States Move to Impose Limits on Biosimilar Drug Substitution

In early April, Colorado joined multiple other states in passing a biosimilar substitution law that addresses the circumstances under which an FDA-approved interchangeable biosimilar product may be substituted for the prescribed biological product. The National Conference of State Legislatures (“NCSL”) reports that through the end of 2014, eight states have passed biosimilar substitution laws and a dozen or more states have bills pending in their current legislative sessions. Moreover, at least one State Board of Pharmacy (Idaho) has taken action on biosimilar substitution by proposing an amendment to the regulations governing the practice of pharmacy. Many of the state provisions focus on the type of notice required for biosimilar substitution, who must be notified of the substitution, and when that notice must be conveyed.

As noted in our earlier blog post on Medicare and Medicaid coverage for biosimilars, under federal law an approved biosimilar may be either “interchangeable” or non-interchangeable with its reference product.  If the drug is interchangeable it may be substituted for the reference product without the intervention of the health care provider who prescribed the reference product. The FDA recently approved its first biosimilar, Zarxio, and permitted the product to be labeled for the same uses as its reference biological product, Neupogen (filgrastim), but the manufacturer of Zarxio did not seek an interchangeability determination from FDA. Indeed, the FDA has yet to provide industry guidance on interchangeability -- it appears that the agency expects sponsors to first seek FDA approval for biosimilarity and then subsequently apply for approval on interchangeability, rather than seeking an interchangeable determination in an original biosimilar application.

The emerging state laws address the circumstances under which a pharmacist may substitute an FDA-approved interchangeable biosimilar for the prescribed biologic. Given there are as of yet no biosimilar drugs approved as interchangeable, the state statutes may be viewed as hypothetical in nature. But determinations of interchangeability are bound to happen and pharmacies, PBMs, and payors will want to be cognizant of the applicable limits and conditions imposed on substitution in the various states.

Specifically, the Colorado law permits a pharmacist to substitute a biosimilar for the prescribed reference product if:

• The FDA has approved the biosimilar drug as interchangeable with its reference product;
• The prescriber has not conveyed a limit on substitution to the pharmacist by one of the methods set out in the statute;
• The substituted product will cost the purchaser less than the prescribed product; and
• The pharmacist communicates the substitution to the purchaser in writing and orally, labelling both the container and the prescription accordingly.

Like the Colorado law, other state biosimilar substitution laws address whether a prescriber must be notified of a substitution and how and when that notice is conveyed. Many also establish requirements for recordkeeping at the pharmacy level. But the requirements vary considerably from state to state. For example:

1. Massachusetts’s biosimilar substitution law allows a pharmacist to substitute an interchangeable biosimilar product for the prescribed reference product unless the prescriber has instructed otherwise in writing specific to the patient, but the pharmacist must notify the prescriber of the substitution “within a reasonable time” after making the substitution through one of the specifically prescribed methods.
2. Indiana’s biosimilar substitution law permits a pharmacist to substitute an interchangeable biosimilar product only if the prescriber has indicated “may substitute” on the prescription and the pharmacist informs the customer of the substitution.
3. Florida’s biosimilar substitution law, passed in 2013, allows the pharmacist to dispense an interchangeable biosimilar for the reference product unless the prescriber has expressed a preference against substitution, but the pharmacist must notify the person submitting the prescription of the substitution, the price differential between the biosimilar and the reference product, and their right to refuse the substitution.
4. Utah’s biosimilar substitution law was recently amended to extend the time period for the dispensing pharmacist or his/her designee to record the biosimilar substitution, but the amendment left in place requirements that the purchaser request/consent to the substitution as well as requirements specific to out-of-state mail order pharmacies providing biosimilar drugs to patients in the state.

Pharmacists, PBMs, and payors will want to monitor ongoing state activity in this area and ensure they have mechanisms in place to comply with the applicable state requirements by the time the FDA approves the first interchangeable biosimilar. Mintz Levin’s Health Law attorneys will continue to monitor developments in the rapidly evolving biosimilar area, at both the federal and state levels.

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