©2014 Novation Confidential.1

Steven Lucio, PharmD, BCPS

December 9, 2015

A Clinician’s Perspective

Introduction to Biosimilars

©2014 Novation Confidential.2

Question #1: Why Do We Need Biosimilars?

©2014 Novation Confidential.3

Medication Costs in the US Continue to Increase! SURPRISE!?!?!!?

• Spending on pharmaceuticals reached $374 billion, an increase of 13.1%

• Largest increase since 2001

• Price increases for “protected” brands increased spending $26.3 billion

• Compared to $11.9 billion lower spending due to loss of patent exclusivity

• New medicines for hepatitis C, multiple sclerosis, cancer, and diabetes drove over $21 billion in increased spending

Report available at: www.imshealth.com/portal/site/imshealth/menuitem.762a961826aad98f53c753c71ad8c22a/?vgnextoid=3f140a4331e8c410VgnVCM1000000e2e2ca2RCRD&vgnextchannel=736de5fda6370410VgnVCM10000076192ca2RCRD&vgnextfmt=default, accessed, October 31, 2015.

©2014 Novation Confidential.4

How Much Have Drug Prices Increased? (Oncology Example)

• Letter from 118 physicians of the Mayo Clinic, calling for lower prices of oncology drugs

• In the US, the average price of new cancer drugs increased 5- to 10- fold over 15 years, to more than $100,000 per year in 2012.

• The cost of drugs for each additional year lived (after adjusting for inflation) has increased from $54,000 in 1995 to $207,000 in 2013.

• In 2014, all new FDA approved cancers drugs were priced above $120,000 per year of use.

Mayo Clin Proc. 2015;90:996-1000.

©2014 Novation Confidential.5

The Value of Generic Drugs

• From 2004 to 2013, generic drugs have saved the U.S. health system approximately $1.5 trillion

• $239 billion saved in 2013 alone

• $140 billion saved in 2013 due to new generic introductions

• 86% of prescriptions dispensed in the US are filled with generic drugs

Report available at www.gphaonline.org/media/cms/GPhA_Savings_Report.9.10.14_FINAL.pdf, accessed October 31, 2015

Top Pharmaceutical Sales (2010)

When Small Molecule Drugs Dominated Drug Spend

    Drug US Sales (millions)

1 SM Clopidogrel (Plavix®) $6,154

2 SM Atorvastatin (Lipitor®) $5,329

3 SM Fluticasone/ salmeterol inhaler (Advair®) $4,026

4 SM Aripiprazole (Abilify®) $3,606

5 SM Pioglitazone (Actos®) $3,582

6 B Etanercept (Enbrel®) $3,304

7 SM Montelukast (Singulair®) $3,219

8 SM Quetiapine (Seroquel®) $3,107

9 B Infliximab (Remicade®) $3,099

10 B Bevacizumab (Avastin®) $3,068

SM = small molecule drug, B = biologic drug

EvaluatePharma. Available at info.evaluategroup.com/rs/evaluatepharmaltd/images/SV2014.pdf. Accessed July 2015.

Top Pharmaceutical Sales (2014)Biologics Now Represent More Top Spend Pharmaceuticals

 Drug US Sales (millions)

1 SM Sofosbuvir (Sovaldi®) $10,098

2 B Adalimumab (Humira®) $6,078

3 SM Glargine insulin (Lantus®) $5,759

4 B Etanercept (Enbrel®) $4,311

5 B Infliximab (Remicade®) $4,154

6 SM Aripiprazole (Abilify®) $3,886

7 B Rituximab (Rituxan®) $3,707

8 B Pegfilgrastim (Neulasta®) $3,523

9 SM Fluticasone/ salmeterol (Advair®) $3,325

10 B Bevacizumab (Avastin®) $2,928

SM = small molecule drug, B = biologic drug

EvaluatePharma. Available at info.evaluategroup.com/rs/evaluatepharmaltd/images/SV2014.pdf. Accessed July 2015.

©2014 Novation Confidential.8

Answer: It’s complicated!

Question #2: When can we Expect the First Generic Biologic Drug?

