In a move with implications for health care expenses, the US Supreme Court has asked the Obama administration for its views on a heated dispute over a rule that will determine when lower-cost biosimilar medicines can be launched.

At issue is the ability of brand-name drug makers to delay the introduction of biosimilars, which are highly identical versions of expensive biologics. And the court wants the US solicitor general to help determine whether it should hear about a contentious battle between two big drug makers — Amgen (AMGN) and Sandoz — that might settle the matter.

The rule in question concerns the notice that a brand-name company is entitled to receive from a drug maker that wants to sell a biosimilar. But the rule has not been previously tested because the US Food and Drug Administration so far has approved only two biosimilars.

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The rule is found in a federal law known as the Biologics Price Competition and Innovation Act, which says a company seeking to sell a biosimilar must give the manufacturer of the brand-name biologic at least a 180-day notice before selling its drug. The purpose is to provide a brand-name company time to determine what, if any, patent challenges to pursue. And the dispute centers on when the notice begins.

At first blush, 180 days may not seem like a great deal of time. But six months can be significant.

How so? Brand-name drug makers already have 12 years of exclusivity for their biologic medicines, and the additional 180-day notice would give these companies still more time in which to prepare patent challenges, which can delay biosimilar launches. In effect, the difference in timing is a valuable right for biosimilar companies, as well as a valuable impediment for brand-name drug makers.

A great deal is also at stake for patients and payers because biosimilars are estimated to save as much as $44 billion in US health care costs over the next decade. Many insurers and analysts forecast that biosimilars will cost 10 percent to 30 percent less than brand-name biologics, although the number is a moving target, given that companies raise biologics prices to anticipate competition.

“For everyone who pays for these drugs, the additional six months of exclusivity can add up to a lot of money,” said Elaine Herrmann Blais, a partner at the Goodwin Procter law firm, which represents drug makers that sell biologics and are developing biosimilars. She is also a coauthor of the firm’s Big Molecule Watch Blog.

The current dispute began last year, when Sandoz, which is the generic unit of Novartis (NVS), won the right to sell a biosimilar version of Amgen’s Neupogen, a treatment used to boost white blood cell counts in chemotherapy patients and others with compromised immune systems. But Sandoz lost a court case over the timing required to provide notice to Amgen.

Sandoz argued that federal law allowed it to give Amgen notice of its marketing plans 180 days before winning marketing approval from the US Food and Drug Administration. But last summer, a federal appeals court decided that biosimilar companies must wait until they actually receive FDA approval before they must provide brand-name rivals notice of a product launch. So Sandoz asked the Supreme Court to overturn the decision.

Essentially, the Supreme Court is being asked to decide an important policy question because if the appeals court ruling is allowed to stand, it would serve as a broader benchmark for the entire pharmaceutical industry going forward.

This explains why the Supreme Court asked the solicitor general to share its thoughts and possibly help determine the extent to which the case is important enough to review now, rather than wait for more disputes to be decided by lower courts, according to William Jay, who is also a partner at Goodwin Procter and is a former assistant to the solicitor general.

“The chances that Sandoz will persuade the court to take the case have just gone up,” he said.

It’s worth noting that President Obama has repeatedly called for marketing exclusivity for biologics to be held to seven years, and not 12 years, in his annual budget proposals (see page 74). But the invitation to the solicitor general marks the first opportunity for the administration to offer its interpretation of the law governing the 180-day notice, and openly decide whether to side with brand-name drug makers or biosimilar companies, Jay added.

“The executive branch has to make a choice,” he said. “Does it think the best outcome for public policy is to make people wait 180 days or not” for a lower-cost medicine?

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