While the first biosimilars to hit the U.S. are still in development, the battle over how and when the follow-on biologics should be marketed continues to rage on both the local and global fronts.

A skirmish in California ended Saturday when Gov. Jerry Brown vetoed a bill, overwhelmingly passed by state lawmakers, that would limit automatic biosimilar substitution to those the FDA deems “interchangeable.” SB 598 also would have required pharmacists to notify physicians when an interchangeable is substituted for a prescribed biologic.

The bill had been sitting on the governor’s desk for a few weeks, during which he came under fire from the generics industry, as well as the California Public Employees’ Retirement System and other large purchasers, urging him to veto it.

Their concern was that the reporting requirement “would cast doubt on the safety and desirability of more cost-effective alternatives to biologics,” the governor said in his veto message.

Despite the veto, Brown suggested the legislation may not be a total casualty. He said he strongly supported the provision permitting substitution of interchangeables and added that the notification requirement “on its face looks reasonable.”

“Doctors with whom I have spoken would welcome this information,” Brown noted. Regardless, he decided to veto the bill, which he considered premature since the FDA has yet to set the standards biosimilars would have to meet to reach the higher threshold of interchangeability.

“Obviously, the governor gave himself a little wiggle room here,” Peter Pitts, president of the Center for Medicine in the Public Interest, told BioWorld Today.

Pitts disagreed with the governor about the timing of the bill. “It’s never too early to say we need to educate doctors and patients about what’s going on,” he said, stressing the importance of promoting safety and pharmacovigilance in the use of biosimilars.

“The untrained ear hears ‘identical’” when biosimilars are mentioned, Pitts said, but the follow-ons are not the same as generic drugs. Noting that even generics, which are supposed to be identical to the reference drug, can have variants that could affect an individual patient’s response, he pointed out that due to their complexity, biosimilars could produce more variances.

Amgen Inc., of Thousand Oaks, Calif., viewed Brown’s veto as a missed opportunity to “establish a clear, orderly system for introducing biosimilars into California law, and defin[e] key terminology for our healthcare providers.” Known for its innovative blockbuster biologics, Amgen also is developing several biosimilars in partnership with Actavis Inc. (See BioWorld Today, Feb. 8, 2013.)

SB 598 would have increased access to biologics and biosimilars while maintaining patient medical records and facilitating manufacturer accountability, Amgen said.

On the other side of the issue, the Generic Pharmaceutical Association (GPhA) welcomed the veto, touting the potential savings from increased biosimilar access unhampered by pharmacy reporting requirements. Legislation like SB 598 “adds unneeded burdens to the dispensing of biosimilar medications that will drive up costs,” GPhA said.

Such comments miss the point that states must pass laws to allow substitution within their borders, said George Goodno, director of state policy communications at the Biotechnology Industry Organization (BIO).

Because of the governor’s veto, California will have to fight this battle again or else pharmacies in the state will not be able to automatically substitute interchangeable biologics when they become available, he told BioWorld Today.

The same is true in several other states – such as Illinois, Texas and Washington – that have rejected biosimilar substitution bills. So far, only North Dakota, Oregon, Utah and Virginia have passed laws allowing substitution of interchangeables, with some level of notification. Several other states are still considering the issue. (See BioWorld Today, March 22, 2013, May 8, 2013, and July 3, 2013.)

Global Battle

While the substitution battle continues on the state level, another biosimilar war is raging on the global front as the countries negotiating the Trans-Pacific Partnership (TPP) push to finalize the trade talks this year. Despite efforts to have the agreement reflect the 12 years of data protection that biologic innovators enjoy in the U.S., the issue hasn’t made it to the 3-year-old negotiating table yet.

However, Mark Grayson, deputy vice president of public affairs at the Pharmaceutical Research and Manufacturers of America, expects the U.S. to address it. “We’re still just waiting for the negotiations to become heavy,” he told BioWorld Today, adding that it’s more important for the negotiators to get the agreement right than it is to finish it in a few months.

When U.S. lawmakers approved the biologic pathway in 2010, they agreed on the 12-year data exclusivity because they “believed that was what was necessary for biologics to be economically viable,” Grayson said.

Since the TPP is a forward-looking agreement and more countries are expected to sign on in the future, it must protect that viability if it is to encourage the development of new biologics, he added.

The U.S. Trade Representative (USTR) missed an opportunity a few years ago to negotiate the exclusivity as part of its Trade Enhancing Access to Medicines initiative, which was designed to expedite access to innovative and generic drugs by establishing a pathway for generics to enter TPP markets as quickly as possible by providing patent exceptions and generic incentives. (See BioWorld Today, Sept. 14, 2011, and Aug, 20, 2012.)

Several lawmakers and industry were concerned that the omission reflected the administration’s desire to reduce the exclusivity. For the past three years, President Barack Obama has included a shorter biologic data exclusivity in his annual budget as a cost-cutting measure. (See BioWorld Today, Feb. 16, 2011, Feb. 14, 2012, and April 11, 2013.)

In defending the 12-year exclusivity to the USTR, BIO pointed out that since a biosimilar isn’t identical to the innovator product, there’s greater uncertainty as to whether the innovator’s patents would protect against a biosimilar challenger.

“Without the certainty of some substantial period of market exclusivity, innovators will not have the incentives needed to conduct the expensive, risky and time-consuming work to discover and bring new biological products to market,” BIO said.

Opposition to including the data protection in the TPP is framed, once again, as an issue of increased access. But it really comes down to some of the partners wanting to maximize their own opportunities, Pitts said.

He noted that the 100 most essential drugs identified by the World Health Organization are all off patent, which means they’re available as generics. But people in many countries still don’t have access to those essential small-molecule drugs, so Pitts questioned the assumption that reducing or removing biologic data exclusivity would increase global access to biosimilars, which are more complex and costly than generics.