BILL ANALYSIS Ó
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UNFINISHED BUSINESS
Bill No: SB 598
Author: Hill (D), et al.
Amended: 8/6/13
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEV. COMM. : 10-0, 4/8/13
AYES: Price, Emmerson, Block, Corbett, Galgiani, Hernandez,
Hill, Padilla, Wyland, Yee
SENATE HEALTH COMMITTEE : 6-1, 5/1/13
AYES: Hernandez, Anderson, Beall, De León, Pavley, Wolk
NOES: Nielsen
NO VOTE RECORDED: DeSaulnier, Monning
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SENATE FLOOR : 29-4, 5/24/13
AYES: Anderson, Beall, Block, Cannella, Corbett, Correa, De
León, Emmerson, Fuller, Gaines, Galgiani, Hancock, Hernandez,
Hill, Hueso, Huff, Jackson, Knight, Leno, Lieu, Padilla,
Pavley, Price, Roth, Steinberg, Walters, Wolk, Wyland, Yee
NOES: Calderon, DeSaulnier, Nielsen, Wright
NO VOTE RECORDED: Berryhill, Evans, Lara, Liu, Monning, Torres,
Vacancy
ASSEMBLY FLOOR : 60-4, 8/26/13 - See last page for vote
SUBJECT : Biosimilars
SOURCE : Author
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DIGEST : This bill authorizes pharmacists to substitute a
"biosimilar" for a biologic under specified circumstances, and
defines "biological product," "biosimilar," and
"interchangeable" according to their definitions within the
Federal Public Health Services Act (PHSA).
Assembly Amendments delete the provision requiring a pharmacy to
retain a record of the biosimilar selection for three years; and
make clarifying changes.
ANALYSIS : Existing federal law creates an abbreviated pathway
for biological products that are similar to or interchangeable
with licensed biological products, known as the Biologics Price
Competition and Innovation Act of 2009 (BPCIA); requires that,
for a biological product to be considered biosimilar to a
reference product, data must be derived from analytical, animal
and clinical studies as specified; clarifies that a product is
biosimilar to a reference product under the BPCIA if the
proposed biosimilar product is highly similar to the reference
product notwithstanding minor differences in clinically inactive
components and that no clinically meaningful differences exist
between the proposed biosimilar product and the reference
product in terms of safety, purity and potency; and clarifies
that state law governs how and when pharmacists may make
prescription drug substitutions.
Existing state law:
1.Defines biologics as human whole blood; human whole blood
derivatives specified by regulations; serum, vaccine, live
vaccine, killed vaccine, tissue vaccine, autogenous vaccine,
live virus, killed virus, live bacterial culture, killed
bacterial culture, bacterin, hormone, tissue extract, gland
extract, gland preparation, insulin, and similar products made
from human or animal tissues or micro-organisms.
2.Under the Pharmacy Law, provides for the licensure and
regulation of pharmacies, pharmacists and wholesalers of
dangerous drugs or devices by the Board of Pharmacy within the
Department of Consumer Affairs.
3.Specifies certain requirements regarding the dispensing and
furnishing of dangerous drugs and devices, and prohibits a
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person from furnishing any dangerous drug or device except
upon the prescription of a physician, dentist, podiatrist,
optometrist, veterinarian or naturopathic doctor.
4.Authorizes pharmacists filling prescription orders for drug
products prescribed by their trade or brand names to
substitute generic drugs for orders if the generic contains
the same active chemical ingredients of equivalent strength
and duration of therapy, subject to a patient notification and
bottle labeling requirement, unless the prescriber specifies
that a pharmacist may not substitute another drug product by
either indicating on the form submitted for the filling of the
prescription drug orders "Do not substitute" or words of
similar meaning or selecting a box on the form marked "Do not
substitute."
5.Authorizes pharmacists filling prescription orders for drug
products prescribed by their trade or brand names to
substitute a drug product with a different form of medication
with the same active chemical ingredients of equivalent
strength and duration of therapy as the prescribed drug
product when the change will improve the ability of the
patient to comply with the prescribed drug therapy, subject to
a patient notification and bottle labeling requirement, unless
the prescriber specifies that a pharmacist may not substitute
another drug product by either indicating on the form
submitted for the filling of the prescription drug orders "Do
not substitute" or words of similar meaning or selecting a box
on the form marked "Do not substitute."
