Will Threats to the ACA Derail Biosimilar Development?

January 14, 2019
Kayt Sukel
Kayt Sukel

With a new ruling against the Affordable Care Act (ACA), many worry about the fate of the biosimilar market. But will it be as detrimental as feared?

Last December, Federal Judge Reed O’Connor made headlines when he ruled that the ACA’s individual coverage mandate violates the Constitution, invalidating the ACA as a whole, in Texas v Azar.

While he later issued a stay in the case, allowing the parties to immediately appeal, there was a largely shaken response from across the healthcare community. If the ruling stands, it could have significant impact on healthcare options, costs, and coverage for pre-existing conditions. But it may also have unforeseen consequences for the biosimilars industry. The Biologics Price Competition and Innovation Act (BPCIA) is part of the larger healthcare reform bill, and provides the regulatory roadmap for biosimilar development and adoption.

In an article posted on the Center for Biosimilars website, Ha Kung Wong, JD, a partner at Venble LLP, said that such a challenge to the ACA would mean the “BPCIA biosimilars pathway would essentially cease to exist.”

He suggested that Congress might have to pass new legislation to support the biosimilar market-and might contain changes that would alter the development pathway, derailing development and commercialization of these cost-saving drugs.

But Kashyap Patel, MD, a physician and advisory board member for the Center for Biosimilars, says, even if the ACA is overturned, there’s no need for biosimilar stakeholders to panic. He believes a second piece of legislation, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), will protect continued biosimilar investment and development.

“MACRA mandates physicians to use less expensive but equally effective treatment alternatives. There is a value-based care track where physicians are incentivized to reduce the order of spending to retain part of their earnings,” he says. “Biosimilar products can help them do that and so I believe we will continue to see interest in these drugs and continued market acceptance.”

Related: Formulary Management for Biosimilars: 4 Payer Challenges

As for concerns that new legislation may be needed to support biosimilar approval and commercialization, Patel says that the development pathway should be preserved through existing rules and regulations at the FDA and CMS.

“Value-based care will still exist under MACRA,” he says. “And the FDA already has a clearly-defined approval pathway for biosimilars with the 351K path. It’s more of a technical rule, it’s not tied to the ACA, so the FDA can continue to define the pathway for biosimilar support irrespective of the BCPIA. The FDA may even use their authority to expedite the approval process and CMS can use their authority to incentivize market acceptance even sooner to push more value-based care.”

Certainly, if the ACA is repealed, it will have far-reaching consequences across the healthcare industry as a whole. But Patel recommends that biosimilar developers, investors, and evangelists “stay the course.”

“As much as there may be new challenges to biosimilars, including the loss of the ACA, the CMS and FDA are using the tools they have at their disposal to really support this new class of drugs,” he says. “While it is always better to have fewer hurdles to development, the loss of the ACA should not cause too much more pain or difficulty as far as biosimilars are concerned.”

Kayt Sukel is a science and health writer based outside Houston.