Biosimilar regulatory framework in the United States. Early regulation of generic nonbiologic drug products in the United States dates to 1984. See Steven Kozlowski et al., "Developing the Nation's Biosimilars Program," 365 New Eng. J. Med. 385 (2011). These regulations, often referred to as the Hatch-Waxman regulations, created a shortened approval pathway for generic pharmaceuticals based on their inherent similarity to brand-name reference pharmaceuticals. The 1984 regulations decreased the cost of various medicines, but focused only on the creation of generic nonbiologic drug products. The regulation of biosimilars would wait until the twenty-first century.
Biosimilar regulation seeks to balance the competing interests of innovation and consumer benefit. Developers of biosimilars seek protections for their innovations, and consumers seek affordable medicine. See Krishnan, supra, at 20. Drug innovators sought protections like marketing exclusivity for generics in the Hatch-Waxman Act. See Terry G. Mahn & Gauri M. Dhavan, "Biosimilars vs. Generics—Major Differences in the Regulatory Model," Pharmaceutical Compliance Monitor (Mar. 13, 2012). The BPCIA provided some of these the necessary protections by offering, for example, a 12-year marketing exclusivity for "interchangeable" biosimilars.
The United States began to regulate biosimilars with the passage of the BPCIA. See 42 U.S.C. § 262(k). The BPCIA aimed to create an abbreviated approval pathway for biosimilar biologics by the U.S. Food and Drug Administration (FDA). See 42 U.S.C. § 262(k)(2)(A). While the law passed in 2009 and was signed in 2010, the FDA did not release regulatory guidelines until 2012. See Krishnan, supra, at 25. Regulating biosimilars has been challenging compared to Hatch-Waxman regulations because regulators had to establish scientific criteria for comparing reference products to biosimilars. See Kozlowski, supra, at 385. To address this, the U.S. system takes a stepwise, balancing approach to biosimilarity that focuses on the "totality of the evidence." See Krishnan, supra, at 25. In its most basic interpretation, the U.S. approach follows a three-prong system:
First, analytical studies are performed to show the high level of similarity between the biosimilar product and the reference product.Krishnan, supra, at 25. Second, animal studies are performed. The animal studies can include toxicity and immunogenicity studies. Finally, human clinical studies are performed, which can include further immunogenicity studies. The focus of the FDA system is to reduce residual uncertainty at each step of the process. See Thomas Kirchlechner, Sandoz Biopharmaceuticals, Biosimilar Regulatory Overview, Presentation at ANVISA Biosimilars Workshop (June 25, 2013). One of the key factors for determining biosimilarity is the immunogenicity of the biosimilar product. See Kozlowski, supra, at 387. The FDA approach allows for analysis of immunogenicity in a risk-based manner that aligns with its aim of eliminating residual uncertainty at each phase of the approval process. See Kirchlechner, supra. On March 6, 2015, the FDA approved its first biosimilar product, Zarxio™. See Press Release, FDA, FDA Approves First Biosimilar Product Zarxio (Mar. 6, 2015).
While distinct from it, the U.S. system was developed with the EU system in mind, as it has existed since 2004 and serves as the basis of biosimilar regulation systems around the world, including those in South Africa.
Biosimilar regulatory framework in South Africa. South Africa is one of the more mature pharmaceutical markets in the developing world. It is also one of the few countries in Africa to establish a regulatory framework for biosimilar products. See Krishnan, supra, at 23. South Africa established its regulatory framework in 2010, basing it in large part on the EU guidelines. Henry M.J. Leng et al., "Regulatory Requirements for the Development and Registration of Biosimilars in South Africa," 4 Generics & Biosimilars Initiative J. (2015).The South Africa guidelines also draw from the World Health Organization (WHO) guidelines established in 2010. The administrating agency of the South Africa biosimilar registration is the Medicines Control Council (MCC), an organization akin to the FDA in the United States.
