Emerging State Biosimilar Laws – Reference Chart and Five Issues to Watch

As we’ve previously discussed, states have begun to actively regulate the substitution of interchangeable biosimilars before any FDA-approved biosimilar has even hit the market. State biosimilar legislation passed to date has focused on the circumstances under which biosimilar substitution is permitted, notice requirements, and record retention time periods.

We have been tracking state biosimilar legislation and have prepared a chart that summarizes enacted legislation. The chart can be downloaded here and will be updated periodically as state developments warrant.

Below we summarize common requirements across the enacted state biosimilar legislation and identify five issues to watch as states continue to legislate and regulate in this area.

State Legislation Trends

As of July 1, 2015, 16 states have enacted legislation or promulgated administrative rules governing biosimilar substitution by pharmacists. Additionally, 4 states currently have pending legislation that could pass before the end of the current legislative session.

• 14 of the 16 state laws require the pharmacist to notify the prescriber of the substitution.
  • In one of these states, Virginia, the statutory provision requiring prescriber notification expired on July 1, 2015.
  • Similarly, an amendment to Oregon’s law will end the prescriber notification requirement on January 1, 2016.
• 10 state laws require the pharmacist to notify the patient of the biosimilar substitution.
• 3 state laws require the pharmacist to obtain the patient’s affirmative consent prior to dispensing a biosimilar as a substitute for the prescribed biological product.
• 10 state laws require that pharmacies maintain written records of biosimilar substitution for a set period of time, typically 2 years.
• 2 states require that the interchangeable biosimilar must cost less than the prescribed biological product in order for the pharmacist to dispense the biosimilar.
• 3 states require the pharmacist to substitute the biosimilar product unless certain criteria are met.
  • For example, in Tennessee, the prescriber must satisfy fairly strict standards to demonstrate that the prescribed biological product is medically necessary for the particular patient in order to prevent biosimilar substitution.

5 Issues to Watch

1. Biosimilar “Name”: 9 of the 16 state laws require that the pharmacist communicate the name and manufacturer of the dispensed biological product to the prescriber. These laws do not address whether the “name” is referring to the product’s brand name or non-proprietary name. We are still waiting for FDA’s policy decision on whether biosimilar non-proprietary names will be the same as or different from the reference biological product. This decision from FDA will likely have a significant impact on what is considered to be the biosimilar’s “name” for purposes of compliance with state-imposed prescriber notification rules.

2. Orange Book vs. Purple Book: In defining the “interchangeability” of a biosimilar or determining permitted substitutions, 4 state laws refer to FDA’s “Orange Book” and 2 state laws refer to the “Purple Book.” References to the Orange Book may lead to unnecessary confusion down the road, because the Orange Book lists drug products approved under a New Drug Application (NDA) along with the generic drug therapeutic equivalence information. The Orange Book will not contain biosimilar information because those products are approved pursuant to a Biologics License Application (BLA). Instead, the Purple Book – FDA’s “Lists of Licensed Biological Products with Reference Product Exclusivity and Biosimilarity or Interchangeability Evaluations” – will be the relevant source for referencing approved interchangeable biosimilars. This inaccuracy in the state laws may create interpretation issues for Boards of Pharmacy and pharmacists who will have to implement regulations and comply with these new rules.

3. Application to Provider-Administered Products: Most of the recent state laws impose requirements on pharmacists dispensing biosimilar products directly to patients, even though the initial round of biosimilar applications being reviewed by FDA are for biological products that are more commonly (or even solely) provider-administered. We have not seen similar patient notification requirements imposed on prescribers that might be “substituting” an interchangeable biosimilar for its reference biological product in the context of a hospital, clinic, or other health care setting.

4. Medical Necessity Requirements: It will be interesting to see whether any other states take a similar approach to Tennessee’s unique requirement that the prescriber demonstrate medical necessity in order to prevent substitution of the biosimilar.

5. Expiration of Notification Requirements: As noted above, the Virginia prescriber notification provision already expired on July 1^st. Despite an effort to extend it by Delegate John O’Bannon, who introduced the original 2013 biosimilar substitution bill, the Virginia legislature was unable to pass an extension of the prescriber notification requirement. Oregon’s law was also amended to terminate this requirement on January 1, 2016. Stay tuned for whether this issue reemerges as interchangeable biosimilars come closer to entering the market.

We will be hosting a webinar with Bloomberg BNA titled “Will State Action on Biosimilars Thwart Anticipated Savings for Health Care Programs?” on Wednesday, August 5, 2015 at 1 pm. For more information or to register for the webinar, click here. Use the promotion code FIRMDISC25 to receive 25% off your registration fees.

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