Budgets Propose Eliminating Interchangeability Status for Biosimilars

When then-President Barack Obama signed the Affordable Care Act (ACA) into law on March 23, 2010, he established the 351(k) biosimilar pathway via the Biologics Price Competition and Innovation Act (BPCIA), which amended the Public Health Service (PHS) Act. Since then, the FDA has approved almost 50 biosimilars, with about one-fifth of those gaining interchangeable status. That distinction, however, has been increasingly under fire, most recently in President Biden’s fiscal year (FY) 2025 budget, which proposes eliminating the interchangeability designation entirely. That could help boost uptake of biosimilars, resulting in prescription drug savings, say some industry experts.

In contrast to the EU, whose European Medicines Agency (EMA) and the Heads of Medicines Agencies (HMA) clarified in September 2022 that all biosimilars approved in the EU are interchangeable, the FDA has created two levels of biosimilars: biosimilars and interchangeable biosimilars.

The BPCIA requires that biosimilar manufacturers demonstrate that their drugs are “highly similar to the reference product notwithstanding minor differences in clinically inactive components,” as well as safe, pure and potent for approval. To be granted interchangeable status, drugmakers must demonstrate not only biosimilarity but also that “the risk in terms of safety or diminished efficacy of alternating or switching between use of the biological product and the reference product is not greater than the risk of using the reference product without such alternation or switch.” Manufacturers must specifically apply for the interchangeable designation and provide data from these switching studies.

As of early April 2024, the FDA had granted the designation to the following biosimilars:

  • Biocon Biologics Inc.’s Semglee (insulin glargine-yfgn) and Eli Lilly and Co.’s Rezvoglar (insulin glargine-aglr), both of which reference Lantus (insulin glargine) from Sanofi US;
  • Boehringer Ingelheim Pharmaceuticals, Inc.’s Cyltezo (adalimumab-adbm), Pfizer Inc.’s Abrilada (adalimumab-afzb) and Alvotech and Teva Pharmaceuticals’ Simlandi (adalimumab-ryvk), which reference AbbVie Inc.’s Humira (adalimumab);
  • Coherus BioSciences, Inc.’s Cimerli (ranibizumab-eqrn) and Biogen Inc. and Samsung Bioepis Co., Ltd.’s Byooviz (ranibizumab-nuna), both of which reference Lucentis (ranibizumab) from Genentech USA, Inc., a member of the Roche Group;
  • Amgen Inc.’s Wezlana (ustekinumab-auub), which references Stelara (ustekinumab) from the Janssen Pharmaceutical Companies of Johnson & Johnson; and
  • Sandoz’s Wyost (denosumab-bbdz) and Jubbonti (denosumab-bbdz), which reference Amgen’s Xgeva (denosumab) and Prolia (denosumab).

Physicians must specifically prescribe biosimilars without interchangeable status. But agents with that designation may be dispensed at the pharmacy level without provider intervention. All 50 states, as well as Washington, D.C. and Puerto Rico, have enacted laws around interchangeable biosimilar substitution, with policies such as informing patients and physicians when a biosimilar is substituted without a prescription for that product (see charts below).

Efforts Have Been Made to Level Playing Field

Recently, some efforts have been made to minimize the difference between biosimilars and interchangeable biosimilars.

In September, the FDA proposed including interchangeability information in the Purple Book only and not on a drug’s label, as well having the same biosimilarity statement for both biosimilars and interchangeable biosimilars on their labels.

In the Federal Register notice (88 Fed. Reg. 63957 Sept. 18, 2023), the FDA explained that it “has gained valuable experience about labeling considerations for biosimilar and interchangeable biosimilar products” since it approved the first biosimilar, Sandoz’s Zarxio (filgrastim-sndz), on March 6, 2015. That experience has revealed issues around labeling of biosimilars and interchangeable biosimilars: “Determining how to appropriately label such products and keep labeling up to date without causing undue confusion has proven challenging,” it said.

Prior to that, in July 2023, Sen. Mike Lee (R-Utah) reintroduced the Biosimilar Red Tape Elimination Act (S. 2305). The legislation is focused on increasing competition among biologics and lowering consumer costs for them.

He first introduced the bill on Nov. 17, 2022, with the initial version focused on doing away with the FDA requirement for switching studies for biosimilars seeking the interchangeability designation. In a press release when the bill was first introduced, Lee claimed that the process companies need to undergo to get that designation is “cumbersome and expensive.…Eliminating this barrier would increase access to lower-cost biosimilars and save payers and consumers billions over the next five years.”

The reintroduced legislation, however, seeks to simply “deem biosimilars as interchangeable with their branded equivalent upon their approval by the FDA.”

The legislation, which has bipartisan support, has been referred to the Senate Committee on Health, Education, Labor, and Pensions.

When the bill was first introduced, Sarfaraz Niazi, Ph.D., an adjunct professor of biopharmaceutical sciences at the College of Pharmacy at the University of Illinois Chicago, pointed out that “according to the FDA, ‘biosimilars have no clinically meaningful difference with their reference product,’ so if there is no difference, they should be interchangeable without the extensive and expensive switching and alternating studies in patients.…Creating two classes of biosimilars has weakened the trust in biosimilars.”

At the state level, four states so far have passed legislation allowing health plans to substitute biosimilars similarly to interchangeable biosimilars and generics.

