Senators Introduce Bipartisan Legislation to Protect Skinny Labeling

To close out 2024, 4 senators had one last piece of legislation on their agenda. Together, they introduced a new bipartisan bill (S 5573) that seeks to lower drug prices by accelerating the roll-out of biosimilars and generic drugs while creating legal protections for manufacturers.¹

“Skinny labeling” is a strategy where follow-on drug manufacturers only seek approval for certain indications of a branded drug, rather than all approved uses.² In the small-molecule drug market, this approach has enabled generic manufacturers to sidestep “new-use” patents that often extend an originator drug’s exclusivity long after its original patents expire. This strategy is now gaining traction in the biosimilar space, offering a pathway to challenge follow-on patents and expand patient access to lower-cost biologic therapies.

The bill would amend federal patent infringement law to allow generic drug manufacturers to submit or seek approval for a skinny label for a generic or biosimilar product; label, promote, or commercially market a drug with FDA-approved skinny labeling; and describe such a drug as a generic or therapeutic equivalent to the branded drug. | Image credit: W.Scott McGill - stock.adobe.com

If passed, the protections guaranteed under S 5573—also known as the Skinny Labels, Big Savings Act—would help shield biosimilar and generic drugmakers from timely and expensive lawsuits when they obtain skinny-label FDA approvals, ensuring faster access to affordable medications for patients.

“Big pharma uses endless patent litigation to squeeze patients and stop competitors from coming into the market,” said Senator John Hickenlooper (D, Colorado), the bill’s main sponsor.³ “Our bill levels the playing field so generic drug manufacturers can help working people afford life-saving medication.”

Senators Peter Welch (D, Vermont), Tom Cotton (R, Arkansas), and Susan M. Collins (R, Maine) signed on as bill cosponsors, and expressed their support for the bill in a statement, emphasizing the importance of generic drugs and biosimilars in lowering health care costs and improving patient access to affordable medications.

“This legislation is imperative for U.S. patients,” said John Murphy, III, president and CEO for the Association for Accessible Medicines.⁴ “When generic medicines become available, they bring immediately lower prices for lifesaving and lifechanging medications. We are thankful for the work done thus far by Senators Welch, Cotton, Collins, and Hickenlooper; and our association greatly appreciates the efforts of the Senate to expedite access to generic and biosimilar medicines by protecting skinny labeling.”

According to the senators, the bill would amend federal patent infringement law to allow generic drug manufacturers to³:

• Submit or seek approval for a skinny label for a generic or biosimilar pharmaceutical product
• Label, promote, or commercially market a drug with FDA-approved skinny labeling, in compliance with the Federal Food, Drug, and Cosmetic Act (FD&C Act) regulations
• Describe a drug approved via skinny labeling as a generic or therapeutic equivalent to the originator drug, consistent with the FD&C Act.

The Importance of Skinny Labeling

The estimated savings to Medicare from skinny-label biosimilars from 2015 to 2020 amounted to approximately $1.5 billion.⁵ Future savings are anticipated, particularly with the expected market entry of skinny-label biosimilars for adalimumab (Humira).

Unlike generics, biosimilars face significant hurdles in market acceptance without automatic substitution, meaning that manufacturers creating biosimilars for the pharmacy benefit are encouraged to be the first to obtain an interchangeable designation, allowing for their product to be substituted for the originator without waiting for physician approval.² Additionally, state laws may restrict interchangeability and require patient or prescriber involvement for biosimilar substitution regardless of interchangeability status. Carving out certain indications to avoid patents can also create a perception that the biosimilar is different from or less effective than the reference product, complicating market uptake.

“In Vermont and across the country, hardworking families are burdened with astronomical health care costs—including for lifesaving prescription drugs. So-called skinny labeling has helped level speed generics to market, bringing down costs in the process. It’s no surprise Big Pharma has a big problem with it,” said Welch.³ “This bill will protect skinny labeling and help patients pay less at the pharmacy counter.”

Furthermore, although skinny labeling may reduce litigation risks, it does not eliminate them.² Biosimilar developers must still invest considerable effort into marketing their products, which can raise the risk of legal claims related to inducing off-label use. Conducting switching studies to obtain interchangeability can create additionally expenses and development delays.

In addition to these legal and market challenges, economic trade-offs are involved. Developers must balance cost savings from reduced litigation against the potential loss of market opportunities due to the carve-out. The differences between biosimilars and generics further complicate the economic calculation. Current examples, such as the ongoing etanercept litigation between originator Enbrel and biosimilar Erelzi, highlight the legal uncertainties and demonstrate that the effectiveness of skinny labeling as a strategy in the biosimilar market remains unclear.

References

1. Skinny Labels, Big Savings Act, S 5573, 118th Cong (2024). Accessed January 2, 2025. https://www.congress.gov/bill/118th-congress/senate-bill/5573

2. Zheng L. What Is skinny labeling — and will it work for biosimilars? Biosimilar Development. February 9, 2019. Accessed January 2, 2025. https://www.biosimilardevelopment.com/doc/what-is-skinny-labeling-and-will-it-work-for-biosimilars-0001

3. Hickenlooper, Cotton, Welch, Collins introduce Skinny Labels, Big Savings Act to safeguard generic drugs, slash drug prices. Press release. Senator John Hickenlooper. December 19, 2024. Accessed January 2, 2025. https://www.hickenlooper.senate.gov/press_releases/hickenlooper-cotton-welch-collins-introduce-skinny-labels-big-savings-act-to-safeguard-generic-drugs-slash-drug-prices/

4. AAM applauds Senate bill to protect patient access to affordable medicines. Association for Accessible Medicines. Press release; December 19, 2024. Accessed January 2, 2025. https://accessiblemeds.org/resources/press-releases/aam-applauds-senate-bill-protect-patient-access-affordable-medicines/

5. Egilman AC, Van de Wiele VL, Rome BN, et al. frequency of approval and marketing of biosimilars with a skinny label and associated medicare savings. JAMA Intern Med. 2023;183(1):82-84. doi:10.1001/jamainternmed.2022.5419