LEGISLATIVE BILL ANALYSIS

2013-14 SESSION

Sent to: Office of General Counsel 17th Floor, 333 Market Street; Office of Legislative Affairs, 238 Main Capitol; Governor’s Policy Office, 506 Finance Building and Budget Office, 7th Floor Verizon Tower 303 Walnut Street. Please also forward a copy to your agency Chief Counsel.

BILL NO:SB 514P.N.:464PRIOR P.N.:N/A

PRIME SPONSOR AND KEY CO-SPONSORS:VANCE, Kitchen, Baker, Mensch, Hughes, Et Al.

AGENCY:HEALTHAGENCY CONTACT:Will Freeman

TELEPHONE: (717) 783-3985DATE PREPARED:February 24, 2015

  1. Agency’s Recommended Position: Positions are “Support”, “Support with Amendments”, “Neutral”, “Neutral with Amendments”, “Oppose”, “Oppose Unless Amended” or “No Position”. Provide a rationale for the position.

Neutral. The Department continues to review this issue and awaits further FDA guidance on the issue.

  1. Bill Summary: Provide a quick overview of the bill in non-technical terms.

This bill amends the Pennsylvania Generic Equivalent Drug Law to allow pharmacists to automatically substitute a less expensive approved biosimilar pharmaceutical for a biologic pharmaceutical.

This bill would clarify the language in the Pennsylvania Generic Drug Equivalent law to allow PA pharmacists to substitute FDA approved biosimilars for the brand-name drug. The bill maintains the patient’s right to receive the brand name drug if he/she so chooses and maintains the prescriber’s right to specify that the brand name must be dispensed.

  1. Background: (a) Describe existing law and practices as they relate to the issue(s) the bill address(es). (b) If known, describe the reason the bill was introduced or the problem the bill is trying to fix. (c) Has the bill been re-filed from a previous session?

a)Due to the complex nature of large molecule biologic drugs, generic bioequivalent versions have not been recognized by the Federal Food and Drug Administration (FDA) and thus, are not substitutable under current generic drug substitution laws.

The Patient Protection and Affordable Care Act (Affordable Care Act), signed into law by President Obama on March 23, 2010, amends the Public Health Service Act (PHS Act) to create an abbreviated licensure pathway for biological products that are demonstrated to be “biosimilar” to or “interchangeable” with an FDA-licensed biological product. A biological product may be demonstrated to be “biosimilar” if data show that, among other things, the product is “highly similar” to an already-approved biological product.

Since passage of the Affordable Care Act the FDA has been establishing standards for licensure to ensure the safety and effectiveness of biosimilars.This change in the federal law permitted and encouraged the FDA to create a process for approval of “biosimilar” equivalent versions of biologic drugs, and on February 9, 2012 the FDA published draft guidance for this approval process.

This new process for approval of biosimilars is very different than the current process in which FDA rates and approves generic drugs as identified as bioequivalents in the Federal Orange Book. Currently, under PA law, an approved biosimilar product may not be recognized as substitutable in Pennsylvania because the current law allows substitution only of an A-rated bioequivalent drug as identified in the Federal Orange Book of approved drug products.

b)The Department is not aware of the reason for filing this bill. Presumably, the bill promotes consistency with federal law and the intent to support procedures that will bring biosimilar drugs to market.

c)To the Department’s knowledge, this bill is not re-filed from a previous session.

  1. Analysis: Provide detailed description of each provision and the impact of each provision on current operations. Does your Agency have current or planned programs which would solve the problem without legislation? If so, describe.

The bill’s impact on the Department of Health is minimal. Pharmacies and pharmacists are primarily affected by the bill and neither are regulated by the Department.

Currently, Section 5 of the Pennsylvania Generic Equivalent Drug Law, which this bill amends, establishes power and duties of the Department to

(1)Administer and enforce the provisions of the act

(2)Adopt necessary regulations

(3)Publicize the provisions of the act

(4)Publish the addition or deletion of drugs

The effect of the bill is to add interchangeable biosimilars to the list of drugs that the Department publishes.

In addition, section 5 (b) authorizes the Secretary of Health to deny recognition of a drug as an interchangeable biosimilar.

PN 1554 provides updated definitions of “Biosimilar” and “Interchangeable Biosimilar” as well as greater flexibility in which a pharmacist can notify a prescribing physician that a biosimilar substitution occurred. Along with this change, the required time period for record keeping of the substitution was decreased to two years from five and allows for electronic record keeping, and no longer applies to over the counter biosimilar products. These changes have no impact on the department or its operations.

  1. Fiscal and Economic Impact: Describe and quantify the fiscal impact (increased workload, additional costs, revenue gain or loss) on your agency. Include costs for the current year and next full fiscal year.

Minimal anticipated costs for updating amended law on the Department’s website.

  1. Legal Issues: Identify and explain any legal issues or problems with the legislation (consult OGC legal analysis checklist for legislation).

None.

  1. Other Affected Agencies: List other affected agencies and notify them.

PA Dept. of State, State Board of Pharmacy

  1. Pros and Cons: Provide brief arguments in favor of and in opposition to the bill.

Pro:

This bill would allow biosimilars once approved to be substituted for brand-name drugs in Pennsylvania, possibly providing savings to consumers and third party insurers.

Con:

Potential for general concern related to unforeseen problems associated with encouraging dispensing of approved biosimilar drugs ratherthan well established brands.

  1. Proponents and Opponents: List any organizations that may be in support or opposition. Speculation is acceptable. If known, identify the legislator(s), private part(ies), and/or interest group(s) behind the bill.

Likely supporters:

Generic drug manufacturers

Insurers

Consumers

Likely to be opposed:

Brand name drug manufacturers

  1. List the Names, Office or Program, and Phone Numbers of the staff, including the agency attorney(s),hat participated in completing this bill analysis. (Please add names as the analysis is further reviewed or amended by each of the following: )

OFFICE/PROGRAM / NAME / TITLE / PHONE NUMBER
Agency Legislative Affairs Director / Neil Malady / Director / 717-783-3985
Agency Policy Director
Agency Budget Analyst
Agency Chief Counsel / Jim Steele / Deputy Chief Counsel / 717-783-2500
Quality Assurance / Christine Filipovich / Acting Deputy Secretary / 717-346-8119
Theresa Ritchie / Drug Specialist / 717-783-1379
Office of Legislative Affairs / Will Freeman / Legislative Specialist / 717-783-3985

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