U.S. Supreme Court Issues Opinion in Sandoz v. Amgen: A Big Win for Sandoz and Other Biosimilar Applicants.

The U.S. Supreme Court released its much-anticipated ruling today in the battle between Sandoz and Amgen over Amgen’s biosimilar version of Sandoz’s Neupogen (filgrastim).  Justice Thomas’s opinion for a unanimous Court was an almost total victory for Amgen. Justice Breyer issued a very brief one-page opinion concurring in the decision but expressing his view that in future cases deference should be given to the FDA’s reasonable interpretation of the Biologics Price Competition and Innovation Act of 2009 (the Act).

There were two major issues decided by the Court today. The first was whether or not Sandoz fulfilled the 180-day notice requirement of the Act when it delivered its original 180-day notice of its intent to market a biosimilar filgrastim at the time of filing its application with the FDA. The second major issue decided was whether the Act’s elaborate provisions providing for exchanges of information (the “patent dance”) is mandatory. In the patent dance the specifying the biosimilar applicant can provide its manufacturing information to the reference drug sponsor followed the reference drug sponsor’s provision of  lists of patents it claims are infringed by the biosimilar applicant

The answer to both these questions favored Sandoz. The original 180-day notice of intent to market that Sandoz provided at the time of filing its original application with the FDA was sufficient.  No subsequent, second such notice was required. The relevant language of the opinion on that clause is:

The Federal Circuit held that an applicant’s biosimilar must already be “licensed” at the time the applicant gives notice. 794 F. 3d, at 1358.

We disagree. The applicant must give “notice” at least 180 days “before the date of the first commercial marketing.”

The provision of manufacturing information by the biosimilar applicant and patent lists by the reference drug sponsor is not mandatory. The remedy for the biosimilar applicant’s failure to provide the information  that the Act provides is that the filing of the biosimilar application is an act of infringement enabling the reference drug sponsor to file suit. Here is the relevant language of that portion of the opinion.

Clause (ii) of §271(e)(2)(C), in contrast, defines artificial infringement in the situation where an applicant fails to disclose its application and manufacturing information altogether and the parties never prepare the §262(l)(3) lists. That clause provides that the submission of the application represents an act of artificial infringement with respect to any patent that could have been included on the lists.

The Court did, however, leave a very small opening for Amgen to snatch victory from the jaws of defeat. While Amgen was not entitled to an automatic injunction under the biosimilar Act, on remand the U.S. District Court must determine (again, from Justice Thomas’s opinion):

whether California law would treat noncompliance with §262(l)(2)(A) as “unlawful.” If the answer is yes, then the court should proceed to determine whether the BPCIA pre-empts any additional remedy available under state law for an applicant’s failure to comply with §262(l)(2)(A) (and whether Sandoz has forfeited any pre-emption defense, see 794 F. 3d, at 1360, n. 5). The court is also of course free to address the pre-emption question first by assuming that a remedy under state law exists.

I would predict the District Court will not issue an injunction based on California law and Amgen’s only recourse is to continue with its infringement suit.

Good News for Sickle-Cell Patients, But How Will Emmaus Make Money? A Look at the Business Side of Pharmaceutical Policy

 Last week’s most interesting story was that a the FDA Oncologic Drug Advisory Committee voted 10-3 to recommend that the FDA approve Emmaus Medical’s L-Glutamine for the treatment of Sickle Cell Disease.  The Phase III Clinical Trial showed that patients receiving L-Glutamine had a clinically significant reduction in the number of Sickle Cell Crises over the course of the 48-week trial. There were also positive results on other measures of the drug’s benefit, while the safety issues were relatively minor. So this is good news for Sickle Cell Disease patients. There are few therapeutic options for this serious disease and the likely approval of another meaningful treatment may make a real difference in their lives. 

