Yesterday, a federal appeals court upheld two patents for Amgen’s Enbrel (etanercept). Sandoz had petitioned the court to void the patents, and applied to market Erelzi, a biosimilar version of Enbrel.

Enbrel is a biologic that treats five inflammatory conditions. Last year, its global sales were $9.6 billion, with the U.S. accounting for over half – approximately $5 billion.

Availability of a lower-cost etanercept biosimilar could potentially save the healthcare system and patients billions of dollars. In fact, in 2016, the Food and Drug Administration (FDA) approved the biosimilar Erelzi for marketing. But, since then its launch has been delayed by ongoing legal wrangling over patents.

The court decision implies that Amgen maintains patent protection for its blockbuster Enbrel until 2029, which could mean patients won’t have access to a cheaper biosimilar version of etanercept until that time. This represents a major setback for the U.S. biosimilar market. Had the court favored Sandoz, the company would have launched Erelzi, and it would have been the first self-administered, outpatient biosimilar product in the U.S.

Patent disputes and litigation continue to be roadblocks for biosimilar entry in the U.S. Legal tussles regarding originator biologic patents have impeded launches of biosimilars, some of which are stuck in patent purgatory for many years following regulatory approval.

For example, multiple biosimilar versions of Humira (adalimumab) have been approved by the Food and Drug Administration. Yet, they can’t launch until 2023, under a legal settlement reached in 2017.

Not all is doom and gloom for biosimilars in the U.S., however. Recently released data from Ronny Gal and his team at Bernstein Research indicate increasing biosimilar penetration across a number of therapeutic classes. In particular, the market shares of filgrastim, pegfilgrastim, trastuzumab, and bevacizumab biosimilars are expanding.

But, in Europe, biosimilar uptake far outpaces the U.S. Filgrastim biosimilars, for example, have a 94% market share in Europe, compared to 72% in the U.S. Epoetin biosimilars in Europe take up 83% of the market, which dwarfs the U.S. by comparison, where the only approved biosimilar, Retacrit, which references Epogen (epoetin alfa), has a market share of approximately 25%. The leading epoetin biosimilar in Europe, Binocrit, hasn’t yet been approved in the U.S.

Infliximab biosimilars have captured over 70% of the market share in Europe, whereas the U.S. market share for infliximab biosimilars, though increasing, is still less than 20%.

In Europe, fewer patent disputes, less litigation, more transparency in pricing, and healthcare systems that strongly favor biosimilars – in some cases with single tenders in exchange for very steep discounts – incentivize biosimilar uptake.

On the other hand, in the U.S. multiple factors work against biosimilar uptake, with litigation and patent disputes being a feature highlighted in this article. But, payer benefit design decisions appear to be equally important obstacles to more rapid biosimilar adoption. Distorted payer incentives, such as exclusionary contracting for originator biologics, which prevent biosimilars from gaining access to formularies, still impede utilization. Moreover, fail-first, or step therapy requirements that have been adopted in segments of the commercial insurance market, can sometimes operate perversely against biosimilars. Here, a patient’s use and reimbursement of a less expensive biosimilar is sometimes contingent on having first failed on the more expensive originator biologic.

Having de facto perpetual monopolies of originator biologics is not sustainable in an optimally functioning market. A balance needs to be struck between maintaining incentives for research and development of innovator biologics, allowing for biosimilar entry, and improving access through more rational payer benefit design.

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