Biosimilar Battles At The State Level
By Anna Rose Welch, Editorial & Community Director, Advancing RNA
Ten years ago, Express Scripts began to hear concerns about the rising cost of biologics from its clients (i.e., state/local governments, employers, health plans). In response, the pharmacy benefit manager (PBM) began engaging in the biosimilars debate. However, an important legal mechanism was missing at the state level. Without this mechanism, there was no guarantee that biosimilars would become part of the drug pricing solution. In his presentation at the GPhA Biosimilars Council’s Leading on Biosimilars conference, Jonah Houts, VP of corporate government affairs, Express Scripts, stated, “When the time came for a biosimilar to be dispensed at a pharmacy counter, there would be no legal mechanism for substitution. We didn’t want 50 miniature FDAs on a state level deciding how pharmacy should be practiced when it relates to biosimilar drugs. We were charged by our plans, employees, and patients, to create that avenue and mechanism.”
While Houts thought working on federal law, specifically the Biologics Price Competition and Innovation Act (BPCIA), was the hardest task he’d face in his career, he encountered a whole new level of difficulty when addressing state government affairs to promote biosimilar use.
The States’ Responses To Biosimilars
At the start of the biosimilar conversation, there were already substitution laws in place for small molecule generics based on the FDA’s Orange Book. Because biosimilars were not going to be listed in the Orange Book, it became apparent there would need to be a new set of substitution laws specifically for biosimilars. However, health plans and pharmacies voiced some surprising responses to the need for substitution laws. Some of these parties argued the science wasn’t advanced enough to support substitution. Others called attention to the numerous guidances still being drafted behind the FDA’s closed doors. These groups were advocates of waiting until more information had been released from the FDA before addressing state legislature. There were also several claims that changes in the law were unnecessary.
In addition to these stakeholders, “We also couldn’t find any state or constitutional lawyer who supported the interpretation that when the BPCIA deemed a drug interchangeable, it could be considered substitutable at the state level,” Houts explained.
Working with state lawmakers posed quite a few challenges. Houts emphasized how differently the states operate compared to the federal government. For one, the states have short sessions — as short as 30 days — for an entire year of legislative business. This abbreviated schedule is because state governments are made up of part-time lawmakers. They do not have staff, let alone subject matter experts on biotechnology.
So, while Founding Father Alexander Hamilton stated, “Here, sir, the people govern,” as Houts pointed out, biotechnology is not commonly understood among the people. “How are we going to talk about these drugs made out of Chinese hamster ovarian cells and how a pharmacist should be able to just substitute one for the other at your local drugstore?”
Indeed, teaching state government officials about biotechnology got off to a rough start, and Houts’ descriptions of the responses he received drew laughter from listeners. When arguing in favor of the biosimilar pathway and new substitution laws, Houts was accused of murder. And, even worse in the pharma world, he was accused of encouraging people to mix chemicals in their garages and to sell those concoctions to the pharmacy. Of course, these claims did not halt Express Scripts or Houts on their mission. In addition to Hamilton, Houts channeled another source of inspiration, Taylor Swift, when he said, “We ‘shook it off.’ That’s what we had to do.”
The Negotiations: Arriving At State Legislation
There were several terms upon which a majority of stakeholders agreed. There was general agreement that, for the sake of consistency, substitution laws for biosimilars should mirror the laws for small molecule generics substitution. “There already are 50 different ways of practicing pharmacy in the states,” Houts explained. “We wanted to keep them as harmonious as possible.”
As such, stakeholders in discussion with Express Scripts believed the pharmacist should have the ability to substitute an interchangeable (not a non-interchangeable) biosimilar at the pharmacy. At the same time, however, the prescriber should have the right to determine what is ultimately prescribed. Physicians, therefore, would still have the option of specifying “dispense as written” or “brand medically necessary” when prescribing a biologic.
