The FDA’s approval of Wezlana as an interchangeable biosimilar to inflammatory disease drug Stelara underscores the legal obstacles the pharmaceutical industry faces in lawsuits seeking to block implementation of the Medicare drug price negotiation program.
The Centers for Medicare & Medicaid Services was specific in its selection of the first 10 drugs up for price cuts under the program launched by last year’s Inflation Reduction Act. The agency selected products with the highest total Medicare Part D gross coverage with no generic or biosimilar competition.
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“This is the real-world case study of how this whole biosimilar competitor for a selected drug will play out,” said Melissa Wong, a partner at Holland & Knight’s Boston office. “Everyone in the industry is really watching to see how CMS will account for this.”
Now, with the possibility that one of the first 10 drugs could be removed from the negotiation program, biologic and biosimilar drugmakers are eyeing how this may affect future biosimilar entry or the program’s litigation.
“It is likely courts will need to directly consider the potential entrance of new biosimilars to drugs selected for negotiation, such as Stelara, when challengers attempt to specifically identify potential financial harm caused by that drug’s inclusion in the negotiation program,” said Zachary Baron, associate director of the Health Policy and the Law Initiative at Georgetown’s O’Neill Institute.
“While this issue may not be relevant in every case brought, it could further narrow the number of legal claims that courts will consider on the merits as these lawsuits proceed,” Baron said.
Though Wezlana will be the first Stelara biosimilar to hit the market, it’s expected to happen no later than Jan. 1, 2025 due to Amgen agreeing to launch it later in exchange for Johnson & Johnson dropping a patent infringement lawsuit.
Biosimilars, which are often cheaper than the brand name drug, are considered products close enough to a biologic product used to treat patients in the same way with no clinically meaningful differences. An interchangeable biosimilar product has shown to meet other requirements and may be substituted for the reference product at the pharmacy counter instead of a health-care professional signing off on it.
‘Meaningful Competition’
The approval of Amgen’s Wezlana approval raises questions about what is considered “meaningful” and “bona fide” competition in the program. Drugs can be pulled from the program if there is “meaningful competition,” according to the agency. However, it’s still unclear if Wezlana falls under that CMS concept for Stelara.
“They selected it anyway and that’s interesting,” Wong said. “It’s unclear if the government wasn’t sure about the timing or that it was a product that they wanted to include for another reason.”
The drug would remain on the list until the agency determines that the biologic has at least one product that is approved or licensed as a generic or biosimilar and “marketed pursuant to such approval or licensure.”
The CMS would have to determine before Aug. 1, 2024, when the first negotiation period ends, that there is “meaningful competition” for the drug, which could block the maximum fair price from being applied.
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The Department of Health and Human Services pointed to Wezlana’s approval to strengthen its argument in one case against a plaintiff that claims Article III standing in a lawsuit against the program, writing that they wouldn’t be harmed if Stelara is removed from the list.
In a case filed by the National Infusion Center Association, or NICA, the industry group alleges the pricing provisions will harm both its members and Medicare Part B and Part D beneficiaries.
The HHS in October said NICA didn’t “dispute that in the years before any negotiated price goes into effect for a drug under Part B, many factors could change current predictions about which drugs may be selected,” like a generic or biosimilar competitor entering the market, which would remove the biologic from the list.
If “those predictions are realized, Stelara will be deselected, and negotiated prices will never take effect for the administration of Stelara under Part B,” the agency said in a supplemental court filing.
“Those predictions are now, in fact, beginning to be realized,” the HHS added.
The HHS’ filing, though, in regards to Wezlana, “exaggerates the significance of a single example of financial injury while continuing to ignore the procedural injuries that constitute the Complaint’s gravamen,” NICA said in a reply Tuesday.
The “government’s argument inverts the standing inquiry,” and “financial harm from lower future drug reimbursements is not Plaintiffs’ principal claimed harm supporting standing,” NICA said.
Nonetheless, the industry group, along with the Pharmaceutical Research and Manufacturers of America and the Global Colon Cancer Association, request the government’s motion to dismiss the case be denied.