This bill:
1.Updates permitted functions for pharmacists to allow a
pharmacist to substitute a biosimilar for a prescribed
biological product if the product is approved by the Food and
Drug Administration (FDA) and the prescriber has not indicated
"Do not substitute."
2.Requires a pharmacy, for prescriptions filled prior to January
1, 2017, within five business days of the selection of a
biological product or an interchangeable biosimilar, to notify
the prescriber whether the prescription dispensed was a
biological product or an interchangeable biosimilar, or enter
the information in a patient record system shared by the
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prescriber. No notification is required if the prescriber
indicates "Do not substitute" if there is no FDA-approved
interchangeable biosimilar or if a refill prescription is not
changed from the product originally dispensed.
3.Clarifies that "Do not substitute" means a biosimilar may not
be substituted for a biologic product and that physicians are
not liable for biosimilar substitution by a pharmacist.
4.Prohibits a pharmacist from selecting a biosimilar that meets
the requirements of these provisions unless the cost to the
patient of the biosimilar selected is the same or less than
the cost of the prescribed biological product.
5.Requires a patient to be notified when a biosimilar is
substituted for a biologic.
6.Requires the Board to maintain a list of interchangeable
biosimilars, if available, on its Internet Web site.
7.Defines the following terms:
A. "Biological product," "biosimilar," and
"interchangeable" according to their definitions within the
PHSA.
B. "Prescription," for purposes of a biological product,
according to the definition under the federal Food, Drug,
and Cosmetic Act (FDCA).
C. "351(k) pathway," refers to the licensure of a
biological product as a biosimilar or an interchangeable
biosimilar under the federal BPCIA.
1.Provides that nothing in this section prohibits a disability
insurer or health care service plan from requiring prior
authorization or imposing other appropriate utilization
controls in approving coverage for any biological product.
2.Clarifies that a pharmacist may still give immunizations
pursuant to a protocol with a prescriber.
3.Adds all of the above provisions to the Pharmacy Law section
specifying actions for substitution of a generic drug.
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Background
Biological products and biologics . Biological products are
generally derived from living material, human, animal, or
microorganism and FDA regulations specify that biological
products include blood-derived products, vaccines, in vivo
diagnostic allergenic products, immunoglobulin products,
products containing cells or microorganisms, and most protein
products. These treatments are not widespread but rather used
as specialty drugs to treat very ill patients; according to
information provided by the author from a MarketScan report,
there were almost 380 million pills dispensed in California in
2011, with only 1.7 biologic prescriptions dispensed per week
from the over 5,000 retail pharmacies in California,
representing just .13% of all prescriptions dispensed by retail
pharmacies.
According to the FDA, biologics are regulated under the federal
PHSA while drugs, including insulin and other hormone therapies,
are regulated under the FDCA. Both the FDA's Center for Drug
Evaluation and Research and Center for Biologics Evaluation and
Research have regulatory responsibility for therapeutic
biological products, including premarket review and oversight.
Following initial laboratory and animal testing that show the
use of a particular biological product in humans is reasonably
safe, biological products (like other drugs), can be studied in
clinical trials in humans under an investigational new drug
application. If trials and studies demonstrate that a product
is safe and effective for its intended use, the FDA may then
approve the market of a biologic by granting a biologics
license.
According to background information provided by the author's
office and stakeholders, both in opposition to and support of
this bill, biologics are large, complex protein molecules used
in the treatment, diagnosis or prevention of disease. These are
quite different from small molecule drugs, pills, which are not
as structurally complex and are instead relatively simple,
organic substances produced by chemical methods. Biologic
medicines, on the other hand, are made in living organisms to
produce proteins by genetically modifying cell constructs or
cell lines. Biologics are grown, cultivated and purified and
are typically administered as injectables.
