Clash of the BioPharma Titans Looms Over Biosimilars

6/25/12

Fights between powerful combatants form the foundation of many mythological tales. In the epic film Clash of the Titans, Perseus, the mortal son of Zeus, must kill the monstrous Kraken before it can annihilate his beloved Princess Andromedra and the citizenry of Joppa. Perseus heroically decapitates the dreaded Gorgon Medusa to obtain the most powerful weapon of his time: her snake-covered head. A single glance from Medusa’s countenance turns the Kraken to stone, the local residents are saved from a horrible fate, and Perseus and Andromeda live happily ever after.

Perseus vanquishing the Kraken was but a small skirmish compared to an even larger battle that is shaping up in the biotech version of this myth. The titans of biopharma are currently taking sides, and the clash of these powerful combatants is likely to be an expensive one. Healthcare consumers will find their wellbeing threatened by a powerful opponent. One of the strongest and most dreaded weapons of modern society has already been brought to bear: armies of lawyers fortified with thick legal briefs. The eventual outcome of this mêlée is unclear, but at stake are billions of dollars in revenue and profits. How was this conflict started, and who are the warriors in this brewing confrontation?

The fracas began when Abbott launched a broadside attack on the burgeoning field of biosimilars by filing a citizens petition with the FDA to protect their rheumatoid arthritis treatment adalimumab (Humira) from competition by biosimilars. This drug is a humanized monoclonal antibody that works by binding to and neutralizing a protein known as TNF. Annual sales of Humira were nearly $8 billion in 2011, and it is poised to become the largest selling drug in the world following the expiration of Pfizer’s patent on atorvastatin (Lipitor) in 2012. Humira’s success in the marketplace has attracted the attention of numerous competitors, who have been planning on making their own versions of this blockbuster medicine when its patent expires. Abbott has asked the FDA not to “accept for filing, file, approve or discuss with any company, or otherwise taking any action indicating that the agency will consider any application or any investigational new drug application for a biosimilar that cites, as its reference product, BLA 125057 for Humira® (adalimumab) or any other product [emphasis mine] for which the biologics license application (BLA) was submitted to FDA prior to March 23, 2010, the date on which the BPCIA was signed into law”.

For those of you who are not familiar with the term, biosimilars are the generic drugs of the biotech world, copies of patented proteins that comprise many of the world’s best selling drugs. Biosimilars are currently not available in the U.S. (with one minor exception) primarily because there is no defined regulatory pathway for their approval. The FDA spent months soliciting input from industry and consumer groups that is being used to plan out a regulatory pathway; their draft guidance was issued recently. The Biologics Price Competition and Innovation Act of 2009 (BPICA) is legislation that establishes the ground rules for resolution of patent disputes that affect the development of biosimilars. BPICA is part of the Affordable Care Act (“Obamacare”), the legality of which is currently being reviewed by the U.S. Supreme Court. Their decision on the Affordable Care Act may significantly affect the status of Abbott’s petition to the FDA.

On what grounds has Abbott asked the FDA not to approve Humira (and other) biosimilars? Most of us know the Fifth Amendment of the U.S. Bill of Rights from the clause featured in countless legal dramas in which a person shall not “be compelled in any criminal case to be a witness against himself”. The Amendment further goes on to state that someone should not “be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation”. It is this taking of private property clause that Abbott is hoping will impede the development of biosimilars. Abbott has argued that private property (in this case, trade secrets) contained within biological license applications (BLAs) will be “taken” if these documents are used as part of the process to approve biosimilar proteins for sale. According to Wikipedia, in United States v. 50 Acres of Land (1984), the Supreme Court wrote that “just compensation” is calculated by determining “the market value of the property at the time of the taking contemporaneously paid in money.” In Abbott’s case, this would be a very large sum indeed, given the sales mentioned above.

The legal issues here are complicated and above my pay grade, so I’m not going to attempt to parse the fine points. While Abbott attorneys are clearly hoping for a legal knockout to protect their Humira franchise, the combined forces of those companies that have committed themselves to making biosimilars will likely oppose Abbott’s interpretation of the Amendment. The BioPharma world can be divided into four realms on the basis of biosimilars:

1) Companies that sell or market biologics, but are not planning on making biosimilars at present. Abbott will apparently be spearheading this group, although it is not clear which companies, if any, will be joining them in their legal strategy.

2) Companies that make (or market) their own biologics, and are planning on introducing biosimilar versions of their competitors’ drugs as well. These include Amgen (with partner Watson), Merck, Biogen Idec (joint venture with Samsung), Pfizer, and Novartis.

3) Companies that only plan to make biosimilars, but not branded biologic medicines. This group would include Teva, Baxter (joint venture with Momenta) and Hospira.

4) Companies that are not currently selling either branded biologics or planning on making biosimilars. This would include a large number of generic drug manufacturers.

