Science          35
     Biologics Patent Expiration Estimates
Highlights important of availability of US pathway from date of
enactment



                     Now
 Summary of Estimated Biosimilars Savings

  Source
              Entire US Population             Entire US population,      Medicare Part B                Entire U.S. Population
                                               but reported Federal       beneficiaries
Population                                     Government savings

              Rolling 10-year period           2008-2017, with no         “next ten years” beginning     “over the next 10 to 20
 Timeline                                      savings 2007-2012          with pathway available in      years”
                                                                          2007
              Erythropoietin, Interferons      Non-specific therapies.    All PHS Act regulated          Generic versions of the top
 Therapies    for Multiple Sclerosis,          (Erythropoietin            biologics within the top 200   12 categories of biologic
 Evaluated    Growth Hormone for growth
              deficiency, Insulin for
                                               excluded almost
                                               entirely due to timeline
                                                                          HCPCs that are currently
                                                                          reimbursed by Medicare
                                                                                                         treatments with patent
                                                                                                         protections that have
              diabetes                         and gradual market         Part B                         expired or are due to expire
                                               movement)                                                 in the near future

              Product specific analysis to     Assumes 10% of             Assumes only a single          Assumes that a biogeneric
Assumptions   calculate movable market         biologic spend goes off    competitor to each             pathway is approved in
              share. Substitution rates of     patent per year. Market    already-approved biologic      2008 and those products
              83.4% (directly substitutable)   penetration reaches        when it goes off patent (and   already off patent could be
              and 49% (therapeutically         60% over 3-year period.    that all patents are valid);   approved by 2010.
              substitutable). 25% discount     Large revenue products     that the savings will begin    Assumes rapid introduction
              on biogeneric products.          reach discounts of 30%,    at 15% rising to 30% over      of biogenerics following
                                               medium revenue             10 years                       patent expirations of
                                               products achieve 10%                                      original products. Price
                                               discount.                                                 discount of 25-35% over a
                                                                                                         10 and 20 yr period.
              $71 Billion savings              Federal Government         Medicare Part B can save       $67 billion to $108 billion
Conclusion    opportunity in ten years         can save $3.6 Billion      $14 Billion over next 10       over first 10 yrs and $236
              following approval of generic    over ten years             years.                         billion to $378 billion over
              biotech products.                                                                          20 yrs
 Government Projections for Biosimilars Savings

 Source                CBO-1                                   CBO-2                               OMB                       CBO-3
             Entire US Population, but            Entire US population, but reported         Entire US Population,     Entire US Population, but
             reported Federal Government          Federal Government savings with and        but reported Federal      reported Federal
Population   savings                              without Medicare Coding Reform             Government savings        Government savings (CBO
                                                                                                                       Score of Pres. Budget)

             10-year period (2009-2018)           10-year period (2010-2019)                 10-year period (2010-     10-year period (2010-19)
 Timeline                                                                                    19)
             Non-specific therapies. Subset of    Non-specific therapies. Subset of          None identified.          None identified.
Therapies    biologics, that make up roughly      biologics, that make up roughly three-
Evaluated    three-quarters of the current        quarters of the current market, that
             market, that might face              might face competition by Follow-On
             competition by Follow-On             Biologics over the next 10 years
             Biologics over the next 10 years
             Assumes S.1695 will be enacted       Same assumptions as CBO-1 but with         Assumes a period of       Assumes a period of
Assumption   near start FY 2009 & for             the additional assumption that             innovator exclusivity     innovator exclusivity
             interchangeability with 1 yr of      Medicare Part B would be modified to       “generally consistent     “generally consistent with”
             market exclusivity to the 1st        place the follow-on biologic in the same   with” Hatch-Waxman        Hatch-Waxman and that
             interchangeable FOB, 12 yrs of       billing code as the reference product.     and that brands would     brands would be
             exclusivity to the innovator, and                                               be prohibited from        prohibited from
             accounts for the possibility of                                                 “evergreening”.           “evergreening”.
             “evergreening”. Assumes 35%
             market share for FOB and price
             discount of 40 % by 4th year of
             competition.
             Federal Government would save        With no coding reform the total savings    Federal Government        Federal Government can
Conclusion   $6.6 Billion over 10 years. Figure   to Federal Government on Medicare          can save $9.24 Billion    save $13 Billion over 10
             includes revenue changes.            and Medicaid would be $9.2 Billion;        over 10 years. It is      years. Figure includes
                                                  with the modification savings would        unclear whether this      changes in revenue.
                                                  total $12 Billion over 10 years. Figures   figure includes revenue
                                                  include revenue changes.                   changes.
 The Payor Role in the utilization of
 biosimilars is not yet clear
 An FDA designation of interchangeability can give options for
    automatic substitution with the reference product – the “Generic
    Drug Model”
 The absence of an interchangeability designation may give greater
    or fewer choices for payors, and this will depend on the
    reimbursement infrastructure. Options may include:
     – Co-pays incentives for patients (tiering)
     – Prior authorization for physicians
     – Step Therapy and/or switching (happens between payors, but
        less likely within)
 De Facto therapeutic substitution may give the greatest potential
    for savings to payors and patients
 The role of Government payors will be very influential



