BILL ANALYSIS Ó
SB 598
Page 1
SENATE THIRD READING
SB 598 (Hill)
As Amended August 6, 2013
Majority vote
SENATE VOTE :29-4
BUSINESS & PROFESSIONS 12-0HEALTH 14-2
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|Ayes:|Gordon, Jones, Bocanegra, |Ayes:|Pan, Logue, Atkins, |
| |Campos, Bonilla, Hagman, | |Bonilla, Bonta, Gomez, |
| |Holden, Maienschein, | |Maienschein, Mansoor, |
| |Mullin, Skinner, Ting, | |Mitchell, Nazarian, |
| |Wilk | |Nestande, |
| | | |V. Manuel Pérez, Wagner, |
| | | |Wilk |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Chesbro, Lowenthal |
| | | | |
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APPROPRIATIONS 15-0
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|Ayes:|Gatto, Bigelow, | | |
| |Bocanegra, Bradford, Ian | | |
| |Calderon, Campos, | | |
| |Donnelly, Eggman, Gomez, | | |
| |Holden, Linder, Pan, | | |
| |Quirk, Wagner, Weber | | |
| | | | |
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SUMMARY : Permits a pharmacist to substitute a biological
pharmaceutical with a "biosimilar" pharmaceutical in the same
manner as generic drugs are substituted, and for prescriptions
filled prior to January 1, 2017, requires the pharmacist to notify
the prescriber. Specifically, this bill :
1)Permits a pharmacist to substitute a biosimilar for a prescribed
biological product only if all of the following conditions are
met:
a) The product selected as a biosimilar has been approved by
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the federal Food and Drug Administration (FDA) and has been
determined to be interchangeable with the prescribed
biological product;
b) The prescriber does not personally indicate, either orally
or in his or her own handwriting, "Do not substitute," or
words of similar meaning, as specified; and,
c) For prescriptions filled prior to January 1, 2017, the
pharmacy notifies the prescriber within five business days
whether the prescription dispensed was a biological product
or an interchangeable biosimilar, or enters the information
in a patient record system shared by the prescriber.
However, 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.
2)Prohibits a biosimilar substitution if the prescriber personally
indicates "Do not substitute," as specified.
3)States that substitution is within the discretion of the
pharmacist, unless the prescriber indicates otherwise.
4)States that the pharmacist who selects the biosimilar to be
dispensed according to this bill shall assume the same
responsibility for substituting the biosimilar as he or she
would incur by filling a prescription for a biosimilar
prescribed by name.
5)States that there shall be no liability on the prescriber for an
act or omission by a pharmacist in selecting, preparing, or
dispensing a biological product pursuant to this bill.
6)Prohibits the pharmacist from substituting a biosimilar unless
the biosimilar costs the patient the same or less than the
prescribed biological product, as specified.
7)States that the provisions of this bill shall apply to all
prescriptions, including those presented by or on behalf of
persons receiving assistance from the federal government or
pursuant to the Medi-Cal Act.
8)Requires the substitution of a biosimilar to be communicated to
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the patient.
9)Requires the Board of Pharmacy (BOP) to maintain on its public
Internet Web site a link to the current list, if available, of
biosimilar products determined by the FDA to be interchangeable.
10)States that nothing in this bill prohibits the administration
of immunizations, as specified.
11)States that nothing in this bill 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.
12)Defines the following:
a) "Biological product," "biosimilar," and "interchangeable"
have the same meanings that apply to those terms under the
federal Public Health Service Act, as specified;
b) "Prescription," with respect to a biological product, has
the same meaning as used in the Federal Food, Drug, and
Cosmetic Act, as specified; and,
c) "351(k) pathway" refers to the licensure of a biological
product as a biosimilar or an interchangeable biosimilar by
the FDA pursuant to the federal Public Health Service Act, as
specified.
13)States that no reimbursement is required by this act pursuant
to Section 6 of Article XIIIB of the California Constitution
because the only costs that may be incurred by a local agency or
school district will be incurred because this act creates a new
crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the
meaning of Section 17556 of the Government Code, or changes the
definition of a crime within the meaning of Section 6 of Article
XIIIB of the California Constitution.
FISCAL EFFECT : 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 (CalPERS), and
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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 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.
COMMENTS :
1)Purpose of this bill . This bill will allow pharmacists to
substitute FDA-approved interchangeable biosimilar
pharmaceuticals for biological pharmaceuticals in the same way
that pharmacists currently substitute generic drugs for name
brand drugs. This bill will also require pharmacists to notify
prescribers of the change until 2017. This bill is
author-sponsored.
2)Understanding biologic and biosimilar drugs . A "biologic" drug
is one that is created by biological rather than chemical
processes. Biologics have been available for more than 20 years
and include enzymes, human growth hormones, human insulins,
interleukins, and vaccines. Many biologics are among the most
costly medicines available, ranging from $1,000 to $50,000 per
treatment.
Biologic drugs represent a fast-growing segment of the
pharmaceutical market, constituting 32% of products in the
development pipeline and accounting for around 10% of
pharmaceutical expenditures (as of 2011). The biologic market
is expected to grow more than 20% per year.
