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Biotech Companies Lobbying to Impede Cost-Saving Biosimilars

We have previously written about how the Affordable Care Act’s provisions on biosimilar drugs represent a missed opportunity to bring cost-saving biosimilar drugs to market. Now, a new study from Grant Thornton shows just how much money these biosimilar drugs could save.  According to the study, 21 biologic drugs with a market value of over $50 billion have lost or will lose patent protection between 2009 and 2021.  If biosimilars for these expired-patent drugs were able to come to market, the study indicates they could be expected to reduce drug costs by between 20% and 25% compared to the originator medicines.  Since biologic drugs are estimated to account for 30 to 40% of total U.S. drug spending and will by 2016 represent 7 of the top 10 U.S. drugs, achieving savings from biosimilars is crucial if we are to bring health spending under control in this country.

So it comes as a disappointment, but perhaps not a surprise, that the biotech companies with expired patents are doing as much as possible to throw up roadblocks to biosimilars.  In an recent article, “Biotech Firms, Billions at Risk, Lobby States to Limit Generics,” the New York Times exposes how two companies, Amgen and Genentech, have been asking state legislatures to make it more difficult to prescribe biosimilars.  The article reports that, at the urging of the two companies, bills have been introduced in at least eight states that would make it more difficult to substitute lower-cost biosimilar drugs.  Among the impediments to biosimilars in the state bills are requirements to obtain patient consent to a substitution (not now required to substitute generics of traditional chemically produced pills), for the pharmacist to notify the doctor if a substitution is made, and for the pharmacist to maintain records of the substitution for several years.  While the biotech companies say these changes are necessary to protect patient safety, the article quotes Brynna Clark of the Generic Pharmaceutical Association that “[a]ll of these things are put in there for a chilling effect on these biosimilars.”

In a follow-up editorial, “Improper Efforts to Limit Competitive Drugs,” the New York Times urges state legislatures to refrain from legislating in this area until they see what the Food and Drug Administration does to implement the Affordable Care Act provisions encouraging the use of biosimilars.  The FDA can be expected to address exhaustively the safety and efficacy of biosimilars, and the states should not now be erecting preemptive legislative barriers to these cost-saving drugs.  We expect that once the FDA issues its guidance, it will be clear that the proposed state legislation on biosimilars is unnecessary – except to protect the profits of biotech companies and lock in higher drug costs for health plans and consumers.