Supreme Court Ruling on Biosimilars Will Lower Drug Costs

August 17, 2017

MADRID — A unanimous Supreme Court decision on biosimilars, which industry insiders anticipate will lower drug costs, probably won't lead to cheaper prices for patients or physicians wrangling with nonmedical switching, delegates heard at the recent European League Against Rheumatism (EULAR) Congress 2017.

The European Congress kicked off in the wake of the US Supreme Court decision and had meeting attendees talking about the fact that manufacturers developing biosimilar agents no longer need to wait for approval from the US Food and Drug Administration (FDA) to start marketing products.

In fact, biosimilar manufacturers can now start the clock on the 6-month exclusivity window that is afforded the maker of the original biologic as much as 180 days before the FDA approval meeting.

Dr Stephen Hanauer

"Six months of marketing is a lot of money for a billion-dollar drug," said Stephen Hanauer, MD, professor of medicine at Northwestern University in Chicago. "This will affect "the economics of the pharmaceutical industry."

Allowing manufacturers to market a biosimilar closer to its approval date could decrease confusion when the agent becomes available, said Angus Worthing, MD, a rheumatologist in Chevy Chase, Maryland, who is chair of the government affairs committee at the American College of Rheumatology.

"The unanimous decision will likely reduce the delay between the day a biosimilar is approved by the FDA — which is typically widely publicized — and the day doctors can prescribe it," he told Medscape Medical News.

"Because of this decision, patients could have access to biosimilars sooner than they would have previously," Dr Worthing explained. "And this could reduce patients' out-of-pocket costs and improve their access to critical treatments."

The Decision

On June 12, the court ruled — in the combined patent cases of Sandoz v Amgen and Amgen v Sandoz — that Sandoz had the right to market a biosimilar version of Amgen's Neupogen (filgrastim)‎ before receiving FDA approval. In handing a victory to Sandoz, a generic pharmaceutical company, the Supreme Court judges reversed a Federal Circuit Court ruling that had favored Amgen.

Litigation began after Sandoz announced its intention to seek a license from the FDA to market a filgrastim biosimilar. This triggered a complex patent lawsuit that cited the Biologics Price Competition and Innovation Act.

"It's really an individual manufacturer-versus-manufacturer issue," said Michael Reilly, Esq., executive director of the Alliance for Safe Biologic Medicines in Arlington, Virginia.

Biosimilars marketed before the traditional 6-month waiting period still have to go through the same regulatory approval process.

Dr Gary Lichtenstein

This raises a potential downside, said Gary Lichtenstein, MD, director of the Inflammatory Bowel Center at Penn Medicine in Philadelphia. "It may give people false hope if the biosimilar doesn't make it through the process."

This is all about money, not about patient access.

One of the biggest challenges as a provider is access, added David Rubin, MD, codirector of the Digestive Diseases Center at the University of Chicago Medicine. However, lower costs for payers will not necessarily translate into greater access for patients. "This is all about money, not about patient access," he said.

The "whole purpose of biosimilars" is to lower the cost of medication, said Dr Lichtenstein. "The problem is that patients don't necessarily save directly. The true cost saving goes to the insurance companies, the health systems, and the federal government, not to the patient."

Ideally, drug companies and payers would pass along the 20% to 30% they save when they acquire the biosimilar instead of the originator. However, "I'm unaware of any precedent where that has occurred, to be frank," Dr Lichtenstein said.

David Rubin

The switch from a biologic to a biosimilar is unlike the switch from a brand-name small-molecule drug to a generic formulation, where patients often directly benefit from the lower cost.

"Merck offered a 35% discount with the first biosimilar approved in the United States," Reilly reported. "Now what we are seeing globally is more like 15%."

"Ultimately, patients who take a biologic are generally more compromised, so they have less incentive to switch," he added. "That is especially true when there is a small spread in price between an innovator product and a biosimilar."

Dr Angus Worthing

Dr Worthing is more optimistic. The Supreme Court decision "could lower the overall cost of care for autoimmune diseases, cancer, and other conditions," because biologic drugs "comprise about a quarter of the pharmacy spend in the United States," he said.

Nonmedical Switching


Most physicians are comfortable when a patient with a disease that can be treated with a biologic starts on a biosimilar and remains on that biosimilar, said Dr Lichtenstein.

It is the nonmedical switches that raise concerns. A patient can be doing well on a biologic when the insurance company mandates a switch to a new agent to save money.

Most patients would rather get the originator than a biosimilar.

"Most patients would rather get the originator than a biosimilar," said Dr Lichtenstein. They would prefer to stay on "the actual product, particularly if they are doing well."

With more biosimilar approvals expected, mandated nonmedical switches will likely increase, he added.

Michael Reilly

Dr Worthing is more optimistic. The Supreme Court decision "could lower the overall cost of care for autoimmune diseases, cancer, and other conditions," because biologic drugs "comprise about a quarter of the pharmacy spend in the United States," he said.

There will be big questions about switching "until we get an interchangeable biosimilar in this country," said Reilly. "Interchangeability is the Holy Grail."

To date, none of the biosimilars marketed in the United States meets the stringent criteria of interchangeability. The FDA issued draft guidance on interchangeability in January, which includes a call for switching studies to demonstrate that an agent "can be expected to produce the same clinical result as the reference product in any patient."

This is a high regulatory standard, which makes it potentially more expensive to develop an interchangeable agent, Reilly explained.

Table. The Five Biosimilars Approved by the FDA

Biosimilar Biosimilar Manufacturer Originator Biologic Biologic Manufacturer
Amjevita (adalimumab-atto) Amgen Humira AbbVie
Erelzi (etanercept-szzs) Sandoz Enbrel Amgen
Inflectra (infliximab-dyyb) Pfizer/Celltrion Remicade Johnson & Johnson
Renflexis (infliximab-abda) Samsung Bioepis Remicade Johnson & Johnson
Zarxio (filgrastim-sndz) Sandoz Neupogen Amgen


In a letter to the FDA, the American College of Rheumatology commended the guidance "for striking an appropriate balance between ensuring safety and efficacy of drugs while also bringing biosimilar products to the marketplace as efficiently as possible." And it supported the need for switching studies, dispensing guidance, and recommendations for clear naming of interchangeable biosimilars.

The FDA took some criticism for proposing a naming convention that includes a random suffix of four letters added to each biosimilar. Opponents argued that a more meaningful suffix for the nonproprietary name could reduce confusion.

The bigger issue is a lack of physician confidence.

"We need more data," said Reilly. "There is still a dearth of information out there, and only five approved biosimilars in the United States. In general, there are much bigger challenges for the introduction and proliferation of biosimilars. The bigger issue is a lack of physician confidence, which is directly related to the scarcity of data."

Dr Hanauer is a consultant for Janssen, AbbVie, Amgen, Celltrion, Pfizer, Boehringer Ingelheim and Hospira. Dr Lichtenstein is a consultant for AbbVie, Takeda, Pfizer, and Johnson & Johnson, and his institution receives IBD Fellowship support from Takeda, Pfizer, and Johnson & Johnson. Dr Worthing and Mr Reilly have disclosed no relevant financial relationships. Dr Rubin is a consultant for Pfizer, Amgen, Samsung Biologics, AbbVie, and Janssen.

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