A "biosimilar" is a biologic drug that is designed to be
comparable to a particular existing biologic drug, known as the
biologic "reference" drug. Some manufacturers will seek
"interchangeable" status for their biosimilar, a designation
granted by the FDA that means those biosimilar drugs may be
substituted for the biologic reference drug without any expected
change in clinical outcomes.
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There are currently no biosimilars approved by the FDA for use
in the United States, and FDA has not yet received any
applications for a biosimilar. However, as of February 6, 2013,
FDA's Center for Drug Evaluation and Research had received 50
requests for an initial meeting to discuss biosimilar
development programs for 12 different reference products, held
37 initial meetings with sponsors, and received 14
Investigational New Drug applications for biosimilar development
programs.
It is anticipated that biosimilars will substantially reduce
pharmaceutical costs once they are introduced. Industry studies
and academic articles indicate a potential cost savings of
10-40% for a biosimilar compared to a biologic reference drug,
which would potentially expand access to these important but
expensive medications.
This bill will require BOP to maintain on its Web site a link to
the current list, if available, of biosimilar products
determined by the FDA to be interchangeable.
3)Current law on generic substitutions . In practice, this bill
would allow a pharmacist to substitute an interchangeable
biosimilar for a prescribed biologic to save money, in the same
way a pharmacist may currently substitute a generic for a brand
name drug.
Currently, a pharmacist filling a prescription order for a drug
prescribed by its brand name may substitute a generic drug
instead, unless the prescriber personally indicates verbally or
in writing not to substitute. The prescriber is not liable for
the pharmacist selecting, preparing, or dispensing a generic
drug, and a pharmacist may not substitute a generic drug unless
it results in cost savings for the patient.
These existing provisions of law would apply to the substitution
of interchangeable biosimilars as well, except that a biosimilar
may be substituted which costs the patient the same or less than
the prescribed biological product.
4)Prescriber notification . This bill would require a pharmacist
to inform the prescriber of the interchangeable biosimilar
substitution within five business days of the selection, until
January 1, 2017. The pharmacist has the option of notifying the
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prescriber by entering the information in a patient record
system shared by the prescriber.
The three-year sunset on the notification provision was added in
the Senate Business, Professions, and Economic Development
Committee with the understanding that "accountability for
biosimilars may be achieved when California's e-pedigree law,
creating a track and trace system for drugs in this state, is
implemented, or in the event that Congress creates a national
track and trace system. Accountability may also be heightened
through processes created by the FDA for biosimilars and through
natural market channels once biosimilars are utilized more
frequently."
5)Comparing biosimilars with generic drugs . According to the FDA,
a generic drug is identical -- or bioequivalent -- to a brand
name drug. However, a biosimilar is not, and cannot be, the
exact bioequivalent of a biologic reference drug because of
minor variations in the product caused by the high level of
complexity involved in making it.
According to the Biotechnology Industry Organization, "a drug is
typically manufactured through chemical synthesis, which means
that it is made by combining specific chemical ingredients in an
ordered process." In contrast, "[a] biologic is manufactured in
a living system such as a microorganism, or plant or animal
cells.
"The living systems used to produce biologics [and biosimilars]
can be sensitive to very minor changes in the manufacturing
process. Small process differences can significantly affect the
nature of the finished biologic and, most importantly, the way
it functions in the body. To ensure that a manufacturing process
remains the same over time, biologics manufacturers must tightly
control the source and nature of starting materials, and
consistently employ hundreds of process controls that assure
predictable manufacturing outcomes.
"Process controls for biologics are established separately for
each unique manufacturing process/product, and are not
applicable to a manufacturing process/product created by another
manufacturer. These process controls may also be confidential to
the original manufacturer. Therefore, it would be difficult or
impossible for a second manufacturer to make the 'same' biologic
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without intimate knowledge of and experience with the
innovator's process."
Because of these complexities, the FDA has established a new
pathway to approve biosimilar drugs.
6)Biologics Price Competition and Innovation Act . The Biologics
Price Competition and Innovation Act (Act) was enacted as part
of the federal Affordable Care Act on March 23, 2010. The Act
created an abbreviated licensure pathway for biosimilars.
The Act defines "biosimilarity" to mean that "the biological
product is highly similar to the reference product
notwithstanding minor differences in clinically inactive
components" and that "there are no clinically meaningful
differences between the biological product in terms of the
safety, purity, and potency of the product."
FDA sets an even higher standard for biosimilar drugs that a
manufacturer wants to deem "interchangeable" with a biologic
reference drug. To attain interchangeability, according to the
FDA, "a [manufacturer] must provide sufficient information to
demonstrate biosimilarity, and also to demonstrate that the
[interchangeable biosimilar] can be expected to produce the same
clinical result as the reference product in any given patient
and, if the [interchangeable biosimilar] product is administered
more than once to an individual, the risk in terms of safety or
diminished efficacy of alternating or switching between the use
of the biological product and the reference product is not
greater than the risk of using the reference product without
such alteration or switch."
In other words, a patient should not experience a difference
between an interchangeable biosimilar and its reference
biologic. The Act expressly states that a pharmacist or other
dispenser may substitute an interchangeable biological product
for the reference product without consulting the prescribing
doctor.
Analysis Prepared by : Sarah Huchel / B.,P. & C.P. / (916)
319-3301
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FN: 0001857