Big Molecule Watch
May 29, 2015

Biologics, Biosimilars, and the Biologics Price Competition and Innovation Act (“BPCIA”): A Short Primer

Below we provide a short introduction to the world of biologics and the BPCIA. For a more comprehensive guide on biosimilars, check out Goodwin Procter’s Biosimilars: A Guide to Regulatory and Intellectual Property Issues.

What are biologics?

Biologics are medical products such as vaccines, therapeutic proteins, and gene therapies that are made from natural (as opposed to chemical) sources. Biologic drug products often represent the forefront of biomedical research, and have long promised to provide effective treatments for diseases that conventional small-molecule drugs have been unable to sufficiently treat. For example, biologics have been used to treat a number of chronic and often fatal diseases such as Crohn’s disease, rheumatoid arthritis, lupus erythematosus, psoriasis, and various cancers.

They are also much costlier to develop than conventional small-molecule drugs, and are thus typically more expensive than small molecule drugs. For example, monocolonal antibodies are more complex biologics that are typically manufactured via fermentation using living organisms such as bacteria or yeast; slight changes in cell cultures, fermentation conditions, and other components of manufacturing can lead to clinically significant changes in the resulting biologic. The complexity involved in developing and manufacturing such products is reflected in the development costs: $75-200 million in estimated costs, compared to about $2-6 million for developing small molecule generic drugs.

What are “biosimilars”?

Biosimilars are drug products that are intended to be clinically similar to, or interchangeable with, an existing biologic product.  In this sense, biosimilars may be analogized to “generics” for small molecule drugs, in that they may provide lower-cost alternatives to already-approved biologic brand-name drugs.  However, the analogy should not be taken too far: unlike generic small molecule drugs, biosimilar products cannot be automatically substituted for the referenced brand product unless (1) they are licensed as “interchangeable” with the reference product, and (2) the state in which the substituting pharmacy is located has adopted the requisite automatic substitution laws.

Governments in the EU, Japan, India, and Korea have facilitated the development of biosimilars by implementing abbreviated regulatory pathways for the approval of biosimilars. The U.S. joined this international trend and adopted its own abbreviated regulatory approval pathway with the passage of the Biologics Price Competition and Innovation Act (“BPCIA”) in 2010. This abbreviated pathway permits a “biosimilar” product to be licensed on less than the full complement of preclinical and clinical test data normally required for FDA approval of a new biologic product.

Under the BPCIA, a biologic product can be licensed as “biosimilar” to an already-approved biologic by showing that the product “is highly similar to the reference product notwithstanding minor differences in clinically inactive components” and that “there are no clinically meaningful differences between the biological product and the reference product in terms of the safety, purity, and potency of the product.” 42 U.S.C. § 262(i)(2).

A biosimilar can also obtain “interchangeable” status from FDA. This requires applicants to meet a higher standard, because “interchangeability” status allows the product to be substituted for the reference product without the healthcare provider’s intervention (in states that have adopted automatic substitution laws). To be approved as an interchangeable product, the applicant must show that the biosimilar product can be expected to have the same clinical result as the reference product in any given patient, and that switching or alternating between the reference and biosimilar products does not increase risks to patients in terms of safety or diminished efficacy. 42 U.S.C. § 262(k)(4).

What is the BPCIA?

The Biologics Price Competition and Innovation Act (“BPCIA”) was signed into law as part of the Affordable Care Act on March 23, 2010, and is codified principally at 42 U.S.C. § 262.

Subsection 262(k) of the BPCIA created an abbreviated licensure pathway for biological products that are shown to be “biosimilar” to, or “interchangeable” with, a reference product that has already been licensed by FDA (see above, “What are Biosimilars?”). The pathway is “abbreviated” because it permits a biosimilar product to obtain FDA approval on less than the full scale of preclinical and clinical test data normally required for approval of a new biologic product.

Subsection 262(l) of the BPCIA also introduced a new scheme to resolve patent disputes involving biosimilar products.  This scheme is colloquially referred to as the BPCIA “patent dance” because it lays out a schedule of timed steps according to which both parties—the biosimilar applicant and the reference product sponsor—exchange certain information and respond to each other’s contentions about potential patent disputes.  The patent dance thus determines when patent litigation may begin, and how much information a party may have before initiating litigation.  These important provisions have been the subject of much of the early litigation concerning the BPCIA, as you can read about in our posts covering the legal arguments in the early case of Amgen v. Sandoz  and on the issues raised on appeal of Amgen v. Sandoz.