Sandoz’s Zarxio, the First Approved US Biosimilar, Launches Despite Refusing a “Patent Dance”
Sandoz, the generics and biosimilars division of Novartis, launched the first biosimilar in the United States under the brand name Zarxio (filgrastim-sndz) on September 3, 2015. In clinical development, Zarxio referenced Amgen’s Neupogen (filgrastim) in order to obtain approval via the biosimilars regulatory pathway established by the Biologics Price Competition and Innovation Act (BPCIA). However, Zarxio has experienced several hurdles on its path to market, courtesy of Amgen, and its commercial success is still far from clear.
Zarxio was approved by the FDA in March this year based on the fact that preclinical and clinical evidence demonstrated it is highly similar with no clinically meaningful differences to Neupogen. The FDA granted approval to Zarxio for all five of Neupogen’s indications through the application of ‘indication extrapolation’. By demonstrating comparable safety, purity and potency to Neupogen with supporting clinical evidence from one indication (treatment and prevention of neutropenia in cancer patients receiving myelosuppressive chemotherapy), Sandoz was able to avoid conducting clinical trials for all of Neupogen’s approved indications.
Neupogen is an injectable granulocyte colony-stimulating factor (G-CSF) that treats and prevents neutropenia (low neutrophil count). At the time of Zarxio’s approval Neupogen was approved for:
- Patients receiving myelosuppressive chemotherapy.
- Patients with acute myeloid leukemia receiving induction or consolidation chemotherapy.
- Patients with cancer undergoing bone marrow transplantation.
- Patients with severe chronic neutropenia.
- Mobilization of stem cells in patients undergoing autologous stem cell collection.
Sandoz is not the first company to gain FDA approval of a non-originator version of filgrastim; Teva gained approval of Granix (tbo-filgrastim) via the full biologics license application route in August 2012. However, because Granix was not approved via the US biosimilars pathway (even though it was approved as a biosimilar in Europe), Granix could not benefit from indication extrapolation and is thus only approved for the indication it was clinically tested in (treatment and prevention of chemotherapy-induced neutropenia). This means that Granix is at a disadvantage compared with Zarxio with respect to its reach of potential treatable patients.
Delay through the courts
Zarxio’s launch was delayed because it became the subject of heated court battles between Sandoz and Amgen. The key topics under dispute were:
- Whether or not the BPCIA requires biosimilar developers to disclose their dossier and manufacturing details to the reference product manufacturer and participate in patent negotiation exchanges with the reference product sponsor (often referred to as the “patent dance”).
- Whether or not biosimilar applicants can fulfill the BPCIA’s obligation to provide 180 days’ notification of marketing to the reference brand company prior to FDA approval.
While the courts debated these two topics, Amgen secured an emergency injunction against Sandoz, blocking the launch of Zarxio.
In July of this year, the Federal Circuit agreed with Sandoz that submission of a biosimilar dossier to the reference product sponsor and participation in the patent dance are not mandatory because the BPCIA makes provisions for when these exchanges do not occur. However, the Federal Circuit agreed with Amgen that 180 days’ notice of marketing is only valid if given to the reference product sponsor after approval. Consequently, the injunction preventing Sandoz from launching Zarxio was extended until September 2nd, i.e., 180 days after the biosimilar’s approval, when Sandoz submitted a second notice of marketing to Amgen.
The court case between Amgen and Sandoz has provided important information for other companies attempting to interpret the requirements of the BPCIA. However, both Sandoz and Amgen are seeking further review of the federal court’s decision because the judges failed to agree on all points so further changes to interpretation are possible.
Pricing and competition
Sandoz launched Zarxio at a modest 15% discount to Neupogen’s wholesale price. The current list price discount for the biosimilar is comparable to the list price difference observed in Europe in 2009 when Zarzio was introduced in Europe. Subsequently, however, there has been a decline in both the brand and biosimilar list price over time in Europe. The European biosimilar filgrastim market is complicated by the fact that other manufacturers have launched their own biosimilar versions of filgrastim which further intensifies competition among all filgrastim products. In the United States, Zarxio’s currently mainly competes with Neupogen and Granix, but we expect more filgrastim biosimilars to enter the US market, starting with Apotex’s candidate, Grastofil, from mid-2016. As the competition intensifies, we expect that the net cost of Zarxio, as well as other filgrastim biosimilars, to decrease more significantly, in a similar manner to the European market.
