With the Future of the ACA in Question, Are US Biosimilars at Risk?

Federal Judge Reed O’Connor, in the Federal District Court in Fort Worth, Texas, has ruled in Texas v Azar that the Affordable Care Act (ACA)’s individual coverage mandate is unconstitutional. According to his ruling, in the absence of the individual mandate, the rest of the ACA cannot stand.

While many stakeholders are concerned most immediately about how the ruling could affect US patients’ healthcare options and coverage for pre-existing conditions, the biosimilars industry is also concerned about the future of one key feature of the ACA that keenly impacts the biosimilars landscape: the Biologics Price Competition and Innovation Act (BPCIA), which provides the basis for the biosimilar regulatory pathway in the United States. Passed as part of the ACA, the BPCIA, which provides the framework under which biosimilars and interchangeable biologics can be approved by the FDA, could now be in jeopardy if the Supreme Court of the United States agrees with Judge O’Connor’s ruling.

In an email to The Center for Biosimilars^®, Ha Kung Wong, JD, partner at Venble LLP, said that, “If the [ACA] is actually found to be unconstitutional in its entirety after the eventual appeal, the BPCIA biosimilars pathway would essentially cease to exist and need to be passed by Congress all over again.”

However, he added, “Although Republican governors and state attorneys general brought the Texas case and support the unconstitutionality of the ACA, there has been no indication that that they want to replace the biosimilars pathway portion of the ACA. With that said, we’ve had years of concerns, ambiguities and issues with respect to the biosimilars pathway, and if it were up to be passed by Congress again, there certainly would be significant discussion from stakeholders whether aspects should be changed the second time around, such as the current optional nature of the process post-Amgen v Sandoz,” noted Wong.

In an email to The Center for Biosimilars^®, Joel Wallace, JD, attorney at Schiff Hardin LLP, also weighed in, saying that, “Judge O’Connor’s ruling poses 2 potentially significant consequences: First, the ruling could undo the entire US biosimilars industry, because without the ACA, there is no statutory framework for biosimilar drug approval. Second, Judge O’Connor’s opinion could potentially leave millions of patients without prescription drug insurance coverage, hurting both the patients themselves as well as the pharmaceutical industry’s bottom line.”

Wallace noted, however, that no injunction has yet been issued related to the ACA, and that US biosimilars companies should, for now, continue with business as usual. However, he added, all biosimilars manufacturers should keep a close watch on the litigation, as it has the potential to significantly impact business in the days ahead.