The South Africa guidelines are less onerous in some ways, with reduced need for nonclinical and clinic testing data to approve a biosimilar product as compared to the reference product. Leng, supra. However, the South Africa guidelines have stricter quality requirements, making more quality data necessary for approval of a biosimilar product than for the reference product. Like most systems, the South Africa guidelines focus on the side-by-side comparability study between the biosimilar product and the reference product. Currently, this entails the two products having identical primary structures, and highly similar post-translational modifications. These quality details match the European Union, Health Canada, and WHO guidelines. See Krishnan, supra, at 22–24, 26–27.
As of July 2015, no biosimilar products had yet been registered in South Africa. Leng, supra. The MCC has received many biosimilar applications for products containing filgrastim, insulin, and other compounds, but has yet to allow any. The MCC's primary reasons for rejecting these applications include unconvincing or insufficient data on the comparability of the biosimilar and reference product, lack of nonclinical studies, and lack of clinical studies or studies yielding insufficient data.
One key area where the South African system is stricter than the U.S. system is that it lacks an "interchangeability" standard. Leng, supra. The South African system does not allow the automatic substitution or interchangeability of biosimilars for reference products by physicians. Under MCC Guidelines for Biosimilar Medicines section 5.2.8, biosimilars cannot be considered interchangeable and should not be substituted automatically for reference products. The lack of interchangeability is in line with the black-letter law of the European system. However, some individual European nations allow substitution of biosimilars for reference products.
Biosimilar-Related Litigation in the United States and South Africa
Two significant cases—one in the United States and the other in South Africa—are worth review. Notably, both cases pitted innovators against parties interested in increasing access to biosimilars.
Amgen Inc. v. Sandoz Inc. In the first case, Amgen Inc. v. Sandoz Inc., 794 F.3d 1347 (Fed. Cir. 2015), reh'g denied, No. 2015-1499 (Fed. Cir. Oct. 16, 2015), petition for cert. filed (U.S. Feb. 16, 2016), the United States Court of Appeals for the Federal Circuit considered the pathway for biosimilar approval under the BPCIA. In doing so, it sought to "unravel the riddle, solve the mystery, and comprehend the enigma" of the BPCIA. Amgen, 794 F.3d at 1351 n.1.
The Amgen case involved the statutory interpretation of several provisions of the BPCIA. In enacting the BPCIA, Congress created an abbreviated pathway for applicants filing biologics license applications under 42 U.S.C. section 262(k), also known as a "subsection (k) application" or an "aBLA." Subsection (k) applicants must demonstrate how the subject product is similar to a previously approved biologic. The applicant must show that the subject product is "safe, pure, and potent," relying in part on the license of the reference product. The BPCIA, however, barred subsection (k) applications for four and 12 years after reference products are first licensed. This, therefore, sought to provide the balance between innovation and consumer interests.
In Amgen, Sandoz filed a subsection (k) application for a drug it intended to call Zarxio, and included Amgen's drug, Neupogen®, as a reference product. Sandoz later notified Amgen that it intended to launch Zarxio upon approval by the FDA. However, in some ways appearing to contradict the language of the BPCIA, Sandoz declined to provide Amgen with its application—choosing not to disclose certain information under section 262(l)(2)(A) of the BPCIA, and informing Amgen that it was free to file a lawsuit against it under section 262(l)(9)(C). Amgen filed suit in the United States District Court for the Northern District of California, alleging, among other things, violation of the BPCIA for failing to disclose information under section 262(l)(2)(A). On March 19, 2015, the district court found in favor of Sandoz as to the interpretation of the BPCIA. An appeal before the Federal Circuit followed.
The central statutory issue—whether subsection (k) applicants are required to disclose information under section 262(l)(2)(A)—was the first issue to be addressed by the Federal Circuit. Amgen argued that the language "shall provide," with reference to the information to be disclosed, made disclosure mandatory. Consequently, Amgen argued, a failure to comply with the mandatory disclosure provision constituted a violation of the statute. Amgen argued that section 262(l)(9)(C)—providing that those in Amgen's position can file patent suits if the subsection (k) applicant does not disclose information under section 262(l)(2)(A)—served as a mere limitation, and not the only remedy contemplated by the BPCIA. Sandoz, on the other hand, argued that section 262(l)(2)(A) merely provides subsection (k) applicants with the option to disclose information, and to take advantage of the provision's shield from later patent suits. Sandoz contended that subsection (k) applicants are free to forgo the protections from patent suits provided by section 262(l)(2)(A) in exchange for the freedom to not disclose information under section 262(l)(2)(A).
