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Client Alerts

Interchangeable Biosimilars - Time to Reform the Orange Book

October 9, 2012

Client Alerts

Interchangeable Biosimilars - Time to Reform the Orange Book

October 9, 2012

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Bloomberg BNA’s Pharmaceutical Law & Industry Report, October 2012
Terry G. Mahn
Fish & Richardson

In 2011, generic drugs accounted for nearly 80% of all prescriptions filled by U.S. pharmacies. Yet, doctors prescribe generics by name in only about 10% of all prescriptions written, so what accounts for the high percentage of generic sales? The answer lies with state laws and health insurance policies that require prescriptions to be filled with ”therapeutically equivalent” or ”A-rated” generics (i.e. those listed in the Food and Drug Administration’s Orange Book) whenever a brand is named. With ”interchangeable” biosimilars soon coming to market, many have questioned whether the current system is capable of ensuring that these drugs will be properly dispensed in the same way. This begs the question: is it time to reform the Orange Book.

The Biologics Price Competition and Innovation Act (BPCIA) of 2009 introduced the concept of ”interchangeable” biosimilars, which allows biologic drugs to be substituted for the brand without the intervention of a health care professional. This is similar to the Hatch-Waxman (H-W) concept of ”therapeutic equivalence,” which confers substitutability of generic drugs for brand prescriptions, but with one important difference. Interchangeability of biologics is conferred on an indication-by-indication basis whereas therapeutic equivalence under H-W is routinely conferred for all indications. This means that when pharmacists, insurers and pharmaceutical benefits managers (PBM) decide to interchange a biosimilar for a pioneer biologic drug, they will be required to know what indication(s) the biosimilar was approved for and whether the doctor’s prescription was intended to treat one of those indications.

The Orange Book, which is used only for H-W approvals, does not provide ”substitutability” information at the indication level so it cannot accommodate biosimilar approvals in its current form. Therefore, the FDA will have to modify its Orange Book or develop a new drug compendium to deal specifically with biosimilars and interchangeability.

A careful look at the issues suggests that Orange Book reform is the more compelling option. Not only will it unify the important prescribing information for both drugs and biologics, but Orange Book reform also will address a drug substitution issue that has plagued brand manufacturers for years. An example of this is the Orange Book’s false designation of therapeutic equivalence for generic drugs that are not approved for all of the brand’s indications (so-called ”skinny labeled” generics) and which often omit certain safety information from the generic’s label, putting patients needlessly at risk.

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