On September 3, 2015, Sandoz Inc. (“Sandoz”) announced that it launched the first biosimilar in the United States, Zarxio® (filgrastim-sndz). Sandoz began marketing Zarxio® following a Federal Circuit Order to permit it to launch at risk as of September 2, 2015, despite en banc reviews requested by Sandoz and the reference biologic product’s (RBP’s) holder. Sandoz and the RBP have disputed various provisions of the Biologics Price Competition and Innovation Act (BPCIA) in addition to an ongoing patent litigation that have stalled marketing since its March 6, 2015 FDA approval.

Prior to the launch, there had been much speculation about what price Sandoz would charge in relation to the RBP. Mark McCamish, M.D., Ph.D., Global Head Biopharm and Injectables Development, Sandoz International GmbH, said, for example, at Informa Business, Inc.’s 10th Annual FDA/CMS Summit (reported on here), that pricing would be challenging for biosimilars, but he thought Sandoz’s pricing would not “disappoint.” McCamish explained that when Sandoz launched Omnitrope® (somatropin [rDNA origin]) at a substantial discount, Sandoz observed that sales were slow because the lower price was perceived in the market as lower quality. So in other venues, McCamish also suggested that pricing may be “at parity” to encourage more product substitution, where appropriate.

Also at the FDA/CMS Summit, McCamish explained that one of the biggest misconceptions about biosimilars is the term “biosimilar”, because it communicates “biodifferent.” In his opinion, when a biosimilar is approved, it has essentially the same ingredient as its referenced product. The term itself can create some fear, he explained, which may slow down or prevent market uptake. He acknowledged that the term accurately connotes an inherent variability in biologics, e.g., the reference product is not identical to itself over time as demonstrated by batch-to-batch variability and manufacturing changes over time. As a first mover in the U.S. market, McCamish described Zarxio® as a “real opportunity” and a “wonderful but challenging position”—something Sandoz has done with other biosimilar regulators around the world.

According to reports, Zarxio® will be launched at an initial 15% wholesale cost discount to the RBP, identical to the same discount applied when Zarxio® launched in Europe in 2009. The BPCIA was passed as part of the Affordable Care Act to help encourage lower lost biological products, which represent a large part of the specialty prescription drug spend for payors despite their relatively low population use (estimated around 2 percent of the population). Concurrent with the launch of Zarxio®, Sandoz launched One Source™, a patient service center to provide related support and information.

While FDA determined that Zarxio® is “highly similar” to the RBP, Zarxio® was not submitted for review an interchangeable biosimilar product, which the BPCIA permits to be substituted for the RBP without physician intervention. Given Zarxio®’s modest discount, some have speculated this will put pressure on the RBP to lower its price, which could result in additional discounts by Sandoz. Several other biosimilar applications are still under review by FDA and have been publicly disclosed by the biosimilar applicants.