Would Proposed Changes on Interchangeability Diminish Designation?

When the Affordable Care Act (ACA) became law on March 23, 2010, it established the 351(k) biosimilar pathway via the Biologics Price Competition and Innovation Act (BPCIA), which amended the Public Health Service (PHS) Act. Since then, the FDA has approved more than 40 biosimilars, with only a handful of those gaining interchangeable status. That designation, however, may not carry quite the distinction it historically has had if proposed guidance from the agency — which would replace previous guidance — on labeling for interchangeable biosimilars is finalized. Various stakeholders, including manufacturers, pharmacies, patients and providers, stand to be affected, stakeholders say.

In contrast to the EU, whose European Medicines Agency (EMA) and the Heads of Medicines Agencies (HMA) clarified in September 2022 that all biosimilars approved in the EU are interchangeable, the FDA has created two levels of biosimilars: biosimilars and interchangeable biosimilars.

The BPCIA requires that biosimilar manufacturers demonstrate that their drugs are “highly similar to the reference product notwithstanding minor differences in clinically inactive components,” safe, pure and potent. To be granted interchangeable status, drugmakers must demonstrate not only biosimilarity but also that “the risk in terms of safety or diminished efficacy of alternating or switching between use of the biological product and the reference product is not greater than the risk of using the reference product without such alternation or switch.” Manufacturers must specifically apply for the interchangeable designation and provide data from these switching studies.

The FDA has granted the designation to only five biosimilars so far: Biocon Biologics Inc.’s Semglee (insulin glargine-yfgn) and Eli Lilly and Co.’s Rezvoglar (insulin glargine-aglr), both of which reference Lantus (insulin glargine) from Sanofi US; Boehringer Ingelheim Pharmaceuticals, Inc.’s Cyltezo (adalimumab-adbm) and Pfizer Inc.’s Abrilada (adalimumab-afzb), both of which reference AbbVie Inc.’s Humira (adalimumab); and Coherus BioSciences, Inc.’s Cimerli (ranibizumab-eqrn), which references Lucentis (ranibizumab) from Genentech USA, Inc., a member of the Roche Group.

Physicians must specifically prescribe biosimilars without interchangeable status. But agents with that designation may be dispensed at the pharmacy level without provider intervention. All 50 states, as well as Washington, D.C. and Puerto Rico, have enacted laws around interchangeable biosimilar substitution, with policies such as informing patients and physicians when a biosimilar is substituted without a prescription for that product.

Correct, Up-to-Date Labeling ‘Has Proven Challenging’

On Sept. 15, the FDA released the draft guidance “Labeling for Biosimilar and Interchangeable Biosimilar Products.” It proposes various changes to the July 19, 2018, guidance “Labeling for Biosimilar Products,” which the new guidance will replace when finalized.

In the Federal Register notice (88 Fed. Reg. 63957 Sept. 18, 2023), the FDA explains that it “has gained valuable experience about labeling considerations for biosimilar and interchangeable biosimilar products” since it approved the first biosimilar, Sandoz’s Zarxio (filgrastim-sndz), on March 6, 2015. That experience has revealed issues around labeling of biosimilars and interchangeable biosimilars: “Determining how to appropriately label such products and keep labeling up to date without causing undue confusion has proven challenging,” it says.

“A demonstration of biosimilarity or interchangeability means, among other things, that FDA has determined that there are no clinically meaningful differences between the proposed product and the reference product in terms of safety, purity, and potency,” says the guidance.

It questions whether information explaining interchangeability on a drug’s label is useful for providers, “who can prescribe both biosimilar and interchangeable biosimilar products in place of the reference product with equal confidence that they are as safe and effective as their reference products.” Rather, that information “is more appropriately located” in the Purple Book Database of Licensed Biological Products, known simply as the Purple Book, which “has evolved as a resource for patients, pharmacists, physicians, and other health care providers to easily identify approved biosimilar and interchangeable biosimilar products.”

In addition, the guidance supports having the same biosimilarity statement for both biosimilars and interchangeable biosimilars on their labels. In line with this, the FDA also published the draft guidance “Biosimilarity and Interchangeability: Additional Draft Q&As on Biosimilar Development and the BPCI Act,” which replaces the Q&A guidance issued on Nov. 19, 2020. The documents are the same except the new guidance withdraws the final two Q&As — which were on interchangeability labeling — that appeared in the initial guidance.