The largest point of contention amongst the various stakeholders, however, was whether it was necessary to let prescribers know which drug was dispensed. And, if this disclosure was necessary, how exactly should the pharmacy alert the prescribing physician that a biosimilar had been prescribed? Interestingly, this question resulted in a number of contradictory messages from doctors. Some doctors were adamant they be alerted to the substitution of a biosimilar. Others said they didn’t want to be responsible for that information. For those concerned about the environment, perhaps you’ll appreciate the third argument that it would be a waste of paper to send over this information, because doctors are not the ones checking the fax machines.
In the end, roughly two years ago, Express Scripts, along with a group of generic and brand manufacturers, as well as trade organizations, agreed to compromise. Together, the parties agreed it was important for the prescriber to know what had been dispensed. Therefore, this information must be made available via an electronic record for the prescriber. For those of you who are concerned about adding an additional step into the prescribing of biosimilars, I’d argue it’s quite modest compared to earlier versions of the legislation. For instance, Houts said early versions of the legislation specified pharmacists needed to have a phone conversation to notify the doctor of substitution. This way, the doctor could have the opportunity to object to a substitution or change the pharmacist’s mind.
What’s On The Horizon For State Substitution?
Houts showed the audience a map of the U.S. with the states currently permitting biologic substitution highlighted in blue. He told the audience to think about the map in terms of electoral delegates. “The biosimilar substitution law has won the presidency with 313 electoral votes,” Houts said. “And this all occurred in just the last five years.” Indeed, last October, there were only 11 states and Puerto Rico that had passed substitution legislation. There are now 24 that have approved this legislation, and six states just introduced it in 2016.
Michigan and Ohio are states Houts expects to see pass biosimilar substitution laws by the end of this year. In addition, Express Scripts is keeping its eyes on 14 other states that are well on their way to considering, or reconsidering, a biosimilar substitution law, including New York, South Carolina, Minnesota, and Nevada. However, the biggest challenge with these states will be working with their boards of pharmacy.
“Boards of pharmacy will have a lot to say about biosimilar substitution, because they are responsible for interpreting their states’ Pharmacy Practice Acts,” Houts explained. In fact, some state pharmacist associations may approach substitution laws from a “purist” mindset. They may be adamant the same procedures for substituting generic drugs also work for interchangeable biosimilars. “That’s going to be untenable for a great many companies and lawmakers,” warned Houts.
2017 Tailwinds And Headwinds
It may have taken a long time, but it’s safe to say biologics have been accepted as a rigorously tested and regulated form of treatment. As Houts put it, “We’re no longer talking about biologics like space odysseys.” The same is true for biosimilars in the U.S. Biosimilars are no longer a theoretical or academic discussion; they are more regularly being recognized as valuable assets.
In addition, increased comfort with electronic prescribing offers promise for the distribution and tracking of biosimilars. Some states, such as New York and Maine, have mandated the use of electronic prescribing. But I was also encouraged by Houts’ discussion of electronic prescriptions because of the important role they played in the record uptake of biosimilars in Norway. According to Dr. Steinar Madsen of the Norwegian Medicines Agency, electronic prescriptions enabled one hospital doctor to easily recall prescriptions for all of the hospital patients taking etanercept, replacing the reference drug with the biosimilar. As I wrote in an article about Norwegian biosimilar uptake, this action resulted in 80 percent uptake for biosimilars in two counties.
Even though these tailwinds are encouraging, Houts called attention to headwinds that could slow the uptake of biosimilars in the U.S. “Traditional tools to promote the use of generic drugs are currently being threatened by state and federal campaigns,” he said. For instance, there have been a number of discussions surrounding co-payments, co-insurance, and out-of-pocket costs in deductibles. Some states have begun discussing capping these costs. In fact, some states have thought about capping these costs for a full month, not just per prescription. If these laws are enacted, Houts warned that patients who reach their monthly out-of-pocket costs in the beginning of the month would no longer have incentive to use lower-cost drugs.