Interchangeable Biosimilar Legislation Succeeds in Arizona

Written by Jeff Turner (@jeffturneraz)

Interchangeable Biosimilar Legislation Succeeds in Arizona

“This is where we really see the industry going. You look at the industry in ten years, the market share for this particular area of the pharmaceutical industry is going to grow significantly.”

Jeff Gray, representing the Arizona Pharmacy Association (AzPA), stood at the podium in front of the Arizona House Health Committee speaking to the “biosimilar bill” HB 2310. The six-member committee, three of whom are physicians, listened to him make the case why one provision in the bill that most physicians supported, might be a bit of an overreach.

That provision requires pharmacists to report to a physician every time they substitute a biological drug with an interchangeable biosimilar.

What is a biological drug and/or an interchangeable biosimilar?

First there were Biologics

Biologicals are drugs comprised of plant or animal cells injected with a gene into the host cell’s DNA. They are based on naturally existing proteins in the human body. Each one is engineered to treat a specific molecule or disease. So you have scientists in a lab experimenting with the DNA structure of cellular organisms and pretty much bio-engineering them to tell them what to do.

Biosimilars

Biosimilars are in some ways like the generic version of the biologic, except not really… at least not by definition. Due to the complexity involved with creating living organisms, a biosimilar can never actually be the exact same as the biologic. However, for the purposes of explaining this new innovative medicine, it is sometimes easier to just think of them as the generic version of the biologic. They can be engineered to produce the same outcome as the biologic, without knowing the exact “recipe.”

Interchangeable Biologics

These are a subcategory of biosimilars. That is, they are biosimilars that have met the extremely high FDA approved threshold of being interchangeable with an original biological medicine. What does that involve? It must prove to the FDA that it produces the same outcome as the original biologic. So that means, the same ability to treat the disease, the same safety score, and that it is of the same overall quality.

“Bio-funds”

Now that we know what these drugs are, I would like to briefly mention the cost while we are at it because that is at the heart of the need of an “interchangeable” version of biologics in the first place. Most people rightfully say you can’t put a price on your wellbeing, but a price certainly exists. We could be talking about a treatment that costs, let’s say $10,000 per month to treat.

With biosimilars, the consensus seems to be a savings between 10%-20% depending on what study you look at. You would now be looking at maybe $8,000 per month as opposed to ten thousand, just to give you an idea. If you multiply a $2,000 per month savings, you arrive at $24,000 in a year which could be better spent on a new car, for example. So you can see, the cost savings promises to be huge.

The Legislative Path That Led to Swapping Out Drugs

Hatch-Waxman Act of 1984 (Brand Name Pills vs Generics)

This is the reason you get to choose between the name brand or the generic when you go to the pharmacy today. You can thank the Hatch-Waxman Act for that. Its actual name is the “Drug Price Competition and Patent Term Restoration Act,” pushed through congress by Representative Waxman of California and Senator Hatchof Utah back in 1984 which went onto be signed into law by Ronald Reagan. This set standards for generic drugs that had to be met before being sold to the public. Ever since then, it has been the operating force behind generics and generic substitutions. This language however, does not cover biologics, because while a company can create a biosimilar drug with the same outcome, it is treated as if it were an entirely new drug, because…well, it is.

The Affordable Care Act of 2010 (Biosimilars very own ‘Hatch-Waxman’)

On March 23, 2010, Obamacare was signed into law, which had a provision in it known as the Biologics Price Competition and Innovation Act that opened the doorway to biosimilars as viable competition to their bigger brothers, biologics, much the same as generics were to brand named drugs after the Hatch-Waxman Act of 1984.

In the wake of the Affordable Care Act legislation, 21 states have since passed some form of biosimilar legislation, and not all succeeded on the first try.

Arizona is one of those states

Back to Arizona HB 2310, signed into law this year after having some form of the legislation being pushed for the last four sessions without luck and finally making it through this time in 2016. The bill will allow a pharmacist to replace a prescription written for a biologic (“name brand”) with a lower cost interchangeable biologic(“generic”) as long as the doctor writes “substitution permitted.” The physician still has the freedom to write “dispense as written,” a phrase commonly used when a doctor doesn’t want any other options available to the patient other than the brand they specifically prescribed. If he does this the pharmacist will dispense the exact drug written on the prescription and only that drug, no reporting required. However, if the doctor writes “substitution permitted,” on a biologic prescription, and the pharmacist does substitute, he has a new homework assignment under the new reporting requirement of HB 2310 and it is due within five days or they will have broken the law.

