The Swine Line: The Staff Blog of Citizens Against Government Waste

Supreme Court’s Decision on Biosimilars is Precedent Setting

The Swine Line is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.

Yesterday, with little notice, a big decision was made by the Supreme Court of the United States.  Their ruling means biosimilars, or “generic” versions of biologic drugs, will be able to be marketed immediately after approval by the Food and Drug Administration (FDA), just as Congress intended.  The decision will save consumers and taxpayers billions of dollars.

Biologic drugs can be manufactured from human, animal, or microorganism sources.  Biopharmaceuticals are providing highly effective and life-saving treatments for many chronic and debilitating illnesses, such as cancer, inflammatory diseases, and diabetes.  But, these drugs can also be very expensive due to their complexity and development costs.  That’s where biosimilars can help.

Biosimilars are to brand-name biologics as generics are to brand-name chemically-based drugs.  The 1984 Hatch-Waxman Act provided a pathway for shortened FDA approval times for generic drugs, since safety and efficacy studies had already been conducted by the brand-name drug companies.  There was not a similar abbreviated pathway to bring biosimilars to the marketplace until 2010, when the Biologics Price Competition and Innovation Act (BPCIA) was signed into law as an amendment to the Patient Protection and Affordable Care Act.  Now, manufacturers can submit biosimilar drug applications to the FDA under the shortened process and receive FDA approval once a brand name biologic’s patent and market exclusivity has expired.

One of the biggest issues in crafting BPCIA was how much time should be allowed for market exclusivity so a manufacturer could recoup an average $1.2 billion investment to research and develop its biologic.  Rep. Anna Eshoo (D-Calif.), who had worked on developing a biosimilar pathway, has repeatedly stated in testimony before congressional committees and news columns that the exclusivity time for biologics was 12 years, as stated in the BPCIA.

On March 6, 2015, the FDA approved the first biosimilar in the United States, Sandoz’s Zarxio, under the BPCIA regulatory pathway.  Zarxio is the biosimilar for Amgen’s Neupogen, which has been on the market since 1991, and is used to boost the growth of neutrophils, a type of white blood cell that fights infections.  The drug is often used during chemotherapy or radiation treatments.

Under BPCIA, the biosimilar applicant must give a 180-day notice to the inventor of the biologic drug prior to commercial marketing.  Sandoz did this when it informed Amgen on July 8, 2014 that it had filed a biosimilar application with the FDA.  Sandoz expected the biosimilar would be approved by mid-2015, and that it would sell its drug immediately upon receiving a license to do so.  Amgen sued and argued that Sandoz had not followed BPCIA requirements and that a 180-day notice must be given after FDA approval.  The Federal Circuit Court agreed with Amgen’s interpretation of the law regarding the 180-day notification and Sandoz had to wait before it could sell its biosimilar.  The matter than went before the Supreme Court.

Citizens Against Government Waste, along with AARP and other amici curiae, filed an amicus brief arguing that the Federal Circuit Court’s interpretation was incorrect and that the law was clear – the biosimilar should have been allowed to be marketed immediately after FDA approval.

On April 26, 2017, the Supreme Court heard Sandoz Inc. v. Amgen Inc. (15-1039).   If the lower court’s opinion was upheld, the result would have been an additional six months of market exclusivity for Amgen, unnecessarily costing taxpayers and consumers billions of dollars.

Fortunately, the Supreme Court ruled unanimously that biosimilar manufacturers will not have to wait an additional six months after FDA approval to market their drug.  Justice Clarence Thomas wrote the opinion, stating that a biosimilar manufacturer could give notice to market their pharmaceutical before obtaining a license from the FDA and that “Amgen’s contrary arguments are unpersuasive, and its various policy arguments cannot overcome the statute’s plain language."

Thanks to the Supreme Court, future manufacturers will not have to wait an additional 180 days after FDA approval before they can market their biosimilar drugs and consumers will be able to benefit from the competition and the savings.

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