New reports suggest that while generic drug makers are aggressively consolidating in the United States and United Kingdom, smaller generic drug manufacturers’ viability is threatened, forcing them to seek niche therapeutic areas. Manufacturing biosimilar biologicals may be an answer for the smaller generic drug companies, due to several factors. First, while manufacturing complexities create market entry barriers, recent shortages of the biologics supply in the U.S. have increased the market demand. Also, low margins are causing large manufacturing companies to exit the biologics market. Furthermore, the patents for many top selling biologics will expire in the next 3 to 5 years, creating an opportunity for new market entrants. Finally, the new abbreviated approval pathway for biosimilars in the U.S. may be more conducive to the needs of smaller firms: efficient approval process, lower development costs, and protection for first generation biologics.
In an effort to encourage biosimilar innovation, the Patient Protection and Affordable Care Act (“PPACA”), passed in 2010, amended the Public Health Services Act, providing an abbreviated marketing approval pathway for biosimilar biologics. According to the PPACA, biosimilar biologics are products that are similar to biologics previously approved by the U.S. Food and Drug Administration (“FDA”), and which have no differences in safety, purity and potency, in comparison to the originator biologics.
Prior to the passage of the PPACA, in the U.S. there was no abbreviated process specifically dedicated to follow-on biological products that allowed for an applicant to rely on safety and efficacy information of previously FDA approved biologics. In the past, the abbreviated approval process available for manufacturers of biologics was under the Food Drug and Cosmetic Act (“FDCA”), and was applicable only to a small subset of biologics regulated as drugs under the FDCA. However, the abbreviated new drug approval pathways have proven to be burdensome and difficult for biologics manufacturers to use, due to the differences in the properties of chemical drug products and biologics.
Under PPACA, the new abbreviated approval process for follow-on biologics sets forth general approval requirements, as well as requirements to show that the biosimilar is “interchangeable” with the predecessor biologics. Furthermore, the FDA has the ability to waive data submission requirements related to analytic, animal and chemical studies. In addition, time frames have been established as to when a follow-on biologic application can be considered, following the approval of the original reference biologic. The PPCA also extends the exclusivity period by 6 months for biologics that receive marketing approval for treatment of pediatric populations, which again may encourage development for the pediatric treatments. For follow-on biologicals that are “interchangeable” with the reference products, a one-year exclusivity right is granted to the first generation biosimilar, with time periods built-in to that, in the case of a patent dispute.
Most recently, separate legislation provides for implementation of biological product user fees, to allow for increased resources for faster review by the FDA. Only time will tell whether the new abbreviated pathways will help or hinder the smaller firms that specialize in this niche area.