A number of amicus curiae briefs were submitted in support of both parties. On behalf of Sandoz, the Generic Pharmaceutical Association (GPhA), in addition to providing guidance as to the merits of the case, pointed out that "[o]n average, biologics cost $45 per day, as compared to $2 per day for traditional, small-molecule drugs." GPhA argued that biosimilars hold the potential of reducing health-care costs in the United States by billions of dollars. AbbVie, a biopharmaceutical company, filed an amicus curiae brief in support of Amgen, which emphasized that "[b]iologics can treat diseases very effectively, but because of their complexity are difficult to develop and manufacture."
Ultimately, the Federal Circuit panel found in favor of Sandoz with respect to whether disclosure under section 262(l)(2)(A) is mandatory. Accordingly, the court found that "[b]ecause Sandoz took a path expressly contemplated by the BPCIA, it did not violate the BPCIA by not disclosing its aBLA and the manufacturing information by the statutory deadline." Amgen, 794 F.3d at 1357.
Pharmaceutical Manufacturers Ass'n of South Africa v. Mandela. The Pharmaceutical Manufacturers case arose out of the HIV/AIDS crises in South Africa in the 1990s. Dr. Harrison Mwakyebe et al., Implications of the TRIPS Agreement on the Access to Cheaper Pharmaceutical Drugs by Developing Countries: Case Study of South Africa vs the Pharmaceutical Companies 21 (Nov. 2001) (research paper, University of Turin). On November 25, 1997, the South African government passed the revised Medicines Act, and it was signed into law by President Nelson Mandela. Strikingly, the revised act gave broad powers to the minister of health to, among other things, enable the importation and sale of generic medication even in cases where doing so would conflict with South Africa's patent legislation. On February 18, 1998, the Pharmaceutical Manufacturers Association of South Africa (PMA), joined by 39 others, filed a lawsuit against the government of South Africa, and certain officials individually, challenging the constitutionality of the revised Medicines Act, and asserting that it violated the Patents Act of South Africa of 1978. Pharm. Mfrs. Ass'n of S. Afr. v. President of Republic of S. Afr., No. 4183/98 (High Ct., Transvaal Provincial Div. filed Feb. 18, 1998).
Three years into the litigation, the court hearing the case granted the Treatment Action Committee's (a nongovernmental organization) application to participate in the proceedings as amicus curiae, despite fierce opposition from PMA. Once the Treatment Action Committee joined the litigation, it "flood[ed] the court's registry with several well-drafted affidavits by leading pharmacists as well as HIV/AIDS patients who made [PMA's] case increasingly difficult." Mwakyebe, supra, at 34. Shortly after, PMA dropped the lawsuit, and the South African government set up a working committee to draft regulations regarding the revised Medicines Act. Ultimately, however, the South African government retained the ability to import cheap drugs from countries such as Brazil and India.
Interchangeability of Biosimilars for Reference Products
One of the key distinctions between the biosimilar regulatory frameworks in the United States and South Africa is the interchangeability of approved biosimilars for reference products. In the United States, approved biosimilars can be automatically substituted for reference products without physician approval. See 42 U.S.C. § 262(i)(3). By contrast, South Africa specifically disallows biosimilar interchangeability with reference products and does not allow automatic substitution. See MMC Guidelines for Biosimilar Medicines § 5.2.8. South Africa has taken a harder line than the European Union, which allows interchangeability but not automatic substitution. See Krishnan, supra, at 30.