Comments are due by Nov. 17.

Change Could Downplay Significance of Designation

The new guidance is “surprising,” says Andy Szczotka, Pharm.D., chief pharmacy officer at AscellaHealth. While the FDA asserts that interchangeable biosimilars may help boost patients’ access to biologics, “by removing this designation from the product labeling, this may hinder prescriber and pharmacist ready access to this information at the point of patient care. Having information regarding interchangeable status available in multiple locations, including the product labeling, would provide valuable information regarding the product’s effectiveness and safety at the point of patient care and provide additional treatment considerations for the prescriber and patient.”

The interchangeability designation means that a biosimilar has undergone “an additional level of clinical testing,” he explains. “Having this information available in multiple locations, including the product labeling, provides additional clarity and data to the prescriber that should aid in their decision process. Prescribers typically do not reference or may not have knowledge of the Purple Book at the time of prescribing, so having the interchangeable designation available in both the Purple Book and the product labeling would be optimal for all parties. Not including this in the prescribing information may minimize the designation’s significance.”

He tells AIS Health, a division of MMIT, that “physicians may already be prescribing non-interchangeable biosimilars in an interchangeable fashion, and that distinction between the two is potentially confusing to prescribers.” Education on the differences between biosimilars and interchangeable biosimilars, as well as offering that information in a variety of places, “would likely benefit all parties and likely encourage the further adoption of biosimilars.”

Karina Abdallah, Pharm.D., senior director of the access experience team at PRECISIONvalue, says she is not surprised that the FDA issued the guidance, because in the time since the 2018 guidance was released, “the FDA’s interchangeability designation for biosimilars caused numerous debates among industry stakeholders (e.g., manufacturers and prescribers). With five years’ time since the last guidance, the industry was due for further clarification from the FDA.” Through the new guidance, the FDA is “attempting to promote [the] overall use of biosimilars, and it will be very telling when stakeholders (prescribers and manufacturers) provide comments for us to gauge the industry’s alignment with the FDA’s reasoning.”

Data from the switching studies that interchangeable biosimilars undergo in order to gain that designation assists the FDA in evaluating the safety of a pharmacist substituting a drug, but it “does not mean that an interchangeable biosimilar is safer or more effective than other biosimilars,” says Szczotka. The FDA’s proposal to have the same biosimilarity statement for both biosimilars and interchangeable biosimilars “does not appear to reflect the additional effectiveness and safety information that was conducted and reviewed by the FDA” for interchangeable agents. “This appears to diminish the additional testing conducted and does not provide incentives to the pharmaceutical manufacturers to undergo this process if they are provided the same status in product labeling as other biosimilar products that did not conduct these testing and switching studies.”

This proposal, observes Abdallah, “may receive pushback from stakeholders,” and she points out that “the FDA specifically ‘invites comment on how useful such biosimilarity statements have been for healthcare practitioners and the public, whether such statements can be improved to provide more clarity on what biosimilarity means, and whether biosimilar and interchangeable biosimilar product labeling should include such a statement at all.’”

Having the same biosimilarity statement, says Ryan Clements, managing director at KPMG US, “diminishes the advantage that those with interchangeable designations have over those that do not. This is in line with efforts and policy to encourage competition and create greater access within the biosimilars market. It allows for the availability of more biosimilars entering the market, which in turn reduces price. Additionally, it lowers the cost burden to develop biosimilars, which ultimately lowers the cost for patients.”

Legislation Targets Interchangeable Status

One of those efforts to level the biosimilar playing field is taking place at the congressional level.

In July, Sen. Mike Lee (R-Utah) reintroduced the Biosimilar Red Tape Elimination Act (S. 2305). The legislation is focused on increasing competition among biologics and lowering consumer costs for them.

He first introduced the bill on Nov. 17, 2022, with the initial version focused on doing away with the FDA requirement for switching studies for biosimilars seeking the interchangeability designation. In a press release when the bill was first introduced, Lee claimed that the process companies need to undergo to get that designation is “cumbersome and expensive.…Eliminating this barrier would increase access to lower-cost biosimilars and save payers and consumers billions over the next five years.”

The reintroduced legislation, however, seeks to simply “deem biosimilars as interchangeable with their branded equivalent upon their approval by the FDA.”

The legislation, which has bipartisan support, has been referred to the Senate Committee on Health, Education, Labor, and Pensions.