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Biosimilars . Biosimilars are similar but not identical versions
of the original biologic. The active ingredient of a biosimilar
is expected to closely resemble that of the original biologic
and unlike generic pills which require the active ingredient to
be identical, the exact manufacturing process of an original
biologic cannot be exactly duplicated. Biosimilars are not
clinically identical to their reference products. Biosimilars
have been defined by the World Health Organization as "a
biotherapeutic product which is similar in terms of quality,
safety and efficacy to an already licensed biotherapeutic
product," by the European Medicines Agency as a "copy version of
an already authorized biological medicine product with
demonstrated similarity in physiochemical characteristics,
efficacy and safety, based on a comprehensive comparability
exercise," and by the FDA as a biological product which is
"highly similar to the reference product notwithstanding minor
differences in clinically inactive components and for which
there are no clinically meaningful differences between the
biological product and the reference product in terms of safety,
purity and potency of the product."
In response to increases in an aging population and larger
numbers of patients suffering from chronic disease, there has
been a rise in use of biologics, and accordingly, a rise in the
production efforts of biosimilars. Biosimilars go through an
extensive review process and manufacturers are required to
submit immense studies and data demonstrating a products'
efficacy and ensuring it is safe for use by consumers.
Manufacturers also have to establish ongoing monitoring programs
to ensure the safety of biosimilars. While biosimilars are
currently available in the European Unions, and other nations
are in the process of adopting guidelines and regulatory
processes, biosimilars are still a relatively new option in the
larger health care delivery and treatment conversation.
A pathway for biosimilar regulation in the U.S. was established
as a provision of the Patient Protection and Affordable Care Act
(ACA) and, in 2012, the FDA issued draft guidelines for
biosimilars. The guidance included which types of studies
manufacturers should undertake in order to ensure product
safety, potency and purity. However, there is no definitive
timeline or date by which biosimilars will be available and on
the market in the U.S. due to the complexity involved in their
development and production.
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Comments
According to the author, "SB 598 updates existing law so when
the FDA approves interchangeable biosimilars, California
pharmacists can substitute the lower cost biosimilars for brand
name biologics." The author believes this bill is necessary
because biosimilars are not defined in California law and
existing definitions for generic pills do not apply to these
unique medicines. The author's office states that this bill
mirrors patient protections for substitutions of generic pills
and that adverse reactions with biologic medicines, which occur
when a patient's body rejects a biologic medicine, will be more
easily tracked through accountability measures like notifying a
physician when a biosimilar is substituted for a biologic,
requiring that records of substitutions are kept and requiring
the Board of Pharmacy to keep a list on of interchangeable
biosimilars on its Internet Web site. According to the author's
office, notifying the prescribing physician, after dispensing,
does not alter the policy goal of offering alternative, lower
cost options for patients. The author's office believes that
this notification provides a record of the substitution, so that
in the event of an adverse reaction, which may not manifest
until many months after the biosimilar was administered, health
records can reflect these contraindications. The author
intended to allow flexibility in how notification is provided
and as such, this bill does not specify how a notification must
be transmitted or noted in a patient's record.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Assembly Appropriations Committee, contingent
on future federal FDA approval of biosimilars, biosimilar
substitution could result in significant future savings in state
health programs (primarily Medi-Cal, California Public
Employees' Retirement System, and correctional health). Like
generic versions of brand-name drugs, biosimilars are likely to
be lower in cost than the prescribed biologics. Given that the
FDA's approval process has not been finalized and no biosimilars
are available, it is difficult to precisely estimate when and to
what extent potential savings from biosimilar substitutions will
accrue. Actual savings will depend on the biosimilar
penetration rate and the cost difference between biosimilars and
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reference products. However, given plausible estimates of these
variables, it is reasonable to assume cost savings to the state
could eventually be in the tens of millions of dollars annually.
SUPPORT : (Verified 8/27/13)
Abbvie, Inc.
