Substituting Interchangeable Biological Products (Note)

Substituting Interchangeable Biological Products (Note)
By Debra Miller, CSG Director of Health Policy, and Samantha-Jane Harris, CSG Graduate Fellow

Background:

Biological products are a growing class of medicines available to treat disease. Biological products differ from traditional drugs in a few key ways. Biologics are manufactured in living cells, while drugs are manufactured through a chemical process. Many biologics are produced using recombinant DNA technology. Biologics are large, complex molecules, while chemical drugs are much smaller molecules.

A generic drug, a substitute to a brand-name drug developed through a chemical process, is approved by the FDA when analysis demonstrates the same active ingredient, strength, dosage form and route of administration as the brand-name drug. The generic drug becomes available on the market after the patent for the brand-name drug expires. Generic drugs are less expensive. Pharmaceutical companies say the price differential is because the brand-name drugs’ costs must recover companies’ research and development costs.

Biosimilars, interchangeable biologicals and follow-on biologics are the names given to the “generic” versions of brand-name biologics. These substitutes will not be identical to the brand-name biologic due to the complexity of the manufacturing process. According to a 2014 research report prepared for the Connecticut legislature, the difference in price between generic (chemical) drugs and the brand-name reference drug can be as high as 80 percent. However, the development and approval process costs for a biosimilar are much higher and the difference in price between the original biologic and the biosimilar typically ranges from 15 to 30 percent. At least 14 biosimilars are currently approved for use in the European Union.

The FDA was authorized to approve an expedited pathway for biosimilars and interchangeable biologicals in March 2010 when the Biologics Price Competition and Innovation Act of 2009 was included in the Affordable Care Act. The law provides a 12-year patent protection period for brand-name biologics. While draft guidance for the expedited pathway has been released by the FDA, no final guidance has been approved, nor have any biosimilars been approved for sale in the United States. 

Even after an interchangeable biological is approved by the FDA, it must meet additional requirements to be considered “interchangeable.” The FDA must determine that the biosimilar can be expected to produce the same clinical result as the brand-name product in any patient and that it has similar safety risks as the brand-name product. At the point that the FDA deems a biosimilar interchangeable, state law will govern how substitutions will be allowed. The first FDA approval was announced March 6, 2015.

Biosimilar State Laws: First Round in 2013-14

In anticipation of FDA approval of interchangeable biologicals, eight states--Delaware, Florida, Indiana, Massachusetts, North Dakota, Oregon, Utah and Virginia--passed bills in 2013 and 2014 to regulate the substitution of biosimilars for brand-name biologics by pharmacists. In California, a bill was passed in the 2013 session but was vetoed by Gov. Jerry Brown. At least 11 other states have considered bills on biosimilar substitution but failed to approve them.

All eight enacted bills restrict substitution to FDA-approved interchangeable biosimilars. Seven of the eight states provide that a pharmacist or assistant can make a substitution unless the prescribing authority indicates a prohibition against substitution. The Indiana law reverses the substitution assumption and allows substitution if the prescribing authority specifically authorizes it. Virginia’s law specifically provides that the substitution is not allowed if the patient “insists” on the brand-name biologic. The Utah law requires that the purchaser specifically requests or consents to the substitution.

All states require notice to the patient, or the person receiving the medication, of the substitution of a biosimilar for the name-brand prescribed. The Virginia law, the first in nation to be adopted, requires the label indicate the biosimilar name and manufacturer, and if substituted, the brand-name biologic. Delaware also requires the name of the biosimilar on the label.

All states require the pharmacist provide notice to the prescribing authority of a substitution. Indiana adds that that the prescribing authority also be provided the name of the substitution and the manufacturer. Florida’s notification is limited to certain classes of pharmacies placing notice in electronic records.

Record keeping requirements vary across the eight states, from not less than one year to not less than five years for the pharmacies. Indiana, North Dakota, Massachusetts and Virginia also mandate record keeping for the prescribing authority. Utah specifies that the pharmacy record include the name of the substitution and the manufacturer.

Utah’s law is the only one that specifies that it applies to out-of-state mail order pharmacies. Delaware, Florida and Indiana require that the state boards of pharmacy maintain on their public websites a listing of FDA approved interchangeable biosimilars.

Certain provisions of the early laws in Utah and Virginia were set to sunset May 1 and July 1, 2015, respectively. Utah subsequently amended its law in 2015 removing the sunset provision altogether. Virginia provisions requiring pharmacists making a substitution to notify the prescriber within five days did sunset on July 1, 2015, as did the requirement that the pharmacist notify a patient of the retail cost of both the prescribed biologic and the interchangeable biosimilar. The Oregon law sunset the physician (prescribing authority) notification provision Jan. 1, 2016.

State Laws Adopted in 2015

In 2015, 11 states passed legislation addressing interchangeable biological products. Utah amended its 2013 law, removing the sunset set for 2015. Eighteen states and Puerto Rico have passed laws to regulate the substitution of interchangeable biologics. One state, Idaho, made changes to its Board of Pharmacy regulations, bypassing legislation.

In 2014, the leading companies involved in biologic, biosimilar and interchangeable biologics met and agreed to principles related to pharmacist-prescriber communication provisions in state legislation. Eighteen manufacturers of biologics have currently signed on as members of the biosimilar coalition. The principles agreed to are:

  • State pharmacy laws should be updated to enable pharmacy substitution of only interchangeable biologics, as approved by the FDA.
  • In settings where interoperable electronic health records, or EHR, are in place, entry by the pharmacist of the biologic product dispensed shall satisfy requirements for pharmacist-prescriber communication.
  • In instances where EHR  are not yet available, the pharmacist shall communicate the dispensing of a biologic product to the prescriber, using any prevailing means, provided that communication shall not be required where:
    • There is no FDA-approved interchangeable biologic for the product prescribed; or
    • A refill prescription is not changed from the product originally dispensed.
  • Other provisions related to the dispensing of a biologic product shall replicate state law pertaining to small molecule products, including that the patient is aware of the medicine they receive, physicians retain dispense-as-written authority and pharmacy records are retained.

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