Price is not the only lever than Sandoz can use to maximize uptake however. Sandoz has implemented the Sandoz One SourceTM program which provides patient-support services, prescriber resources and information, as well as a patient-assistance program, to improve the appeal of Zarxio to prescribers and patients. Promoting Zarxio’s long-term post-marketing data from Europe will also help to appease any physician concerns about the product’s safety or efficacy.
Although the US-sales decline for Neupogen began in 2014, full-year 2014 US revenue exceeded $800 million; therefore, Amgen still has a lot to lose from biosimilars and Granix competition. To offset the competition, Amgen is seeking to reignite switching of patients from Neupogen to its longer-acting G-CSF, Neulasta, with the introduction of a more-convenient delivery device (the On-body Neulasta delivery kit launched in March 2015 in the US). This strategy is helping to keep US Neulasta sales on an upward trajectory, but pegfilgrastim biosimilars are also expected to launch in 2016, so we do not expect this strategy to bring long-term relief for Amgen’s G-CSF portfolio.
Amgen has been losing market share to Teva’s Granix throughout 2014 and 2015, despite Granix’s narrower label, underscoring physicians’ and payers’ willingness to use a different filgrastim agent if it is cost-effective. Granix has performed well in the US to date and its presence in the market does partially restrict the opportunity available for biosimilars, but we expect Zarxio and subsequent filgrastim biosimilars to outperform Granix largely due to their broader labels and favorable reimbursement dynamics. Teva could expand Granix’s label, but this would require further investment in clinical trials. At the moment, Teva’s strongest driver for Granix is its time on the market ahead of Zarxio, physicians’ greater familiarity with the product, and reassuring those physicians who are wary of biosimilars that Granix has been developed via a brand pathway in the United States.
The Zarxio US launch comes at a point when the FDA still hasn’t finalized all of its biosimilars guidance; this leaves some important questions unanswered:
- Nonproprietary naming: Zarxio has a placeholder nonproprietary name (filgrastim-sndz) because the FDA hasn’t finalized its position on naming of biological products. If the FDA finalizes the draft August 2015 guidance, Sandoz will need to change Zarxio’s nonproprietary name to one containing a random four-letter suffix, rather than the current, company-specific “-sndz”. From a prescriber’s perspective, a random sequence could be more challenging to recall, but a company-specific sequence could introduce bias against specific product. Until the FDA comes to a decision, the industry is left speculating on the implications.
- Interchangeability: Another pending question is whether Sandoz will be able to gain an ‘interchangeable’ status for Zarxio in future. Until the FDA publishes final guidance on how to demonstrate interchangeability, we can only speculate that Sandoz’s multi-switch clinical study of Zarxio and Neupogen might be sufficient to support approval as an interchangeable biological product. Until that happens, pharmacists will not be permitted to substitute Neupogen for Zarxio without the intervention of the physician.
- Labeling: In the absence of labelling guidance for biosimilars from the FDA, Zarxio has a label resembling a generic drug label; the label containing clinical data from Neupogen studies instead of Zarxio studies. Surprisingly the word “biosimilar” does not appear in the document at all. AbbVie has filed a citizen petition urging the FDA to issue labeling guidance requiring biosimilar manufacturers to provide a “clear statement” that their drug is a biosimilar - not a generic, as well as to specify that it was approved based on data from the reference product. The FDA plans to issue guidance later this year.
Obtaining approval and reaching the market for the first US biosimilar are two important hurdles that Sandoz has now successfully cleared, but many more barriers face Zarxio as it attempts to penetrate the lucrative US filgrastim market. Obtaining interchangeable status, confirming Zarxio’s nonproprietary name and continuing the court battles against Amgen are some of the key challenges ahead. Sandoz will need to react to the ever-changing US regulatory environment, gain the trust and acceptance of payers and prescribers, and develop a pricing strategy that both delivers cost benefits to the healthcare system while remaining profitable.