©2014 Novation Confidential.9

While Many Biologic Drugs Are Nearing The End of Their Exclusivities

Adapted from IMS Health. http://www.imshealth.com/deployedfiles/imshealth/Global/Content/Healthcare/Life%20Sciences%20Solutions/Generics/IMSH_Biosimilars_WP.pdf. Accessed June 2015.

Adalimumab (Humira)

Etanercept (Enbrel)

Infliximab (Remicade)

Insulin Glargine (Lantus)

Rituximab (Mabthera)

Bevacizumab (Avastin)

Interferon Beta-1A (Avonex, Rebif)

Trastuzumab (Herceptin)

Glatiramer Acetate (Copaxone)

Ranibizumab (Lucentis)

Pegfilgrastim (Neulasta)

0 1 2 3 4 5 6 7 8 9 10

9.1

7.7

7.5

7.1

6.2

5.6

5.4

5.1

4.7

4.2

4.2

Global Sales 2013, US$ BillionEU Expiry

DateUS Expiry

Date

2018 2016

2015 2028

2015 2018

Expired Expired

Expired 2016

2019 2017

Expired Expired

Expired 2019

2015 Expired

2016 2016

2015 Expired

©2014 Novation Confidential.10

N Engl J Med 2011;365:385-388.

Biologic Drugs are Much More Complex Molecules

Aspirin Monoclonal antibody biologic

©2014 Novation Confidential.11

Biologics Are More Difficult to Manufacture (and Subject to Variability)

• Very complex manufacturing steps that require various stages of purification, production, and validation

• Rely on living organisms

• Any modification can alter the final structure and function of the protein

• Due to the size, complexity, and inherent variability of biologics, can only create “highly similar” or “biosimilar” version of originator molecule.

• Well understood organic medicinal chemistry reactions

• Since the product is less complicated, easier to ensure structure is not altered due to manufacturing changes

• Given simplicity of the molecules, it is possible to create a “generic” or bioequivalent version.

Small molecule drugs Biologic medications

NCCN biosimilars white paper, J Natl Compr Canc Netw. 2011;9(suppl 4):S1-S22.

©2014 Novation Confidential.12

Due to Differences in Small Molecules and Biologics, Different Legislation Was Needed

Hatch-Waxman, 1984 Biosimilars Act, 2010

http://www.gpo.gov/fdsys/pkg/STATUTE-98/pdf/STATUTE-98-Pg1585.pdf; http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/UCM216146.pdf

©2014 Novation Confidential.13

Answer: That’s a great question!

Question #3: How easy will it be to adopt and use biosimilars?

©2014 Novation Confidential.14

Differentiating Generics and Biosimilars

Key Attributes Generics Biosimilars

Approval No clinical trials required Must conduct at least one trial

Indications (Uses) Same as originator May not include all indications

Same generic name Yes Probably not

Interchangeable Yes, upon approval Possible, but not granted immediately

Cost to develop $1 to $4 million $100 to $250 million

Price discounts 50% to 90% 15% to 30%

Formulary Review Required No Yes

Role of the Branded Company

Limited or non-existent Prominent

Lucio SD, Stevenson JG, Hoffman JM. Biosimilars: implications for health-system pharmacists. Am J Health Syst Pharm. 2013;70(22):2004-2017.

The Mystery of InterchangeabilityBiosimilar Interchangeability (per FDA) Means

• The interchangeable biosimilar can be expected to produce the same clinical result in any given patient,

• Can be substituted without the intervention of the health care provider (states may have different ideas)

• For a biological administered more than once to a patient, the is no greater risk of switching or alternating between products (biosimilar and originator), than using the originator without switching

http://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApproved/ApprovalApplications/TherapeuticBiologicApplications/Biosimilars/ucm241719.htm

The Mystery of InterchangeabilityWhat Do We Mean By Generic Interchangeability

• Generic drug – A drug that is identical – or bioequivalent – to a brand name drug in dosage form, safety, strength, route of administration, quality, performance characteristics and intended use.

• “Therapeutic equivalence” code (ie. “A” rating)

• Metformin, simvastatin, linezolid, vancomycin

Understanding Generic Drugs, www.fda.gov

The Mystery of InterchangeabilityCan all Generic Drugs be Substituted?

