Divided Court upheld most of President Obama’s healthcare overhaul.
A divided U.S. Supreme Court let stand the streamlined process for finally bringing biosimilar drugs to market when it surprised many pundits by upholding President Barack Obama’s healthcare overhaul this morning, leaving drug developers likely to wonder what their next move should be.
In a widely awaited and widely anticipated 5–4 decision with Chief Justice John Roberts siding with liberal justices, yet still reflective of the sharp political divide among the justices, the high court upheld the Biologics Price Competition and Innovation (BPCI) Act of 2009, incorporated within Obama’s Patient Protection and Affordable Care Act. The act, enacted on March 23, 2010, mandated the creation of an abbreviated approval pathway for biological products shown to be biosimilar to or interchangeable with an FDA-licensed biological reference product.
With BPCI upheld, “the biosimilar market will proceed in the same course as it has. Depending whether you’re on the brand name pharmaceutical side or more on the biosimilar side, where your allegiance is, you may view that as welcome news or not,” Maria E. Gonzalez Knavel, a partner with the law firm Foley & Lardner LLP, told GEN.
In approving biosimilars and bringing them to market, FDA lags behind the European Medicines Agency, which developed a biosimilars pathway in 2005, and has since developed biosimilar guidelines for nine categories of medicines.
FDA on Feb. 9 issued three draft guidances intended to carry out BPCI, as required by the law. Under one of the yet-to-be-finalized draft guidances FDA said it intends to use a risk-based “totality-of-the-evidence” approach to evaluating biosimilars, and employ a gradual or “step-wise” approach to developing biosimilar products. The second presented analytical factors for drug developers to consider when assessing biosimilarity between a proposed therapeutic protein product and a reference product. The third addressed concerns arising in the early stages of product development, including requesting meetings with the FDA, addressing differences in formulation from the reference product, and requesting exclusivity.
BPCI also set a 12-year data exclusivity period from the date of first licensure of the reference product. However, Obama proposed to shorten that to seven years in his fiscal 2013 budget proposal, claiming the change would save Washington $4 billion over 10 years. The change is opposed by most of the branded-drug industry, led by the Biotechnology Industry Organization and Pharmaceutical Research and Manufacturers of America, which argue the change would discourage development of the very biosimilars that exclusivity is supposed to catalyze. Last year, House and Senate committees backed the 12-year period.
The Supreme Court also upheld the controversial portion of Obama’s healthcare overhaul that requires Americans to purchase health insurance or else pay a penalty, by ruling that the mandate was constitutional as a tax, not as originally argued by supporters, under the U.S. Constitution’s interstate commerce clause (Article I, Section 8, Clause 3), which expresses among the listed powers of Congress: “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” Supporters of the mandate said it prevented Americans from benefiting from healthcare without paying for it.
Gonzalez Knavel said that the repeal of the insurance purchase mandate would not result in a dramatic change of business for biopharmas: “Business is going to continue as it is. Pharmaceutical companies right now do have discounts to states under the Medicaid programs. They’re doing a lot of patient programs where they are providing patients that are indigent with the ability to receive their medically necessary drugs. I don’t really perceive much of a change in that,” she said.