Dr. Scott Gottlieb examines the current regulatory climate for

biosimilars, which are biologic drugs considered similar in composition to, but not necessarily clinically interchangeable with, an innovator product. While prescription of biosimilars has the potential to offer cost savings that can translate into public health benefits through improved access, the inherent complexity of these follow on drugs--significantly greater complexity than that posed by traditional small-molecule drugs--requires a regulatory approach uniquely adapted to the evaluation of these biological products. Dr. Gottlieb discusses the evolution of the European Union's approach to regulating biosimilars as offering one potential model upon which we can design a process that facilitates access to biosimilars while providing assurances of safety. However before such legal and regulatory matters can be addressed, the scientific and public policy communities must reconcile issues related to clinical data requirements and regulatory transparency, patent terms, and the requirements for demonstrating the interchangeability of branded and follow on products.

Resident Fellow Scott Gottlieb, M.D.

The legal and regulatory status of biosimilars (biopharmaceuticals that are considered similar in composition to an innovator product, but not necessarily clinically interchangeable) is a health policy issue currently under consideration by the Food and Drug Administration (FDA) and U.S. legislators on Capitol Hill. The establishment of a pathway for enabling the approval of biosimilars through an abbreviated regulatory process, and, in certain cases, for demonstrating their therapeutic equivalence and interchangeability with innovator products (i.e., originator), has the potential to provide meaningful cost savings to healthcare consumers and the government that could translate into public health benefits from improved access. To wit, enabling the aproval of follow-on proteins through an abbreviated regulatory process, after the intellectual property on the originator protein has lapsed, could enable price competition between similar products. In addition, the follow-on product could presumably be priced lower than the originator as a consequence of the follow-on product's lower development costs. The ensuing competition among multiple manufacturers, and additional incentives this will generate for innovators to develop improved versions of existing proteins, could generate still more public health benefits. However, the cost savings probably are not as large as some have estimated. Some current estimates, which envision substantial cost savings, extrapolate from experience with small-molecule generic drugs. This is not an appropriate economic comparison given the scientific and clinical differences between protein and small-molecule drugs. But even smaller cost savings, perhaps on the order of 15-30% off of the cost of an originator protein, could be meaningful. This magnitude of savings mirrors the experience seen in protein drug categories that have benefited from multiple product introductions. As such, it may be a more realistic estimate of the potential savings from biosimilars. This more conservative estimate should not dampen enthusiasm for a thoughtful process for enabling the approval of safe and effective biosimilars proteins. Proponents of the creation of an abbreviated regulatory pathway for FDA approval of biosimilars have every reason to view such a process, and the potential for cost savings, as an important public health goal.

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Scott Gottlieb, M.D., is a resident fellow at AEI.