ENGEL & NOVITT, LLP The Law Firm That Knows its Science                39
   MedPAC recommendations to Congress
              (June2009)
 Absent a free-market solution, alternative approaches will be
    considered, and they may be difficult for biopharma.
 MedPAC examined three strategies to pay for biologics under Parts
    B and D that “by considering information about a drug’s clinical
    effectiveness, have the potential to improved the value of Medicare
    spending on drugs”:
       Reference Pricing: Set a drug’s payment rate no higher than
          the cost of currently available treatments unless evidence
          shows the drug improves beneficiaries outcomes
       Payment for results: Link a drug’s payment to beneficiaries
          outcome through risk-sharing agreements with manufacturers
       Bundling: Create payment bundles for groups of clinically
          associated products and services
 Thus it would appear to be in biopharma’s interest to find a fair
    and sustainable solution.
ENGEL & NOVITT, LLP The Law Firm That Knows its Science                40
So what could legislation for the US
include in order to increase competition…
 Delegate authority to FDA to approve biologics that reference a
    previously approved PHS Act biologic (data will always be product
    specific, and sponsor must show safety, purity and potency). To
    maximize competition pathway must be:
     – Immediately available
     – Apply consistent regulatory standards
     – Allow for an interchangeability designations
     – Flexible enough to absorb scientific developments
    The PHS Act is a paragraph, and works for innovator products, the
    ones we know the least about at time of initial approval -
    something equally simple will do for biosimilars
 Respect IP rights of innovators and biosimilar sponsors, plus a fair
    exclusivity incentive for innovator products.
 Support global consistency in regulatory requirements, such that a
    global market access to biosimilars is possible too
ENGEL & NOVITT, LLP The Law Firm That Knows its Science                  41
      US Legislation - Overview
• Two Biosimilar Bills are in currently in play in 111th Congress:
    • House Energy & Commerce Committee adopted “Licensure
      Pathway for Biosimilar Biological Products”
    • Senate H.E.L.P. Committee adopted “Biologics Price
      Competition and Innovation Act of 2009”
• Both now part of Health Care Reform and to a great extent
  dependent on how that develops over the next few months
• Neither have gone to the floor of their respective houses, and
  amendments are expected.
• The disparate elements in the two bill will need to be reconciled at
  Conference:
    • Regulatory Pathways– same
    • Exclusivity – similar
    • Patent provisions – different
• Even if overall health care reform fails, biosimilars legislation may
  become a “lifeboat”
ENGEL & NOVITT, LLP The Law Firm That Knows its Science                   42
      Senate Biosimilars Bill

  •     Two-Step regulatory pathway based on “highly similar”
        standard (identical to House)
          • Biosimilars - analytics, preclinical, clinical (any of which
            can be waived by FDA), extrapolation between indications;
          • plus switching studies for interchangeability designation
  •     No blocking guidances or regulations as part of pathway
  •     REMS required
  •     Same generic name (INN) possible
  •     12 year innovator exclusivity (and 180 notification prior to
        marketing biosimilar); 1 year for first interchangeable
        biosimilar
  •     Complex compulsory patent exchange provisions which put
        patents at risk early, amends Title 35
  •     No requirement for regulations to be promulgated

ENGEL & NOVITT, LLP The Law Firm That Knows its Science                    43
      House Biosimilars Bill