The primary concern with automatic substitution is that repeated substitution between the biosimilar and reference product will increase immunogenicity and have adverse, unpredictable effects. Krishnan, supra, at 30. The problem, according to the European and South African systems, is that the differing approval processes for biosimilars coupled with the difficulty in monitoring individual patients make it unlikely that a definitive determination on interchangeability can be made. A further argument for avoiding automatic substitution is the nomenclature of biosimilars in comparison to reference products that may create confusion and place too much discretion in the hands of physicians. This issue is evident by the Federal Trade Commission's comments on the FDA guidelines on nonproprietary names for biologics products. See Press Release, FTC, FTC Staff Provides Comments to FDA on Naming Proposal for Biologic Products (Oct. 28, 2015). It remains to be seen what effect the United States' distinction on this issue of biosimilars will have moving forward.
State of Biosimilar Approval in the United States and South Africa
The United States has only one approved biosimilar to date—Zarxio, made by Sandoz. By contrast, the European Union has approved at least 12 biosimilars as of 2013. See Kirchlechner, supra. As of July 2015, South Africa has not approved any biosimilars. The closest South Africa came to approving a biosimilar was for enoxaparin, which the MCC determined to be a biologic that required clinical testing before approval. See Leng, supra. Interestingly, the FDA came to the opposite decision about enoxaparin when it decided that it could be registered as a generic drug and not a biosimilar. The contrasts between the FDA and the MCC in regulating and approving biosimilars may affect the development of biosimilars in each market. The FDA is eager to begin approving biosimilars due to the influence of pharmaceutical companies in the United States, while the MCC is cautious given Africa's need for affordable pharmaceuticals that produce results.
State of Litigation on Biosimilars in the United States and South Africa
We note that amicus curiae have the potential to play a large role in litigation in both in the United States and South Africa. In Amgen, amici GPhA was able to both reaffirm the district court's interpretation of the BPCIA and include policy-related information including that, regarding the Hatch-Waxman Act, "[a] recent study found that the use of generic drugs saved American consumers, taxpayers, federal and state governments and other payers $239 billion in 2013 alone and over $1.5 trillion between 2004 and 2013." Brief for GPhA, supra, at 4 n.7.
This addition alone may have had an impact on the outcome of Amgen, considering that the Amgen court clearly saw the history of the Hatch-Waxman Act as instructive to the Amgen case. Amgen, 794 F.3d at 1361 n.6 ("[T]his is not the first time that Congress has allowed generic applicants to benefit from the early work of innovators. See Hatch-Waxman Act, Pub. L. No. 98-417, 98 Stat. 1585 (1984). That was a decision that Congress was entitled to make and it did so." (citation omitted)). In the South African context, at least with respect to the Pharmaceutical Manufacturers case, the impact of the amici appear even clearer. After three years of litigation, the case ended after an amici was permitted to enter the case and began to file pleadings and affidavits, which placed pressure on the plaintiffs, shortly after which the plaintiffs settled.
Second, because often the subject matter is, literally, life or death, the optics of any given litigation can have the potential to have wide-ranging impact on both the litigation and the parties involved. It is important not to underestimate the impact of the two underlying, competing themes—innovation and access to medicine—outside the context of any specific litigation. For instance, public perception regarding general safety concerns during the development of the underlying statute led to a major setback in the statute's development. See Krista Hessler Carver et al., "An Unofficial Legislative History of the Biologics Price Competition and Innovation Act of 2009," 65 Food & Drug L.J. 671, 705 (2010). In the Pharmaceutical Manufacturers case, the United States, under intense pressure, among other things, eventually conceded the validity of the underlying act while litigation was ongoing. Stuart Anderson et al., Managing Pharmaceuticals in International Health 139 (2012).
The coming years will likely see an increase in biosimilar-related litigation in both established and emerging markets. This point is underscored by the Amgen case in the United States, the current lack of registered biosimilars in South Africa, and the total lack of biosimilars regulation in other emerging markets. As the bodies of biosimilars regulatory frameworks and biosimilar case law develop, we hope that a more certain balance between the interests of consumers and innovators will begin to emerge.
Keywords: litigation, intellectual property, biosimilars, pharmaceuticals, FDA, South Africa