Healthcare Reform Efforts and the BPCIA

Amanda Forys, MSPH: I don’t know if any of you are aware—being in the health care industry—but we have a new president who is very interested in repealing and replacing Obamacare, or the Affordable Care Act (ACA). There [have] been some really interesting, unsuccessful movements around that so far. We’ll see what happens in the coming months, but let’s talk about how biosimilars could be affected by this.

The Biologics Price Competition and Innovation Act (BPCIA) was actually part of the Affordable Care Act, but it’s not necessarily something you hear very many people talk about when they say, “Repeal and replace.” Do you think that would be a section that would be left intact if the ACA were repealed and replaced? Yes or no? And then, the other question is, if it’s intact and if you think it will stay as is, do you think Congress will address changes? Or, do you think they will punt it to the court and let the courts keep making decisions on some of the questions that have been left lingering with the BPCIA? Molly?

Molly Burich, MS: I will start by saying yes, I think it will remain in place. I think that it’s clear that policy makers on both sides of the aisle want to see drug prices come down. And, I think they all recognize that the biosimilar pathway, which was part of the original Obamacare/ACA, is an important part of that. So, to date, we have not heard whether that would be in jeopardy. I don’t think that it would be, purely because of the concerns over drug pricing.

Angus Worthing, MD, FACR, FACP: Another reason it would probably stay is that the Congressional Budget Office might score a bill that repeals biosimilars pathways as more expensive, because Medicare and federal insurance will have to pay more without a biosimilar pathway. So, I think we’re probably all in agreement.

Ha Kung Wong, JD: Yes, I can confirm that we are in agreement on this. Honestly, the BPCIA also, from an IP (intellectual property) standpoint, forms the litigation pathway for biosimilars. And, honestly, I think it was meant to be kind of analogous to what was done of Hatch—Waxman—it kind of allows for a process to deal with IP issues prior to the product actually launching, rather than having to worry about declaratory judgment actions and preliminary injunctions and all this messy stuff in the courts that nobody wants to be involved in. So, why not get it done early? I think the problem is that there are a lot of loopholes there. There are a lot of issue there, but I certainly think that the BPCIA will stay intact.

Amanda Forys, MSPH: Do you think we’ll see changes to it added in, or do you think they’ll let the courts decide as things come up?

Ha Kung Wong, JD: I am of the mind that the courts still have a couple of questions to answer. Right now, as it stands, after Sandoz v Amgen, the entire litigation pathway is optional. That is a little bit of an issue, because I suspect that Congress didn’t spend all that time drafting a statue to be a convoluted pathway to litigation that was meant to be not only optional but fully in the hands of the biosimilar manufacturer. In the Sandoz v Amgen case, the Supreme Court actually came down on this. They basically said that there really is no remedy if you don’t take the first step. And the first step was, after the biosimilar applicant actually filed the application, they were supposed to supply that to the reference product sponsor, along with manufacturing information, within 20 days. The big question was, “What happens if I don’t do that as a biosimilar manufacturer?” And the answer from the Supreme Court is, “Tough luck—go sue them.” And that’s what will happen. You’ll have to bring a declaratory judgment action. So, you might think from the outside, That’s fine. They still have a remedy. They can still go to the courts. But, the fact of the matter is that the BPCIA litigation pathway was meant to narrow down the IP so that you could focus on the aspects of what should be challenged now and what should be challenged later.

As we’ve talked about, biosimilars and biologics are so much more complex than small molecules, and they have so much more IP. If you look at a typical Orange Book—listed small molecule product, maybe you have 1, 2, or 3 patents. And outside, maybe you have 10, but that’s a very rare thing nowadays. But biosimilars and biologics—you can have 50, 60, 70, 80 patents and all different aspects of it. And, of course, the products are not exact copies because they’re made from living cells. So, infringement is an issue.

So, how do you narrow all that stuff down and do this in an orderly way? Well, Congress thought BPCIA would address that. But, now that it’s optional, it makes it a little bit of the Wild West again. I think that is an issue, and I wouldn’t be surprised if Congress wanted to revisit that—if they had the opportunity.

Amanda Forys, MSPH: I have another ACA question. The Independent Payment Advisory Board (IPAB) has not been the most popular policy on either side of the aisle. Can you all talk a little bit about the IPAB? What are they all about? Why does everyone want to get rid of it?

Angus Worthing, MD, FACR, FACP: Sure. The Independent Payment Advisory Board, IPAB, is not yet in place. It’s what would be an unelected board that would report to Congress with suggestions on how to tamp down Medicare expenditures if the system grows to be too expensive. A lot of provider groups are against IPAB, and there’s a lot of support in Congress to take that piece out and control costs in different ways.

As a rheumatologist and an internist taking care of patients for the last 20 years under a different system before the IPAB, I saw that doctors essentially didn’t get raises in their reimbursement for taking care of patients in the Medicare system to cover the cost of inflation in rent, payroll, and health insurance for their employees. What you saw was that a lot of doctors left the Medicare system or left insurance in general. They started taking cash payments from patients. And so, it leads to this point today, where one of the hardest questions I get from patients in a rheumatology clinic, who have arthritis and rheumatologic diseases, is not about a patient’s specific condition but, rather, it’s the simple question of “Can you refer me to a good primary care doctor that takes Medicare?” It’s really hard. So, with IPAB, we see the possibility where that board might reduce payments even further to physicians. This may make it harder to stay in practice and take care of people in the Medicare system. And so, we’d rather see a different way.