“If the provisions in the president’s FY25 budget are implemented, states may not need to enact separate legislation to allow for health plan substitution of noninterchangeable biosimilars, as all biosimilars would be considered interchangeable,” observes Jenny Williams, Pharm.D., vice president of the Access Experience Team at PRECISIONvalue. “However, if this provision is not implemented, more states may follow suit and implement similar legislation to promote biosimilar adoption of noninterchangeable biosimilars.”

Proposed Budgets Raise Issue

HHS’s Fiscal Year 2025 Budget in Brief and the FDA’s Fiscal Year 2025 Justification of Estimates for Appropriations Committees propose eliminating the distinction between the approvals for biosimilars and interchangeable biosimilars.

Both proposed amending section 351 of the PHS Act “to no longer include a separate statutory standard for a determination of interchangeability and to deem all approved biosimilars to be interchangeable with their respective reference products.”

The distinction, both say, has resulted in “confusion and misunderstanding” among patients and providers about the safety and efficacy of biosimilars compared with interchangeable biosimilars.

“This change makes the U.S. biosimilar program more consistent with current scientific understanding as well as with the approach adopted by other major regulatory jurisdictions such as the European Union where biosimilars are interchangeable with their respective reference products upon approval,” says HHS. “Permitting biosimilar substitution in this way is expected to increase uptake of safe and affordable biosimilars, with potential downstream effects of increasing competition, and access.”

The impact is deemed to be budget neutral.

“While there is uncertainty if the biosimilar interchangeability will be incorporated in the final budgets, with bipartisan support for lowering prescription drug costs, it seems it is likely that Congress will move forward with it,” says Williams. “This change may make the approval process less complicated, which could further increase biosimilar uptake and lead to lower drug prices.”

“Considering all biosimilars to be interchangeable may increase uptake in the U.S.,” commented Robert Schwartz, Ph.D., a partner at Venable LLP, in a March 18 article.

Doing away with the distinction is unlikely to impact people’s perception of whether biosimilars are safe and effective, Williams tells AIS Health, a division of MMIT.

Patient knowledge around the differences between biosimilars and interchangeable biosimilars “is very limited,” she says. “I do not think they understand the nuances and the fact that there is no difference between interchangeable and noninterchangeable biosimilars in regard to safety and efficacy. Thus, I do not think this will have an impact in patient perception.

“However, additional education on the biosimilar approval process and how the FDA requires the biosimilar to show no clinically meaningful differences may be beneficial to reinforce the value of biosimilars and further encourage uptake,” she continues.

According to Williams, if section 351 of the PHS Act is amended per the proposed language, “it would likely apply retroactively, as all approved biosimilars would be considered interchangeable.”

When asked whether biosimilars that had been approved with the interchangeable status would retain that status where it is indicated, such as a drug’s label and the Purple Book, she says that “I would imagine that this language would change, as the prior interchangeability designation would no longer apply.”

Biosimilar Manufacturers Could Have Pros, Cons

Doing away with the interchangeable distinction could represent a mixed bag for biosimilar developers.

On the one hand, “doing away with a separate standard for interchangeability may encourage biosimilar development, as they would not have to conduct switching studies or provide additional evidence on interchangeability, potentially streamlining the biosimilar development process, as well as reducing development costs,” explains Williams.

However, “the HHS budget leaves questions as to whether their [biosimilar manufacturers’] investment in switching studies, with the hope of gaining market advantage over biosimilar competitors, could be significantly devalued,” wrote Schwartz.

It is likely that the exclusivity period granted interchangeable biosimilars would disappear, says Williams.

But “it is somewhat unlikely the bill would impact drugs that have already been awarded interchangeable exclusivity,” Schwartz stated. That said, “it could impact drugs that are awaiting interchangeability designations and eliminate the additional exclusivity arising from an interchangeable designation.”

Ultimately, said Schwartz, “it remains to be seen whether the gained benefit of all biosimilars being eligible for automatic substitution for the reference product, subject to State laws, without requiring additional clinical trials, will also incentivize increased investment into biosimilar development.”

According to Williams, state laws around interchangeability “may need to evolve, as most states currently require interchangeability designation in order to substitute an interchangeable biosimilar. If that designation no longer applies, the states may need to update their legislation to reflect new guidance, depending on how the law is worded.”

Contact Williams via Andie Lunkenheimer at andie.lunkenheimer@gcihealth.com.

This article was reprinted from AIS Health’s monthly publication Radar on Specialty Pharmacy.

© 2024 MMIT
Angela Maas

Angela Maas

Angela has an extensive background of editing, reporting and writing for trade and consumer publications. She has written Radar on Specialty Pharmacy since she joined AIS Health in 2005 and has broad knowledge of the various issues at play within the space. She also has written for Spotlight on Market Access since its 2017 launch. Before joining AIS Health, she was managing editor at Employee Benefit News and Employee Benefit News Canada and managing editor at Hem Aware (a hemophilia publication), Lupus Living and Momentum (a multiple sclerosis publication). She has a B.A. in English and an M.A. in British literature from Arizona State University.

Related Posts

October 19

Would Proposed Changes on Interchangeability Diminish Designation?

Read More
November 3

Biosimilars Are Making Inroads Into U.S. Market, but Challenges Remain

Read More
March 14

Cardinal Health Report Highlights ‘Pivotal Year’ for Biosimilars



Sign up for publications to get unmatched business intelligence delivered to your inbox.

subscribe today