BUT, this is one of the most unusual drug development studies I have seen. While other Orphan Drug makers have taken older compounds through development and relied on the 7 years of Orphan Drug exclusivity to return a profit on their investment, L-Glutamine is not just an older compound. Unlike repurposed older drugs, it is widely available and used as a dietary supplement. So while Emmaus is to be commended for undertaking the costly and risky process of establishing the effectiveness of L-Glutamine for Sickle Cell Disease and will be the only manufacturer allowed to label L-Glutamine for treating Sickle Cell Disease, they will not be the only manufacturer selling L-Glutamine in bulk quantities sufficient to treat Sickle Cell Disease. A quick search online revealed numerous online sellers.  For example, one online seller is offering 250 grams of L-Glutamine (advertised as pharmaceutical-grade) for $9.95.  Since the Emmaus studies dosed patients at between 20 to 60 grams a day, depending on body weight, the 250 grams being sold online would be last between 4 to 12.5 days.  Even assuming that most patients require 60 grams per day, the price for 1800 grams online would be a bit more than $60 per month.  I have not yet seen an announcement of Emmaus’ intended pricing for their product post-approval, however, their current pricing for the same drug, approved for short bowel syndrome, would be over $2000 per month at the higher dose.  While the Rx form is likely to be covered by insurance, it still seems quite possible that a significant market share could be lost to patients simply buying L-Glutamine online. That would still be good for patients, but not very good for Emmaus’ bottom line. It will be very interesting to follow Emmaus’ sales over the next few years to see whether taking a dietary supplement through the FDA approval process can actually work for companies as well as patients.

More on New Developments at the FDA in the Era of Precision Medicine

This week the FDA approved the expanded use of the cancer drug Keytruda for any solid tumor that expresses a particular molecular marker. It is the first time that the FDA has approved new uses of a cancer drug in cancers that are defined by a molecular marker independent of the site in the body where the tumor originated. While the expanded use of the drug was based on an accelerated approval supported by surrogate markers, this is another demonstration of the FDA’s continuing adaptation to the new era of precision medicine, in which the appropriate use of a drug is defined by particular genetic and molecular markers rather than the broad traditional disease categories.

Postscript to last week’s post–– I wrote that the approval of Kalydeco for cystic fibrosis patients with 23 additional mutations was, to my knowledge, the first time ever that the FDA had approved new indications for a drug without any human clinical data. The Kalydeco label change was based entirely on an in vitro assay of the drug’s effect on the function of the cystic fibrosis transmembrane receptor. The in vitro assay had correlated well with clinical trial data from the original Kalydeco studies and provided a reasonable degree of confidence that the drug would work in the additional mutations tested. Later reports and an additional statement from the FDA confirmed my initial conclusion that this approval was indeed the first of its kind and a real breakthrough in drug approval. That is good news for the approximately 900 cystic fibrosis patients who have one of those 23 mutations. Of course the 900 patients covered by the 23 additional mutations means that there is, on average, fewer than 40 patients with any one of those mutations, which is why the FDA’s flexibility is so important. Precision medicine will need that kind of regulatory innovation to move forward when, as the FDA’s Janet Woodcock stated, there is a solid understanding of the disease’s biology, a drug with a known safety (and pharmacokinetic) profile, and a good assay to predict the drug’s effect in target populations.

A milestone for precision medicine and for the FDA

Precision medicine is much in the news­­––and the need to target the right drug to the right patient using genomic and other information is clearly going to be major part of healthcare in the future. Today's news included an announcement from the FDA that it had expanded the approved indications for Kalydeco,  a breakthrough drug for the treatment of cystic fibrosis.  The previous label indication described Kalydeco as a 

cystic fibrosis transmembrane conductance regulator (CFTR) potentiator indicated for the treatment of cystic fibrosis (CF) in patients age 2 years and older who have one of the following mutations in the CFTR gene: G551D, G1244E, G1349D, G178R, G551S, S1251N, S1255P, S549N, or S549R …[or] R117H

The new label, according to the FDA, expands the use of Kalydeco from the 10 mutations above to include an additional 23 mutations, for a total of 33.  This is great news for cystic fibrosis patients, as the clinical studies in the original population showed that treatment with Kalydeco resulted in a significant increase in patients’ lung function. From a precision medicine perspective the Kalydeco expanded label could be viewed simply as yet another drug label with genomic information about the drug’s appropriate use—after all, there are already well over 200 drugs approvedby the FDA that include pharmacogenomic information.  However, it isn’t just the dramatic increase in the number of mutations in the Cystic Fibrosis Transmembrane Receptor gene that makes the FDA’s announcement remarkable, it is the evidentiary basis on which the dramatic expansion in the use of Kalydeco was approved.  The FDA’s announcement also had this particularly noteworthy statement:

Results from an in vitro cell-based model system have been shown to reasonably predict clinical response to Kalydeco. When additional mutations responded to Kalydeco in the laboratory test, researchers were thus able to extrapolate clinical benefit demonstrated in earlier clinical trials of other mutations. This resulted in the addition of gene mutations for which the drug is now indicated.

