Photographer: J.B. Reed/Bloomberg

FDA Clears Biotech Drug Copycats, But Buying Them Isn’t So Easy

Updated on
  • Amgen version of Roche drug approved, has no sales date, price
  • ‘Basically, there’s a gazillion patents,’ says consultant

In 2016, Roche Holding AG sold $3 billion worth of its blockbuster biotechnology drug Avastin. Last week, the U.S. Food and Drug Administration approved what’s expected to be a less-expensive version.

Patients and insurers won’t be able to start counting the savings any time soon.

Of seven so-called biosimilar drugs the FDA has cleared since the first approval of one of the drugs in 2015, only three are available for sale. The rest are tied up in legal disputes that can block the cheaper versions for years.

“Basically, there’s a gazillion patents,” Gillian Woollett, senior vice president at the consulting firm Avalere Health and an expert on the drugs. The makers of the original drugs are willing to use those patents to keep competitors out. “You’ve got some extremely well-established products with substantial resources behind them.”

Congress created a path to market for biosimilars in 2010 as part of the Affordable Care Act. The goal was to give patients access to cheaper versions of costly drugs made from living cells, which until the law didn’t have a path for copycats. Generic versions of traditional pills can cost pennies on the dollar compared to brand-name versions and have saved the U.S. health system $1.67 trillion in the last decade, according to a report by the Association for Accessible Medicines.

Read more: How a fortress of patents protects the world’s biggest drug

Roche’s drug, Avastin, costs about $73,000 to $148,000 a year, depending on the type of cancer the patient has, according to the company. While biosimilars are expected to be less costly than the brands, they also require more testing and manufacturing resources, so won’t have the sharp price reductions of pill-form generics.

Patent Walls

Getting the biotechnology drug copies to market isn’t just about getting them approved. Because of their complexity, biologic drugs can have more than 100 patents -- which can be used to fend off competition. One step involved in getting the copycats to market is the “patent dance,” where the two sides try to agree on which patents will be involved in initial litigation. More lawsuits can be filed later.

There have also been disagreements around what to call the drugs, how to market them, and when it’s appropriate to switch patients from one to another. 

In other cases, drugmakers have used contracts with drug plans and insurers to thwart competitors. When Pfizer Inc.’s biosimilar version of Johnson & Johnson’s Remicade came to market, J&J made made exclusive agreements with payers to only cover its brand-name treatment.

The end result has been lackluster sales of the new drugs, including Pfizer’s.

“A physician can’t just switch easily a patient to a biosimilar,” Umer Raffat, an analyst with Evercore ISI, wrote in a note Saturday.

No Date, No Price

On Thursday, when the FDA announced the approval of Amgen Inc.’s version of the 13-year-old Avastin, it called the move “an important way to help spur competition that can lower health-care costs and increase access to important therapies.”

Yet Amgen has no planned launch date for the biosimilar copy of Avastin, which will be called Mvasi. It also hasn’t named a price. Kristen Davis, an Amgen spokeswoman, said Amgen and Roche were in the process of exchanging information about patents.

Roche said it supports biosimilars, but wouldn’t comment on any potential legal disputes.

“Patients’ interests have always been front-and-center for us, and we believe having more treatment options is a good thing,” said Meghan Cox, a spokeswoman for Roche’s Genentech unit, which makes the drug. She added, “We plan to defend the patents protecting Avastin as we do for all of our medicines.”

Doctors and Patients

The FDA, which has announced several measures on drug costs, is trying to get doctors more familiar with biosimilars. It’s also considering changes to draft guidelines on how makers of biosimilar drugs can prove to the FDA that doctors can switch patients from one drug to another. Gottlieb didn’t specify what those changes could be.

“We’re going to be launching a public service campaign to educate physicians about the process biosimilars go through,” FDA Commissioner Scott Gottlieb said. The campaign will likely kick off in the next month or two, Gottlieb said. 

The issue of patents and delays into getting the drugs to market is outside his agency’s purview, Gottlieb said.

New and ‘Weird’

Some of the delays come from the newness of the biosimilars law, said Chuck Klein, a lawyer with Winston & Strawn LLC in Washington, who specializes in biotechnology and pharmaceutical. The hope is that, eventually, makers of brand-name biotech drugs and their potential competitors can work out legal issues in advance.

“Right now it’s a little weird but eventually it will fix itself,” Klein said. “It’s a relatively new law, so the effects are new.”

For non-biotech drugs, such as pills, disputes over patents are worked out ahead of time under the 1984 law known as Hatch-Waxman. With three decades of legal precedent, the process has become so streamlined that trucks full of generic drugs leave the warehouse as soon as FDA approval is granted.

AbbVie Inc. makes the world’s best-selling drug, Humira, which had $10.43 billion in sales in the U.S. last year and treats immune system-related diseases. The North Chicago, Illinois-based drugmaker has erected a veritable fortress of patents.

While the main patent on the biotechnology drug expired last year, not a single competitor has launched.

Amgen’s Humira biosimilar Amjevita was approved by the FDA in September 2016, though still isn’t on the market. Davis, the Amgen spokeswoman, said the company doesn’t plan to start sales this year, and analysts who follow the company have said it could be delayed until 2020 or later.

While drugmakers fight over the patents, patients will keep waiting.

“It is probably a strategy that drugmakers will continue to pursue,” said Cynthia Hardman, a partner who focuses on drug patent litigation at the law firm Goodwin Procter LLP. “These are lucrative products and drugmakers seem to be looking for every avenue they can exploit to protect them and this seems to an effective way, building a patent thicket around their products.”

— With assistance by Caroline Chen

(Updates with J&J’s Remicade strategy in eighth paragraph.)
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