At stake here is the ability of biopharma firms to develop “generic” versions of some of the most expensive drugs on the planet. While biosimilars will not sell at anywhere near the discount that generic small molecules achieve, they will result in significant cost savings for the health care system. A win for Abbott’s petition will clearly be a loss for healthcare consumers. An alternative view (that I do not subscribe to) would be that an Abbott victory would be a win for the citizenry because it would force competitors to develop not just essentially similar drugs, but superior medicines (so-called biobetters). With a well-designed, innovative drug, coming up with something that truly is significantly better could be quite a challenging proposition. Cost (and not efficacy) will be the most important consideration in the biosimilars marketplace, just as it is in the generics world.

It’s hard to imagine that attorneys representing many of the biopharma industry heavyweights were not aware that someone might trot out this “unjust taking” argument, and they have a well-reasoned argument to make against it. The case may eventually find itself in front of the U.S. Supreme Court, although much pontificating is likely ahead of us before that happens. Many of the legal issues that reach the Court these days are not clear-cut and politically explosive, as evidenced by an increasing number of 5-4 decisions in recent years. The ramifications of any decisions reached by the FDA or the Court are likely to reverberate throughout the industry and will affect costs of the U.S. healthcare system for years to come.

The path to creating generic versions of “small molecule” drugs is relatively straightforward. Manufacturers must show that their drugs are chemically identical to branded molecules, and that they have similar physical characteristics, such as solubility. Selling of generic drugs can begin once these traits have been demonstrated and patents on the branded drugs have expired. A key point is that expensive, time consuming clinical trials are not required to get approval to sell generic drugs. In contrast, the road to biosimilars has been rocky, studded with regulatory potholes that forced many companies to slow down their efforts to develop these medicines. The FDA has been struggling for years to sort out the many compound issues involved. The primary concern is how one shows that a complex drug is truly similar (given their heterogeneous nature at the molecular level) to a marketed medicine without doing a clinical trial. Very minor changes in recombinant proteins can result in their becoming immunogenic, with potentially disastrous consequences for patients.

Amgen, in seeking to defend their own rheumatoid arthritis treatment from biosimilars, took a different legal tack than Abbott in order to protect their blockbuster’s sales. The original Immunex patent on etanercept (Enbrel) was issued in 1996 and is due to expire in 2013; worldwide sales were approximately $7.2 billion in 2010. Enbrel competitors were massing on the sidelines, getting ready to start selling their own versions of this bellwether treatment. Competitors (including Merck BioVentures) were thwarted in late 2011 when Amgen received another patent on etanercept (via a patent application that Immunex had licensed from Roche) that extended its legal protection until 2028. Amgen’s competitors may choose to fight the new patent, or develop altered versions of this medicine that will enable them to get around it. Any “improved” version of Enbrel will likely need to undergo clinical trials before the FDA could approve it. This requirement would raise the cost of entry significantly, and may be sufficient to keep out all but the biggest biopharma players.

Outside of the U.S., competitors have already begun selling etanercept biosimilars in countries where intellectual property concerns were not an issue. A biosimilar version of Enbrel known as Yisaipu is currently available in China, where intellectual property protections have often been ignored in the past. A significant recent change in Chinese patent laws now empowers the Government “to issue compulsory licenses to eligible companies to produce generic versions of patented drugs during state emergencies, unusual circumstances, or in the public interest [emphasis mine]”. If implemented, this could give Chinese companies wanting to make and sell biosimilars in their home market free rein to ignore intellectual property held by other drug makers in China.

There’s no way to predict how this biosimilar battle is going to play out. Any decision that the Supreme Court makes regarding the Affordable Care Act could impact Abbott’s petition with the FDA. The only thing that can be stated with assurance is that some lawyers are going to be pocketing bucketfuls of cash. There is much more at stake here beyond future Humira revenues that are potentially at risk. If Abbott’s assertion is upheld that biosimilars should not be allowed because of the need to protect trade secrets, then it would virtually guarantee a perpetual monopoly for the makers of most biologics. Some have argued that patents on drugs should be forever, a view I strongly disagree with. Amgen’s patenting/licensing strategy will likely protect Enbrel from competition for some 32 years, meaning they will be milking this cash cow for many years to come. Blocking the introduction of biosimilars into the marketplace is simply a bad deal for the health care system. As activist Lawrence Lessig put it (in a different context) “Before the monopoly should be permitted, there must be reason to believe it will do some good – for society, and not just for monopoly holders”.

Stewart Lyman is Owner and Manager of Lyman BioPharma Consulting LLC in Seattle. He provides strategic advice to clients on their research programs, collaboration management issues, as well as preclinical data reviews. Follow @

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  • http://www.lymanbiopharma.com/ Stewart Lyman

    The US Supreme Court ruling on Thursday has upheld the BPCIA part of the Affordable Care Act. This means that Abbott is likely to continue on its path of attempting to block biosimilars from entering the US marketplace. It will take time for all of this to sort out, but it looks like the upcoming battle described above is indeed on!