• Critical dose drugs – Drugs in which comparatively small differences in dose or concentration may lead to serious therapeutic failures and/or serious drug reactions

• Examples

• Coumadin vs. warfarin

• Prograf vs. tacrolimus

• Anti-seizure medications

ACCF/AHA 2011 Health Policy Statement on Therapeutic Interchange and Substitution, available at: http://circ.ahajournals.org/content/124/11/1290.extract

©2014 Novation Confidential.18

Examples of Therapeutic Interchange Of Distinct Molecules

• Topic agents to prevent of slow bleeding (i.e. thrombins)

• Intravenous immune globulins

• Injectable and oral anticoagulants

• Antifungals

• Echinocandins

• Lipid amphotericin B

• Injectable antibiotics

• Diabetes

• Insulins

• Inhalers

• Asthma

• COPD

• Cholesterol

• Statins

• PCSK9 inhibitors?

• Human growth hormone

Non-acute setting Acute care/Hospital setting

Where do biosimilars fit on the continuum of interchangeability and substitution?

©2014 Novation Confidential.19

How Much Progress Have We Made in the Last Five Years?• One official biosimilar approved

• Filgrastim-sndz (Zarxio; Sandoz), competing version of branded product Neupogen (filgrastim; Amgen)

• Six other biosimilar applications pending before the Food and Drug Administration; one application received complete response letter

• Many unknowns remain

• When will additional biosimilars be approved?

• Will more complex biosimilars be approved for all of the uses of the branded biologic?

• What will biosimilars be called? (naming)

• What information is required to deem a biosimilar interchangeable?

• How will FDA’s decision align with actions of state legislatures?

• How will biosimilars be labeled?

Novartis (press release), September 3, 2015; The Pink Sheet, Pending Biosimilar FDA Performance Tracker, accessed December 1, 2015.; http://www.fiercebiotech.com/story/novartis-comes-enbrel-latest-biosimilar-shot-amgen/2015-10-02

©2014 Novation Confidential.20

Challenges for Physicians and Others

• Lack of familiarity with the biosimilar paradigm and the processes for biologic manufacturing and approval

• Differences between small molecule drugs and biologics

• Inherent variability of all biologics (branded and biosimilar)

• Understanding of the biosimilar approval pathway

• Appropriate extrapolation of indications

• Absence of final definition for critical biosimilar attributes

• In the absence of definition, many organizations attempting to define the narrative of biosimilars

• Acceptance of the biosimilar paradigm includes a willingness to trust more in analytical evaluation rather than relying solely on clinical studies

• Many aspects of the financial attributes of biosimilars (costs and reimbursements) remain to be defined

©2014 Novation Confidential.21

Challenge (Sorting Through the Messages)

• Genentech

• AbbVie

• Janssen Biotech

• Pfizer

• Amgen

• Branded Companies • Generic Companies

• Hospira

• Teva

• Sandoz

• Apotex

Biosimilar Companies?• Teva• Sandoz• Amgen• Pfizer• Baxalta• Celltion

©2014 Novation Confidential.22

The “Biosimilar” PyramidAnimal Studies

Clinical Immunogenicity

Clinical Knowledge

(e.g., Post-Market Experience)

Human Pharmacokinetics

and Pharmacodynamics

Structural and Functional Characterization

The more work you do here…

…the less you should have to do

here.

Adapted from FDA Webinar: Biosimilar Biological Products

Biosimilars Balancing ActHow do clinicians become comfortable relying on analytical data to greater extent?

©2014 Novation Confidential.24

Summary

• The biosimilar pathway continues to progress, even though at a less than desirable pace.

• The increasing costs of pharmaceuticals necessitate that a concerted and continued effort be made to support biosimilar introduction and use in order to create competition and lower comparative expense for similar biologic drugs.

• Health care organizations and providers will have to invest greater resources to biosimilar evaluation prior to use than what currently occurs with generic drugs.

• Regulatory, legal, financial, and clinical practice factors will all influence the extent to which biosimilars are truly viable in the US.