Actavis
AIDS Institute
AIM Melanoma
Alliance for Patient Access
Alliance for Safe Biologic Medicines
Alliance of Specialty Medicine
American Academy of Facial Plastic & Reconstructive Surgery
American Association of Neurological Surgeons
American Association of People with Disabilities
American Autoimmune Related Diseases Association
American College of Mohs Surgery
American Council on Science and Health
American Gastroenterological Association
American Society of Cataract and Refractive Surgery
American Society of Echocardiography
American Society of Plastic Surgeons
American Urological Association
Amgen
Association of Black Cardiologists
Association of Clinical Research Organizations
Association of Gastrointestinal Motility Disorders, Inc.
BayBio
BIOCOM
Biotechnology Industry Organization
Blue Ribbon Advocacy Alliance
California Healthcare Institute
California Medical Association
California Prostate Cancer Coalition Advocates
California State Association of Electrical Workers
California State Pipe Trades Council
Coalition of State Rheumatology Organizations
Colon Cancer Alliance
Colorectal Cancer Coalition
Congress of Neurological Surgeons
Congresswoman Anna G. Eshoo
CONNECT
Genentech
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Global Healthy Living Foundation
Greater Sacramento Urban League
HealthHIV
Institute of Health Law Studies, California Western School of
Law
Interamerican College of Physicians and Surgeons
International Cancer Advocacy Network
International Myeloma Foundation
International Union of Operating Engineers
Jenny's Quest-Cure for Pediatric Brain Stem Cancer
Kidney Cancer Association
MANA
MedImmune
Merck & Co., Inc.
National Alliance on Mental Illness
National Hispanic Medical Association
National Kidney Foundation
National Multiple Sclerosis Society
National Physicians Biologics Working Group
North American Spine Society
Pharmaceutical Research and Manufacturers of America
RetireSafe
San Diego Center for Patient Safety, UC San Diego School of
Medicine
Society for Cardiovascular Angiography and Interventions
Society for Excellence in Eyecare
State Building and Construction Trades Council
TechNet
UCB, Inc.
Western States Council of Sheet Metal Workers
OPPOSITION : (Verified 8/28/13)
Anthem Blue Cross
Boehringer Ingelheim
California Association of Health Plans
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists
California Public Employees' Retirement System
California Retailers Association
California Teamsters Public Affairs Council
CVS Caremark
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Engineers and Scientists of California, IFPTE Local 20
Express Scripts
Generic Pharmaceutical Association
International Longshore and Warehouse Union
Kaiser Permanente
Mylan Labs
National Association of Chain Drug Stores
Novartis Pharmaceuticals
Professional and Technical Engineers, IFPTE Local 21
Teva Pharmaceutical Industries, Ltd.
United Food and Commercial Workers Western States Council
UNITE-HERE, AFL-CIO
Utility Workers Union of America, Local 132
Walgreens
ARGUMENTS IN SUPPORT : Supporters argue that the bill will
save the state and consumers money by allowing less expensive
biosimilar medications to be automatically substituted by
pharmacists. These are lower cost alternatives to brand name
drugs. They state, "Without the bill, pharmacists would not be
able to switch the cheaper drugs for the more expensive ones."
Supporters include biologic and biosimilar manufacturers,
representatives of chronically ill patients, alliances of
physician and research groups, as well as organizations for
California's life sciences community who believe that it is a
common sense measure which will ensure patient safety without
delaying the introduction of biosimilars to the California
market. Supporters highlight the differences between
biosimilars and other generic drugs, resulting in a need for
prescriber notification to ensure accurate patient records are
maintained. Supporters believe that substitution of biosimilars
for biological products will improve patient access to these
often life-saving medicines, but note that there need to be
certain accountability measures taken, given the unique and very
sensitive nature of these drugs. Supporters agree that the
prescriber notification guarantees that physicians maintain
knowledge about what medication their patients receive.
Supporters note that the physician notification provision is
identical to that contained in SB 1301 (Hernandez, Chapter 455,
Statutes of 2012) which passed the Legislature with unanimous
bipartisan support and was signed by the Governor. That bill
required physician notification if a pharmacist extended a
prescription from 30 days to 90 days.