In other words, the indication for Kalydeco was approved solely on the basis of in vitro studies without additional human clinical data (or animal data for that matter).  Vertex Pharmaceuticals, the maker of Kalydeco, was able to persuade the FDA that because there was a sufficiently high correlation between the in vitro assays and clinical data for the previously studied mutations, it was more than reasonable to allow the drug to be used for patients with 23 additional mutations that showed a significant gain in function in cell-based assays.  I am unaware of any similar action by the FDA.  So the Kalydeco announcement is more than another step in the targeting of drugs based on individual biomarkers, it is a major step by the FDA in regulatory flexibility in streamlining drug development as the science of predicting drug response evolves.  We are indeed at the beginning of an interesting journey on an uncharted road to the future of drug development.

A Better Balance Between Accelerated Access And High-Priced New Drugs: A New Conditional Approval Option

This entry is reposted from Health Affairs Blog on March 20, 2017.

There are two different storms brewing in the pharmaceutical world. On the one hand there is increasing opposition to the very high prices of drugs. On the other hand there is ever more pressure to accelerate access to drugs for seriously-ill patients. President Trump expressed both of these very different concerns in his January 31st meeting with pharmaceutical executives, during which he called drug prices “astronomical” while also vowing to “streamline” the process of drug approval. It is vital that the cost of new drugs not overwhelm patients and the health care system. It is also important to get drugs to desperate patients as quickly as possible.

However, accelerated access allows a drug to reach the market quickly, based on clinical trials that measure surrogate endpoints, for instance time to cancer progression or observed tumor response rates, rather than survival rates. These surrogate endpoints frequently fail to predict whether patients will actually live longer or have a better quality of life, but are used because they can be measured within a relatively short period of time, while evidence as to the real effectiveness of a drug can take years to collect. At the same time, any reasonable approach to drug pricing requires substantial knowledge of a drug’s effectiveness for its value to be considered when evaluating the drug’s price and that knowledge simply is not available when a drug is approved before its performance is known on truly meaningful endpoints such as overall survival (in cancer) or long-term ability to function (in diseases such as Parkinson’s or Muscular Dystrophy. With Congress and the President both seeking to change the current system, there may be an opportunity to pursue a different approach to accelerated approval and, at the same time, take at least a small step towards reducing the costs of new, potentially life-saving drugs. One way to strike a better balance between accelerated access and limiting drug prices until their value is known might be a new form of “conditional approval” with prices discounted until full approval is warranted.

The Issues with Accelerated Approval

            The FDA’s accelerated approval of eteplirsen, a new antisense drug for Duchenne Muscular Dystrophy (DMD), is a clear example of both problems——“astronomical prices” and accelerated access. DMD is a devastating illness that affects children and causes muscle weakness and eventual death. There are no effective treatments. Understandably there was enormous pressure from patient groups to approve the drug despite the lack of evidence that the drug actually works, beyond a change in a surrogate marker.

The drug is now available at a price of $300,000 per patient per year, but it may be years before the data from additional clinical trials can provide substantial evidence of whether or not the drug is effective. If the drug turns out not to provide meaningful clinical benefit, then the $300,000 per year cost of providing patients the drug is a terrible waste of our health care dollars. However, if insurers do not pay for the drug and it actually would provide significant therapeutic benefit to Duchenne’s patients, then there would be even more terrible unnecessary suffering and death among DMD patients.

            Eteplirsen is not by any means the only drug approved before the real risks were known or, in some cases, a lack of real efficacy was demonstrated. One useful model for accelerated access and controlled pricing was developed in response to an earlier era of crisis in pharmaceutical policy when the HIV epidemic first caused a public outcry for accelerated access. Prior to the AIDS crisis of the 1980s, major patient advocacy groups, such as the American Cancer Society and the American Heart Association, focused their efforts on raising money for research and paid virtually no attention to the FDA. With AIDS, and particularly with ACT UP (AIDS Coalition to Unleash Power), the world changed. For the first time there was enormous pressure on the FDA to do something—anything—to get drugs out to patients before all of the safety and efficacy data was in.