The concept behind this pharmacist mandate to report to the doctor was presented as such that, these drugs are all a little different from batch to batch, so if there are side effects in a patient, we can trace back to which actual batch the patient was given. Okay, fair enough. The drug companies seemed to be okay with this, they have confidence in their product and would like to know if any issues arise with a particular patient, and how to track it down as efficiently as possible. The physicians seemed to be okay with this because after all, they would like to be kept informed on everything about their patient, even though they told that patient to pick whichever version they want, the biologic or the interchangeable biosimilar. Then we have the pharmacies who seem to be bearing the brunt of the regulatory language currently.

The pharmacists are going to be required to ensure they properly notify the doctor of the switch by making an entry that is electronically accessible to the prescriber through an:

  • interoperable electronic medical records system,

  • an electronic prescribing technology,

  • a pharmacy benefit management system, or

  • a pharmacy record.

So what that means is as long as the pharmacist makes electronic entries via one of the methods listed above, they are covered. Not a big deal for one patient maybe, but this industry is promising to ramp up considerably in the coming years. Thankfully most pharmacies probably utilize one of these electronic forms of communication already.

Kelly Ridgway-Fine, CEO of the Arizona Pharmacy Association expressed concerns that what you have here are drug companies, basically coming in and pushing legislation that is suggesting guidance on how the pharmacists and physicians should interact with their (the drug company’s) product. She explained that pharmacies know how to handle these scenarios well and have a long history of working in tandem with prescribing doctors. Also, she stated that the FDA already has guidelines in place that cover how to proceed legally under these circumstances and that the doctor still has all of the same rights as before when prescribing. Should that doctor wish for no changes to be made, they simply need to write, “Dispense as written” as mentioned before and the pharmacists will not make any substitutions.

Considering that the expensive biologic and the cheaper interchangeable biosimilar are both FDA approved, some might say it starts to paint a picture of a physician happily saying to the patient, go ahead… choose the cheaper one if you want. Then, after the fact, suddenly being concerned about something going wrong with the cheaper version. By the way, is any of this making you nervous about the possibility of choosing the cheaper interchangeable given the option?

Don’t Worry Too Soon

Jeff Gray stated in his House Committee testimony that in essence what the Arizona bill was doing was actually more stringent than the FDA guidelines currently in place, and that (and here is the kicker) there currently aren’t even any interchangeable biosimilars available. That’s right, 21 states have some type of biosimilar legislation and you can’t even get an interchangeable if you wanted one right now.

Mr. Gray said that AzPA does foresee biologics being the future of medicine and that pharmacies do want to participate in this new technology, but that they won’t have a chance if government is going to regulate them out of the picture. If the key here is to have biologics and biosimilars available to everyone, you are going to want pharmacies in on the decision making as well as the doctors and the drug makers. In essence, as of now, you have products coming down the pipeline known as interchangeable biosimilars that have passed all of the FDA hurdles to be officially called “interchangeable,” but the focus has somehow shifted onto the pharmacies. You have the doctors who are prescribing these drugs, and the drug companies are producing them, but the pharmacies who are just filling the prescriptions are now put out on a regulatory island by themselves to fight for their own rights in this evolution.

It is certainly a strange turn of events from where this all started four years ago, which for the most part saw a few drug companies, physicians, as well as patient advocacy groups on one side of the table and then the pharmacies, Pharmacy Benefit Managers (PBM’s), generic manufacturers and pharmacists together on the other side.

Jeff Gray says the AzPA ultimately went from being opposed to this year’s HB 2310 to being neutral because they were assured that nothing in their current electronic reporting would need to be changed and determining the physician accessibility of these reporting systems would not be the role of the pharmacist. They also got an “Effective Date” extension. The bill was set to go into effect immediately if and when the governor signed it, which would have been around mid to late May of this year. Having that extension put in through an amendment, however, gave the Arizona Pharmacy Association some breathing room until December 31, 2016 to get their members prepared and educated so there wouldn’t be any confusion or panic in relation to compliance.

If your state doesn’t have this law, it may not be long now.

There seems to be a lot more of this legislation coming in the next few years, and it is likely that all states will soon have this in place in some form or another. Most of the state laws in place so far have had this reporting requirement in them as well. The main argument that the Arizona Pharmacy Association was making was that the FDA is actually the group in charge of approving these drugs for market.

If the main concern of lawmakers is the safety of the “approved switch” from a biologic to a biosimilar at the pharmacy, then maybe the lawmakers should be questioning the drug companies themselves, or more accurately the FDA approval methods, which by all measures, are a very high standard to meet.

We are witnessing the early years of biologics as an option in the health industry and it is truly a mind-blowing technological advance in medicine. These are exciting times and it will be interesting to watch the evolution, not just with the new drugs that will be introduced in the coming years, but also the framework in which people can receive these medicines as it relates to both the health care and economic industry.

Follow Bula Pharmacy Law Tracking for the latest updates on biologic and biosimilar related legislation and regulations.

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