As if the FDA doesn’t have enough on its hands with COVID-19, Monday is deeming day.

That’s the day nearly 100 drugs approved via new drug applications (NDAs) are to be deemed biologics, courtesy of the 2010 Biologic Price Competition and Innovation Act (BPCIA).

The FDA has been preparing for the day for a while now, issuing a list of the drugs that will be deemed biologics, publishing guidance and rules on how it plans to regulate the NDAs-turned-biologics and working quietly behind the scenes with sponsors hoping to develop biosimilar, and perhaps interchangeable, versions of at least a few of the deemed products.

Ten years in the making, deeming day is more than transferring the small proteins from the FDA’s Orange Book of NDAs to its Purple Book listing of approved biologic license applications (BLAs). The day is expected to open the door to interchangeability, a new level of biologic competition.

Unlike the Part B biologics referenced by all the currently approved biosimilars, many of the to-be-deemed BLAs are Part D prescription drugs that are picked up at the pharmacy. That means competitors for the first time may try out the BPCIA’s unique pathway that allows follow-ons approved as interchangeables to be automatically substituted for the prescribed reference drug at the pharmacy.

Going for interchangeability will require the added expense of switching trials, but that cost could be more than offset by the marketing costs of having to build a brand for a biosimilar, which, whether it references a Part B or D drug, must be prescribed by name.

The first deemed drugs expected to face a generic-like interchangeable are insulin products, which have become the poster child for high drug prices. “This transition will open new pathways for manufacturers to bring biosimilar and interchangeable versions of insulin and other transitioning products to market, facilitating greater competition in the marketplace," FDA Commissioner Stephen Hahn said last month when the agency issued a final rule and two frequently-asked-questions documents about the transition.

"These critical therapies often carry a heavy price tag. … Opening these products to increased competition is expected to bring down prices and help patients have access to more choices for these life-saving drugs,” Hahn continued.

According to the FDA's Janet Woodcock, there’s already a robust pipeline and a lot of interest in developing insulin biosimilars. While the FDA can’t disclose which companies it’s working with or which insulin products they’re targeting, some companies may disclose their insulin biosimilar pipelines next week when they can finally file a BLA for their follow-ons.

Tempting targets

Not all insulin products may be tempting targets for biosimilars. So far, all the approved biosimilars in the U.S. have aimed at blockbuster biologics. But they’re not just any blockbuster. Nearly all the referenced biologics have had peak sales of at least $6 billion.

The possibility of being approved as an interchangeable could change that dynamic for insulin follow-ons in the U.S. market, as they could compete more like a generic against both established innovators and branded competitors. The increased ease of grabbing market share would make it more viable to go after smaller blockbusters and not-quite blockbusters.

A number of insulin products have been billion-dollar sellers, but only one – Sanofi SA’s Lantus (insulin glargine) – scored above the $6 billion mark. According to Cortellis, Lantus peaked at more than $8.4 billion in sales in 2014, the year Eli Lilly and Co.’s Basaglar was approved as an insulin glargine biosimilar in Europe. Since the U.S. biosimilar path wasn’t open to insulin and other small proteins, Basaglar was approved in the U.S. in 2015 as a 505(b)(2) drug.

Last year, Basaglar became a blockbuster in its own right, logging $1.11 billion in total sales. Nearly 79% of those sales – $876 million – were in the U.S., where sales increased 41% over 2018, according to Lilly’s 2019 annual report.

Consequently, a Lantus biosimilar would not only have to compete name-to-name with the reference drug, which pulled in $3.38 billion in sales last year, but also with Basaglar. Going the interchangeable route could level the playing field.

Although it didn’t surpass $6 billion, Novo Nordisk A/S’ Novolog (insulin aspart) also could be an enticing target for either a biosimilar or interchangeable. Its sales peaked in 2014 at $4.87 billion, but it still had more than $4 billion in sales last year.

Other insulin blockbusters that could attract competition, especially from interchangeables, include Lilly’s Humalog (insulin lispro), which peaked in 2018 at nearly $3 billion; Novo Nordisk’s Levemir (detemir), with top sales of $2.72 billion in 2015; Lilly’s Humulin (insulin human); and Novo Nordisk’s Tresiba (insulin degludec). Humulin peaked at $1.4 billion in 2014, and Tresiba, which was approved in 2015, had sales of nearly $1.4 billion last year but has yet to peak.

Bumpy path?

While price-conscious policymakers are eagerly awaiting the arrival of interchangeables and the price savings they’re expected to deliver, it might not be a smooth trip to market for the first interchangeables of a deemed product, as the path will probably be filled with legal challenges and questions – much as the biosimilar path has been.

Part of the problem is that the FDA has yet to spell out the details of naming and labeling interchangeables. Other unknowns loom as well. One is how pharmacy benefit managers (PBMs) will respond to interchangeables, Sheila Frame, vice president of marketing, market access and patient services at Sandoz Inc., told BioWorld.

As the keepers of the drug formularies for insurance plans, PBMs and payers benefit from the rebates drug companies pay for preferred formulary placement. Because of those rebates, a drug with a higher list price can be a better deal for the PBM than a biosimilar with a somewhat discounted price but a smaller rebate. In the generic world where prices are heavily discounted from the brand, rebates are not generally an issue. Whether that will hold true for interchangeables remains to be seen.

The advent of interchangeables also could hurt market adoption of biosimilars, William Yoon, head of U.S. external engagement and medical advocacy at Sandoz, warned. “The very creation of interchangeability has led to a biosimilar barrier in the U.S.,” he told BioWorld, adding that the two different approvals create the sense that interchangeables meet a higher standard than biosimilars.

In reality, there is no scientific difference, Yoon said.

Frame noted that as the FDA and industry head into the next round of biosimilar user fee negotiations, industry likely will suggest that interchangeability be up for discussion.

Another challenge that could arise is unique to the deemed drugs, whether they’re facing new BLA, biosimilar or interchangeable competition. In transitioning the NDAs to BLAs, the FDA is stripping them of unexpired exclusivities that are specific to NDAs. However, they will not be granted any portion of the 12-year BLA exclusivity, even if they’re relatively new to the market. Consequently, Sanofi’s Soliqua (insulin glargine/lixisenatide), which was approved in 2016, stands to lose more than a year of its new chemical entity exclusivity.

Regardless of the potential challenges and unanswered questions, Rick Lozano, vice president of biosimilars and specialty blood products at Amerisourcebergen Corp., is optimistic about the future that will begin to unfold with the deemed biologics. “We see the potential for a greater number of biosimilars to be developed, enter the same market, compete with one another and pave the way for further clarity around interchangeability,” he told BioWorld.

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