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The California State Pipe Trades Council, California State
Association of Electrical Workers, and Western States Council of
Sheet Metal Workers write, "For many of the working men and
women in our industry, including their families and our retired
members - who suffer from one or more chronic illnesses,
biologic medicines represent life-changing, and often
lifesaving, therapies. This new generation of treatments has
transformed the health and lives of our patients and has given
them hope for recovery. In the next couple of years, biosimilar
medications are expected to enter the U.S. healthcare market.
They are copies of an original biologic medicine and hold the
promise of providing similar results as the original biologic at
a lower price. However, unlike generic drugs, biosimilars are
not structurally identical to the biologic products they seek to
copy; thus the name biosimilar. Due to the sensitive nature of
biologics, the slightest variation from the original biologic
medicine can result in an immune response or other patient side
effects. As important as these new therapies are to patients in
California, it is just as important that public policy ensures
the safety of the patients who rely upon them."
ARGUMENTS IN OPPOSITION : Opponents, including manufacturers
of generic drugs, health plans and retailers, argue that this
bill creates barriers to biosimilars entering the California
market, will restrict insurers' ability to provide affordable
options to patients and that California is unnecessarily making
changes before the FDA has weighed in on the issue of
substituting biosimilars. Hospira, Teva Pharmaceuticals, Inc.,
Boehringer Ingelheim and the Generic Pharmaceutical Association
believe that SB 598 is premature and is intended to create doubt
about the safety and effectiveness of affordable biosimilar
drugs and will prevent patients from accessing more
cost-effective, lifesaving medications. Kaiser Permanente notes
that the organization would be able to comply with the
provisions of this bill but that it does not support public
policy which provides artificial and unnecessary barriers to
safe and low cost alternatives for patients. Health Access
California writes that the use of generics has helped to control
health costs even as prescription drugs have become an even
bigger share of health care costs and that there is no reason to
create additional barriers to the prescribing of biosimilar
drugs beyond those in place for generic drugs. The California
Retailers Association and CVS Caremark are concerned that there
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is not a clear public policy rationale for pharmacies being
required to keep records of biosimilars dispensed and that
physician notification increases pharmacist workload. Blue
Shield, states that this bill contains a provision that only
allows for substitution if the biosimilar product costs the
patient less, which wile seemingly pro-consumer, would be a de
facto ban on biosimilar substitution because there are not
separate cost sharing rules in the standardized benefit designs
established by the California Health Benefit Exchange.
The California Public Employees' Retirement System (CalPERS)
writes, "While SB 598 would allow biologics to be substituted
under State law, the bill imposes unnecessary physician
notification requirement son pharmacists that could potentially
reduce the number or prescriptions substituted with biosimilars.
If CalPERS is unable to realize the full savings from
interchangeable biosimilar products, we may ultimately be forced
to raise prescription drug co-payments or health insurance
premiums, shifting even more increasingly unaffordable health
care costs onto our members and their families."
ASSEMBLY FLOOR : 60-4, 8/26/13
AYES: Achadjian, Alejo, Allen, Atkins, Bigelow, Bocanegra,
Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon,
Campos, Chau, Chávez, Conway, Cooley, Dahle, Eggman, Beth
Gaines, Gatto, Gomez, Gonzalez, Gordon, Gorell, Grove, Hagman,
Hall, Harkey, Holden, Jones, Jones-Sawyer, Levine, Linder,
Logue, Maienschein, Mansoor, Medina, Melendez, Mitchell,
Morrell, Mullin, Nazarian, Nestande, Olsen, Pan, Patterson,
Perea, V. Manuel Pérez, Quirk, Quirk-Silva, Salas, Stone,
Ting, Wagner, Waldron, Weber, Wilk, Williams, John A. Pérez
NOES: Bloom, Frazier, Lowenthal, Yamada
NO VOTE RECORDED: Ammiano, Chesbro, Daly, Dickinson, Donnelly,
Fong, Fox, Garcia, Gray, Roger Hernández, Muratsuchi, Rendon,
Skinner, Wieckowski, Vacancy, Vacancy
MW:ej 8/28/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
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