Competition between five biologic drugs and their skinny-label biosimilars saved Medicare an estimated $1.5 billion during 2015-2020. But these savings accruing to Medicare and the availability of those and other biosimilars through skinny labeling is under threat from recent court rulings, according to a research letter published online in JAMA Internal Medicine.
The authors highlighted the need for such savings by noting that, while biologics comprise less than 5% of prescription drug use, their price tag amounts to about 40% of U.S. drug spending, Biologic manufacturers often delay the availability of biosimilars for additional years beyond the original patent expiration through further patents for supplemental indications. To provide a counterbalance, federal law allows the Food and Drug Administration to approve “skinny-label” generics and biosimilars that carve out patent-protected indications or regulatory exclusivities. But once a generic drug reaches the market through this process with a skinny label, it may often be substituted for indications that go beyond the ones listed on the skinny label. In fact, some state laws mandate that pharmacists substitute interchangeable generics for brand-name drugs, helping to decrease drug prices. In response to legal threats to the skinny-label pathway, Alexander C. Egilman and colleagues at Brigham and Women’s Hospital and Harvard Medical School, both in Boston, assessed the frequency of approval and marketing of skinny-label biosimilars from 2015 to 2021 and the resultant savings to Medicare.
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The authors estimated annual Part B (clinician-administered) savings from skinny-label biosimilars through 2020 by comparing actual biologic and skinny-label biosimilar spending with estimated biologic spending without competition using the Medicare Dashboard. They assumed that the unit price of the biologic would increase at its 5-year compound annual growth rate prior to competition.
In that period, the FDA approved 33 biosimilars linked to 11 biologics. Among them, 22 (66.7%) had a skinny label. Of 21 biosimilars marketed before 2022, 13 (61.9%) were launched with a skinny label. Of the 8 biologics linked to these 21 biosimilars, 5 of the first-to-market biosimilars had skinny labels (bevacizumab, filgrastim, infliximab, pegfilgrastim, and rituximab), leading to earlier competition through 2021.
The estimated $1.5 billion in savings to Medicare from these skinny-label biosimilars over the 2015-2020 span represents 4.9% of the $30.2 billion that Medicare spent on the five biologics during this period. The researchers pointed out that once adalimumab (Humira) faces skinny-label biosimilar competition in 2023, savings will likely grow substantially.
In response to the research letter, an editor’s note by JAMA Internal Medicine Editorial Fellow Eric Ward, MD, and JAMA Internal Medicine Editor at Large and Online Editor Robert Steinbrook, MD, stated that, between 2015 and 2019, 24 (43%) of 56 brand-name drugs had competition from skinny-labeled generic formulations after first becoming available as generics.
The editors also referenced a JAMA Viewpoints article from 2021 that reviewed the most recent case challenging the skinny-label pathway in which GlaxoSmithKline sued Teva for its marketing of a skinny-label generic of the brand-name beta-blocker carvedilol (Coreg) that the plaintive claimed “induced physicians to prescribe carvedilol for indications that had been carved out by Teva’s skinny label, thus infringing GlaxoSmithKline’s patents.” A $235 million judgment against Teva was overturned by a district court and then reversed again by a Federal Circuit court that, after receiving criticism, reconsidered the case, and a panel affirmed the judgment against Teva.
“The Federal Circuit panel’s decision has the potential to put generic drugs that fail to adequately carve out indications from the brand name labeling at risk for damages related to infringement,” the authors wrote. Similar claims of infringement are being heard in other courts, they wrote, and they urged careful targeting of skinny-label carveouts, and suggest also that challenges to the arguments used against Teva focus on preservation of First Amendment rights as protection for lawful and accurate speech in drug labels.
“The legal uncertainties are likely to continue, as manufacturers pursue novel and complex strategies to protect the patents and regulatory exclusivities of brand-name drugs and biologics,” Dr. Ward and Dr. Steinbrook wrote, adding that “the path forward is for Congress to enact additional legislation that reaffirms and strengthens the permissibility of skinny labeling.”
The research letter’s corresponding author, Ameet Sarpatwari, PhD, JD, assistant professor at Harvard Medical School, and assistant director for the Harvard Program On Regulation, Therapeutics, And Law, echoed concerns over the Teva case in an interview. “There has certainly been concern that should the appellate decision stand, there will be a chilling effect. As the lone dissenter in that case noted, ‘no skinny-label generic is safe.’ I think many generic and biosimilar manufacturers are awaiting to see whether the Supreme Court will take the case.”
He added: “I do not believe the likelihood of skinny-label-supportive legislation making it through Congress will be greatly diminished in a divided Congress. Democrats and Republicans alike should seek to promote competition in the marketplace, which is what the skinny-labeling pathway accomplishes.”
The authors reported no relevant conflicts of interest. The research was funded by a grant from Arnold Ventures.