On September 3, Swiss-based pharmaceutical giant Novartis launched the first American “biosimilar”—a copycat version of a complex biologic drug.  Novartis is offering it’s product Zarxio at a wholesale price that is 15% less than the wholesale price of the product it mimics: Amgen’s biologic cancer drug, Neupogen, that brought in $1.2 billion last year.

Novartis’ introduction of Zarxio has been a long-awaited development in the American pharmaceutical market because it is hoped that Zarxio and biosimilars that follow will mediate the burgeoning costs of biologic drugs. In 2013, $66.3 billion was spent on biologic pharmaceuticals and according to one study, spending on biologics is growing at more than twice the rate of other pharmaceuticals. The costs of traditional small molecule pharmaceuticals is checked by lower-cost generic products in the market, and it is expected that the introduction of competition to the biologic market through biosimilars will decrease prices of biologic drugs as well.

A biosimilar’s relation to the biologic drug is similar to the relationship between generic and brand name traditional small-molecule pharmaceuticals. However, biosimilars differ from generics in one significant respect: while generics of small-molecule pharmaceuticals are identical to the brand-name compounds, biosimilars can never reach this level of precision in mimicking their biologic references. Because biologics are large highly complex molecules produced by the transfer of recombinant human DNA encoding the desired therapeutic protein into living cells, even with patent disclosures of the biologic composition and method of making, without access to the privately-owned cell line used to manufacture the biologic, a biosimilar will inevitably contain variations in amino acid modification and folding of protein structures based on nuances of the cell line employed as well as the fermentation and purification processes used by differing manufactures. Thus, biosimilars are never identical to the FDA approved parent drug.

For decades, there has been an FDA approval pathway for generic versions of small molecule pharmaceuticals which are essentially identical replicas to the parent drug. Because small molecule compounds can be perfectly replicated, the approval of generic versions of these drugs relies heavily on the prior FDA approval of the parent compound, making the generic approval pathway  significantly less stringent than approval for an innovative pharmaceutical.

However, until recently no FDA approval pathway existed for biosimilar pharmaceuticals. The European Union approved its first biosimilar in 2006, and has approved twenty other biosimilar drugs in the nine years since. Despite the availability of these pharmaceuticals in Europe, without an FDA approval pathway available for biosimilars, this entire class of drugs was unavailable in the United States. The first biologic pharmaceutical approved in the United States went off-patent in the early 1990s, this lag in the creation of an FDA approval pathway for biosimilars has allowed innovator biologic manufacturers to work without competition from off-brand products for more than twenty years since the time when the market otherwise would have been open to competing products.

Though the FDA approval of Zarxio ends the long wait for biosimilars in U.S. markets, the approved label for the product has raised questions regarding how closely biosimilar labeling rules will conform to existing generic small molecule labeling rules. In turn, these labeling rules impact whether a copycat manufacturer can be held liable for warnings defects in product liability actions.

Currently, law requires that a brand-name drug manufacturer provide accurate and adequate warning labels. However, a manufacturer of a small-molecule generic is only responsible for making sure that its warning label is the same as its brand-name reference drug.  This requirement of “sameness” between the brand-name and generic labels is meant to prevent a generic pharmaceutical from appearing to be more (or less) safe or effective than the identical brand name product. In a pair of recently decided cases, Pliva v. Mensing (2011) and Mutual v. Bartlett (2013)  the Supreme Court held that federal regulations that prevent generic manufacturers from editing warnings labels preempt “failure to warn” claims based in state tort law. Essentially, the current generic labeling regime, coupled with these Supreme Court decisions shield generic manufacturers from any liability under warnings defect claims.

The FDA plans to issue biosimilar labeling draft guidance later this year, so it still stands to be seen whether the FDA will differentiate biosimilars from their reference biologics or adopt a regime similar to the “sameness” requirement in the labeling of generics.

The best present indication we have for the likely direction the FDA will take in its forthcoming draft guidance may be the labeling approved for Zarxio earlier this year. Zarxio’s labeling mimics the FDA approved labeling for Neupogen and fails to indicate that Zarxio is a biosimilar rather than an interchangeable iteration of the reference drug. The approval of Zarxio’s label, which appears to follow the “sameness” requirement for generics has caused concern among biologic manufacturers as an indication that the FDA may plan to treat biosimilar labeling in much the same way that it treats generic small molecule labeling. This concern prompted biopharmaceutical company AbbVie to submit a citizen petition requesting that the FDA approach biosimilar labeling in a way that reflects critical distinctions between biosimilars and small molecule generics.

Though Zarxio’s label appears to follow the old model of “sameness”  mandated for generic labels, the question remains as to what impact forthcoming FDA guidance regarding biosimilar labeling will have on potential biosimilar product liability claims.

Rachel Conry

 

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