            The FDA responded to the AIDS crisis with a number of efforts to expand early access. One that has the most relevance for today was the 1992 parallel track initiative. The parallel track initiative, was used only once for stavudine, a still-experimental drug that was made widely available to physicians treating AIDS patients.  The drug sponsor could seek to charge for the drug but only in an amount sufficient to recover its costs for the trial, which required financial disclosures to the FDA. Treating physicians providing the parallel track drug were required to provide the sponsor with basic data on their patients and patients’ responses to treatment.

How Conditional Approval Could Work

            A more balanced approach to the current cry for accelerated access and lower prices could adapt and build on the 1992 HIV-only parallel track approach. The two key components that could be revised for today’s use are: first, an accelerated approval that permits wide distribution before final approval; and, second, a mechanism that limits the price of the conditionally-approved drugs while more data is collected. Conditional approval based on surrogate endpoints would allow a drug’s sponsor to distribute the drug to all of the desperately ill patients who have no alternative, while maintaining the price restrictions until additional data on actual clinical benefit and risk is provided. This would provide a 21^st Century update of the 1992 HIV-only Parallel Track.

            Under the conditional approval proposed here any physician treating a patient with the targeted indication could prescribe the drug and would agree to collect and report basic data on the duration of treatment, responses to the drug, and any other changes in their patients’ conditions. Such longer-term single arm trials are likely to provide evidence of real effectiveness and safety when the target is an untreatable serious disease. While the drug is being widely used and the data collected, the sponsor could charge for the drug based on a set price formula until the sponsor provides further data and the FDA completes its review. There would be no need for case-by-case negotiations over costs and pricing as was required by the 1992 Parallel Track policy. This differs from other accelerated access programs that use the term “conditional approval” (such as that used by the European Medicines Evaluation Agency, which does not limit prices and must be reviewed annually).

Determining Prices for Conditionally Approved Drugs

            How might the predetermined discounted price provision work? One possible mechanism would require a pharmaceutical company seeking conditional approval to specify its intended initial market price for the new drug. The conditional approval distribution price could be limited to 25 percent of the specified initial market price. Alternatively, the conditional approval price formula might be a predetermined percentage of the average introductory price of breakthrough drugs approved during the prior two years. Unlike the prior Parallel Track provisions, either price formula would avoid the need for the sponsor to disclose its costs and negotiate with the FDA to justify charging during the conditional approval period. Given the strong demand by patients for a potentially life-saving drug when there is no effective alternative, marketing expenses should be low.

With the very low cost of small molecule manufacture or even the higher costs of manufacturing biologic drugs, the 25 percent pricing formula should cover the costs of manufacture, distribution, a limited marketing outreach, and the process of data collection and still provide a modest profit. This conditional approval update of Parallel Track would provide the needed balance between access to potential breakthrough drugs and substantial evidence to support their unrestricted entry into the marketplace. Limiting profits would motivate drug companies to distribute the drug widely enough to provide the needed evidence as expeditiously as possible. And in an era of skyrocketing prices for new drugs it would avoid imposing even greater costs to consumers and insurers for what are actually experimental drugs such as eteplirsen.

A Way Forward with Conditional Approval

            New proposals are being discussed that would even further accelerate access to new drugs and members of both parties in the House and Senate are moving forward with a variety of approaches to the high cost of new drugs. Now is the time to take a new approach to accelerating access and limiting drug prices. Of course, it would also be necessary to require insurers and government payers to cover the drugs during the conditional approval period in the same way that they currently cover drugs approved under the accelerated access and breakthrough drug procedures. If the data confirms the benefit of the treatment, full approval would be granted and the drug sponsor could charge whatever price it can justify in the marketplace, but with much better evidence as to what the drug’s real worth actually is. Patients desperate for treatment would get access to drugs, insurers would be paying less than under the current system, and patients, providers and insurers would get the data they need on the drug’s efficacy. It is time for a new approach to accelerated access that is good for patients and good for us all.