 •     Two-Step regulatory pathway based on “highly similar” standard
       (identical to Senate)
         • Biosimilars - analytics, preclinical, clinical (any of which can
           be waived by FDA), extrapolation between indications;
         • plus switching studies for interchangeability designation
 •     No blocking guidances or regulations as part of pathway
 •      REMS required
 •     Requires unique name, but same generic name (INN) possible
 •     12 year innovator exclusivity, plus possibility of 6 month
       pediatric extension; 1 year for first interchangeable biosimilar
 •     Complex compulsory patent exchange provisions which put
       patents at risk early, new regulations required, does not amend
       Title 35



ENGEL & NOVITT, LLP The Law Firm That Knows its Science                   44
    FDA Implementation - Expectations
•     Will depend on the details in the final legislation
•     Hope/expect:
      • Pathway implemented immediately (products already in
          queue - Woodcock testimony Mar07)
      • FDA adequately resourced through user fees
      • No requirement for new FDA regulations for pathway to be
          available
      • Guidances will be developed, as in Europe, concurrently with
          the biosimilars being reviewed and approved
•     Patent litigation could continue as today for biotech, i.e.
      independently of FDA review and approval, but current
      proposals have it linked such that FDA completes it review, but
      waits for the outcome of litigation before issuing the biosimilar
      license. As such patents are at risk early. However, no Orange
      Book for biologics.
•     Full BLAs, including for second generation products, continue
      with patent litigation as today – unencumbered

ENGEL & NOVITT, LLP The Law Firm That Knows its Science                   45
 Fundamental questions for any biologic
 sponsor - what data, what label, what market?

 Are the regulatory standards for all biologics to be
    consistent, namely safety, purity and potency, and are
    separate products evaluatable using comparability (ICH,
    basis for EU & WHO)?
 Are regulatory authorities to be allowed to designate a FOB
    and its reference as interchangeable or will payors decide
    individually, absent data and according to their own rules?
 Is the US to get a new pathway – what is it and when is it
    usable? Is FDA approval to be linked to the patent system?
 Is competition in the market going to occur, and be seen to
    occur? Or is “sameness” going to be a barrier…
 Are the rules enabling access to FOBs going to be consistent
    globally?
ENGEL & NOVITT, LLP The Law Firm That Knows its Science           46
Second-generation products, biobetters,
and bio-I-just-don’t-knows
 If it costs more to be biosimilar than to do a “full BLA”, why not be
    better but use the advantages of:
     – An RLD that has already defined the market value
     – Lower failure rate as have a model product
     – Studies can be focused, and manufacturing efficient
     – Tweaks can be market-based too, e.g. devices, stability
     – Not constrained by reverse engineering limitations
     – Get your own 12 year exclusivity
 Avoids innovator exclusivity should it be granted in US legislation
    (albeit patents still apply – same as today)
 We all learn from prior knowledge, so biobetter can be just not-
    shown-to-be-the-same
 Biobetters can be developed for a global market


ENGEL & NOVITT, LLP The Law Firm That Knows its Science                 47
 Opportunities and Conclusions
 We can learn from generic drugs, but we do not repeat the
    mistakes – no need to reinvent the patent morass
   All stakeholders understanding their own interests, and engaging
    to generate an expedited pathway to enable/increase competition
    and access will be a collective win:win. Poles are not helpful.
   Quality will always matter, especially in the Post-Eprex and Post-
    Vioxx world, and that affects the whole supply chain
   Realistic expectations of biologics, as well as drugs, such that the
    new products can reach patients and drive the upward cycle of
    innovation, access and health matters. That means new biologic
    approvals too
   Global consistency in regulatory requirements key – lessons from
    Europe and beyond are useful
   Reimbursement models must recognize biosimilars in a manner
    that fosters legitimate competition, not therapeutic substitution
   Result can be creation of a regulatory pathway for FOBs in the US,
    that enables competition in the biologics market when patents
    expire
ENGEL & NOVITT, LLP The Law Firm That Knows its Science                48
                                       Thank You!
                         Gillian R. Woollett, M.A., D.Phil.
                                                 Chief scientist
                                       Engel & Novitt, LLP
                                        The Law Firm That Knows Its Science


                                       www.engelnovitt.com
                                           202.207.3307
                                     gwoollett@engelnovitt.com
                               The material and viewpoints set forth in this slide deck
                        and conveyed during this presentation are presented by the author
                              in her capacity as Chief Scientist of Engel & Novitt, LLP.
                  They do not represent and do not purport to represent the views of the law firm
                  or any current or former-client of the firm, and should not be construed as such.

ENGEL & NOVITT, LLP The Law Firm That Knows its Science                                               49

				
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