Battle over biosimilar drugs starts to heat up
Published: Saturday, April 6, 2013 at 7:05 p.m.
Last Modified: Saturday, April 6, 2013 at 10:00 p.m.
TALLAHASSEE — One of Florida lawmakers’ biggest gripes is the rising cost of Medicaid, the $21 billion federal-state health care program for the poor and disabled.
BIOSIMILARS AT A GLANCE
Florida is among at least one of 15 states where major pharmaceutical companies are trying to pass legislation to limit the use of a new wave of drugs known as biosimilars.
What are biosimilars?They are essentially “generic” drugs that seek to copy a group of complex drugs known as biologics used to treat chronic illnesses such as cancer, rheumatoid arthritis and multiple sclerosis. Biologics differ from older chemical-based drugs in that they are proteins made using processes involving living organisms or systems.
Biologics are growing in use, and as the patents for the older biologics expire, biosimilar makers want to move into the market. Biosimilar drugs could provide treatment at a 30 percent to 40 percent lower cost than the brand-name biologics, according to estimates from federal officials and industry analysts.
Are biosimilars available now? Not in the United States. They are used in Europe.
What does the Florida legislation do? The bills (HB 365 and SB 732) seek to set Florida standards for dispensing the drugs. The bills would require pharmacists to notify doctors within five days if they substitute a biosimilar. It would also require pharmacists to keep records of the substitution for at least two years.
What’s next? The House bill is ready for a floor vote, while the Senate measure still needs to clear several committees. Their passage looks likely since the bills are being sponsored by influential lawmakers who oversee health care spending.
Legislators have taken dramatic steps in recent years to curb the costs, including moving most patients into managed care and reimbursing hospitals differently.
But this year, momentum is building for a measure that could limit annual savings for one of Medicaid’s largest annual expenses — prescription drugs — at a cost of tens of millions of dollars.
Two lawmakers, Rep. Matt Hudson, R-Naples, and Sen. Denise Grimsley, R-Sebring — who lead the House and Senate budget subcommittees that oversee Medicaid spending — are sponsoring legislation that critics say could hinder the use of a new wave of pharmaceutical drugs called biosimilars.
Biosimilars — essentially cheaper generic versions of a class of drugs known as biologics — are not well known because they are not allowed in the United States. But with federal approval expected in the next few years, biosimilars are set to become as commonplace as they are now in Europe.
The biologics include drugs like Humira, which is used for rheumatoid arthritis, and cancer treatment drugs like Herceptin and Avastin.
Florida, like more than a dozen other states, has become a battleground between the companies that manufacture the biologics and the biosimilars, driven by the reality that the patents for a number of the brand-name biologics will be expiring in the next few years.
The financial stakes are high for both sides in this health care debate. The generic drug makers say the legislation is being pushed by biotech firms that could lose $60 billion through patent expirations by 2020.
The biosimilar manufacturers also would gain from a more wide-open market, with a Senate analysis showing a projected biosimilar market in the U.S. of $11 billion to $25 billion by 2020.
Unlike the wave of generic drugs that replaced the simpler chemical-compound drugs beginning in the 1980s, the biologic drugs and their biosimilars are more complex. As the name implies, the biosimilars are “similar” but not exact copies of the brand-name biologics, which are made from human and animal material rather than chemicals.
Legislation (HB 365 and SB 732) moving this session would create standards for the use of biosimilars.
Supporters say the legislation will allow biosimilars to be substituted for the biologic drugs. And proponents, including the Florida Medical Association, say the standards — which include notification of the treating physicians when substitutions are made — will protect patient safety.
Opponents say the legislation will create barriers that could discourage pharmacists from automatically substituting the biosimilars for the more costly brand-name biologics.
They also say the legislation is premature, given that the federal Food and Drug Administration has not yet approved any biosimilars. Once they are approved, the FDA, after rigorous testing and review, will determine which biosimilars will be “interchangeable” with the brand-name biologics.
Testimony by the Generic Pharmaceutical Association, which opposes the bill, to the Senate Health Policy Committee last week underscored the potential Medicaid savings that could be impacted if the legislation curbs future use of biosimilars.
In 2011, Florida spent more than $104 million on biologic drugs in its Medicaid program. The generic drug makers say the biosimilars could reduce those costs by 40 to 50 percent — although Senate staff analysts used a more conservative 20 to 30 percent savings.
Nonetheless, the savings could be substantial and would grow as more biologics are developed and could eventually be replaced by biosimilars. In fact, by 2016, eight of the 10 top-selling drugs in the U.S. will be biologics, according to the testimony.
Another area of savings for the state would be its own health insurance program for its employees.
David Dederichs, a lobbyist for Express Scripts, a company that manages pharmacy benefits for the Florida government and more than 100 million Americans nationally, said a review of his company’s records showed Florida spent $99 million on biologics in 2012 for its own employees, with a potential savings of $40 million.
“This legislation will create impediments to doing that,” he told the Senate panel.
But lawmakers also heard from doctors and other medical groups that support the legislation, including the provision that physicians be given notice within five days if a pharmacist substitutes a biosimilar for a brand-name biologic.
The pharmacists also would be required to keep records of the substitution for at least two years.
“For things such as antibiotics, if something gets substituted, it’s not a big deal,” Marc Inglese, a Tallahassee dermatologist, told the Senate panel. “But for something complex like this, where I’m really following the patient closely, long term for side effects, both of us need to know exactly what they’re on.”
Opponents of the notification standard say Florida doctors, like Inglese, have the right under current law to block any substitution, including biosimilars, by specifying on the prescription that the brand-name drug is “medically necessary.”
But in practice, Inglese said, “there are many instances … due to either oversight or something, the patient doesn’t get the right medicine.”
For patients suffering from chronic ailments that the biologics treat, “that could be a problem,” Inglese said.
Grimsley, the Sebring Republican, noted the “parade of special interests” that had testified about the legislation, saying she was motivated by how it would help consumers by allowing biosimilars to be substituted if the pharmacists met the notification and record-keeping provisions.
“I think it’s prudent for notification to be given to the physician,” Grimsley said.
But Grimsley, who is a nurse with more than 30 years of experience, said the lobbying over the legislation — which has led to packed hearing rooms in the Senate and House — underscored one of her major concerns about health care.
“It’s become all about the money,” she said. “If you think there is no money in health care, look around this room.”
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