When the bill was first introduced, Sarfaraz Niazi, Ph.D., an adjunct professor of biopharmaceutical sciences at the College of Pharmacy at the University of Illinois Chicago, pointed out that “according to the FDA, ‘biosimilars have no clinically meaningful difference with their reference product,’ so if there is no difference, they should be interchangeable without the extensive and expensive switching and alternating studies in patients.…Creating two classes of biosimilars has weakened the trust in biosimilars.”

So might the FDA do away with the interchangeable label entirely?

The FDA did not respond to an AIS Health request for comment on this issue, as well as other questions about the guidance.

“It is possible that doing away with the interchangeable label may streamline the decision and prescribing habits of prescribers,” states Szczotka, but it also “may add confusion to the dispensing process depending upon the respective state laws. This may add additional processes for the pharmacy to ensure compliance with respective state laws. Pharmaceutical manufacturers may benefit from not having to conduct the additional studies if this designation was removed and potentially pass along these savings to the health care system,” he says, but at the same time, it “would not allow for any potential points of differentiation among similar biosimilar products.”

“The interchangeability label beyond biosimilars is deeply ingrained in the ways products get to patients,” asserts Clements. “Doing away with the label entirely would represent a big shift in the ways stakeholders interact with each other.”

“Impact on stakeholders would vary significantly, including how manufacturers negotiate price, offer rebates, prioritize formulary placement and develop access and adherence strategies,” he contends. “Wholesalers and PBMs would have less advantage in negotiating rebates, and much of the PBMs’ profit levers would be threatened by their ability to leverage control of formulary placement for profit. This could lead to price discounts, which would help patients from an affordability perspective similar to classic generic small molecule products.”

Without the interchangeability designation, physicians “would likely see biosimilars as comparable,…and they may feel more comfortable prescribing them more broadly. This could create opportunity for more innovative contracting options.”

Abdallah has a different take. Removing the designation on labeling “may diminish confidence in some providers to prescribe and administer biosimilars or may discourage their use,” she maintains. “Any potential impact on the uptake of a product could also impact payers’ coverage and product preferencing positions, which may in turn also stifle manufacturers’ appetite for the biosimilar market.”

“Manufacturers with biosimilars (or with plans to pursue biosimilars) should understand how the potential label updates may impact provider prescribing and be prepared to proactively communicate with customers to mitigate any potential issues,” she recommends.

According to Clements, “The guidance is likely to discourage manufacturers from pursuing interchangeability, as the incremental cost to run the extra interchangeable trials will not provide enough differentiation. Price will be the ultimate deciding factor in coverage. Given this proposal, interchangeability would not move the needle on differentiation. However, depending on the asset and the dynamics around current and future competition for that specific asset, there could be varying degrees of impact. In a class where there are only two entrants, one that has the designation and one that does not, this could be a differentiator. This differs from a class where there are five or more entrants, and a price-driven market is created as a result.”

Szczotka agrees that the guidance may dissuade drugmakers from seeking interchangeable status. In addition to switching studies, companies must conduct postmarketing safety monitoring for these agents, he notes. “Without this additional designation, there would not be a marketing advantage for the manufacturer with this product as compared to other biosimilars that do not have this designation. The additional costs for this testing and FDA review process would likely not be able to be recouped, and the interchangeable product may be at a pricing disadvantage for payers with other potential lower cost biosimilars being market available.”

Ultimately, says Clements, “There is potential for a tailwind propelling the biosimilars market driven by the Inflation Reduction Act’s provisions around competition, creating a paradigm shift in the ways originators see new entrants (generics/biosimilar). Historically, the approach has been to maintain exclusivity and extend originator life cycle for as long as possible. However, the exemption levied when an originator has generic/biosimilar competition has the potential to allow for favorable economics, depending on the asset and how many entrants can feasibly commercialize and capture share. Loss of exclusivity strategies will need to be highly individualized.

“There is a potential headwind for the biosimilars market given that pricing and discounts will likely be the driving factor for adoption,” he continues. “Because there are currently very few biosimilar manufacturers who have the scale and manufacturing capability to produce biosimilars while remaining competitive, smaller players will likely exit the space.”

Contact Abdallah through Andie Lunkenheimer at andie.lunkenheimer@gcihealth.com, Clements via Marissa Ross at marissaross@KPMG.com and Szczotka via Caroline Chambers at cchambers@cpronline.com.