When do biosimilars launch at risk?
The biosimilar statute, Biologics Price Competition and Innovation Act (BPCIA), was passed in 2010. Since then, drug companies have been filing biosimilar applications with FDA. And even though FDA has approved only nine biosimilar drugs to date, an interesting trend may be emerging: biosimilars may be more willing to launch at-risk than small-molecule generics.
The FDA-approved biosimilars include: (1) Zarxio® (Neupogen®); (2) Inflectra® (Remicade®); (3) Erelzi® (Enbrel®); (4) Amjevita® (Humira®); (5) Renflexis® (Remicade®); (6) Cyltezo® (Humira®); (7) Mvasi® (Avastin®); (8) Ogivri® (Herceptin®); (9) Ixifi® (Remicade®).
Which biosimilars have launched at risk?
Three biosimilars have launched at risk. Sandoz launched Zarxio® in September 2015, even though its district court patent litigation with Amgen was far from over at the time. Indeed, as late as December 2017, Sandoz prevailed on summary judgment of non-infringement of the only remaining patent in the case. The case is likely to be appealed by Amgen, thus perpetuating Sandoz’s at-risk launch of Zarxio® for at least another year.
Pfizer’s Inflectra®, the biosimilar for Janssen’s Remicade®, was approved by FDA in April 2016. Litigation over the biosimilar remained pending before the Federal Circuit in late 2016 when Hospira and Celltrion launched Inflectra®.
Merck launched Renflexis® at-risk, which is also a biosimilar for Remicade®. The biosimilar was approved by FDA in April 2017, and Merck launched nearly immediately in July 2017. At the time of its launch, Merck’s Renflexis® partner, Samsung Bioepis, was involved in BPCIA patent litigation with Janssen (J&J). Janssen dropped the lawsuit shortly after the launch, in November 2017.
Which biosimilars have not launched at risk?
Interestingly, Sandoz is not launching both of its biosimilars at risk. Sandoz’s other approved biosimilar, Erelzi® (Enbrel®), received approval in August 2017, but Sandoz has told the market that it will not launch pending its legal battle with Amgen, which is expected to stretch well into 2018. The case is scheduled to go to trial in April 2018, and Sandoz has told the Court that it will not launch at least before that trial concludes.
Amgen itself did not launch at-risk for its Amjevita®, its biosimilar for Humira®. Amgen’s biosimilar was approved by FDA in September 2016. AbbVie commenced suit against Amgen shortly before that, and the parties settled the case in September 2017. That settlement provides for Amgen’s entry in early 2023.
In addition to Inflectra®, Pfizer has Ixifi®, which is another biosimilar for Remicade®. Pfizer developed Ixifi® in-house before acquiring Hospira and its biosimilar Inflectra®. Pfizer has stated that though Ixifi® was approved in December 2017, it has no plans to currently launch its second biosimilar for Remicade®.
Boehringer-Ingelheim’s Cyltezo® was approved by FDA as a biosimilar for AbbVie’s Humira® in August 2016. AbbVie has commenced a BPCIA patent suit against Boehringer, which remains pending. To date, the biosimilar has not been launched.
Amgen’s Mvasi® was approved by FDA as a biosimilar for Genentech’s Avastin® in September 2017. The parties remains embroiled in patent litigation commenced in late 2017.
Mylan’s Ogivri® was approved by FDA as a biosimilar for Roche’s Herceptin® in December 2017. Mylan appears to have already reached a licensing and settlement with Roche regarding the launch of Ogivri®, but the date is not currently publicly-disclosed.
So why are biosimilars launching at-risk?
The first answer is that launching at-risk for biosimilars may not be as risky as it is for small molecule generics. The potential liability faced for launching a biosimilar at risk is typically less. Small-molecule generics are not typically presumed to launch at risk. In 2015, after Apotex launched its Prilosec generic at risk, it was hit with damages based off a 50% royalty rate. Yet, biosimilars are typically offered at a smaller discount to the brand name list price compared to steeper discounts offered for small-molecule generics. That means, a biosimilar’s potential liability for launching at risk may be equivalent to its profits. By contrast, for a small-molecule drug, which can be upwards of 60% discount to the brand list price, the generic’s liability will be measured against the brand’s lost profits, and that liability can potentially eclipse any profits earned by the generic for launching at risk.
That said, discounts are not set in stone. We are still in the early days of biosimilars, and it is still relatively rare for a biologic to face biosimilar competition from more than one company. Remicade®, however, shows that when multiple biosimilars exist for a single drug, discounts may grow steeper. Pfizer launched Inflectra® at a 15% discount, but was then subsequently beat by Merck’s Renflexi®, sold at a 35% discount off the list price for Remicade®. In the future, launching at-risk may depend more on the number of biosimilar competitors.
Another trend suggests that it depends on the patents and the nuances of the BPCIA. For instance, closer look at Merck’s Renflexis® shows that its “at risk” launch was not that risky from a liability perspective. Technically, the drug was launched while patent litigation was pending against Merck’s partner (Samsung Bioepis). Yet, after its aBLA for Renflexis® was accepted by FDA, Samsung refused to engage in the patent dance. That meant that Janssen essentially had to sue for patent infringement blind, without the benefit of seeing Samsung’s aBLA or manufacturing process to know which patents are infringed. After those materials were disclosed in discovery, Janssen apparently conceded that no patent infringement existed, and it dropped the case.
Another factor may be the number and nature of asserted patents. Fewer patents means that it may be easier for the biosimilar to assess the likelihood of prevailing in the patent lawsuit. Sandoz launched Zarxio® at risk, but there were only two patents asserted against the drug. Similarly, a number of patents were asserted against Pfizer’s Inflectra®, but the case appears to have boiled down to one patent, the ‘471 patent, which expires in September 2018. By contrast, Amgen did not launch its Humira® biosimilar at risk. Even though only 10 patents were asserted in the patent lawsuit, AbbVie was not shy that it had an arsenal of 60 plus more patents that it was itching to assert when it had the opportunity. The incredibly high sales of Humira® may have also been a factor. Indeed, had Amgen launched at-risk before the parties settled, it is questionable a settlement would have been reached, and less likely that the entry date would have been the same. That may suggest another, perhaps obvious factor. A biosimilar that refrains from launching at risk is an indirect signal that the likelihood of a settlement is higher.
To date, with only nine approved biosimilar drugs, the data is sparse for identifying strong trends. But FDA approved 5 biosimilars in 2017, and more are in the pipeline, thus yielding more data to see how the burgeoning biosimilar market takes shape.