Randi Hernandez was science editor at Pharmaceutical Technology from September 2014 to May 2017.

Randi Hernandez

	While some industry trade groups are gunning for distinct, nonproprietary names for biosimilars (mostly providers, brand manufacturers, and patient advocacy groups), and others for common names (mostly biosimilar manufacturers, insurers, pharmacies, and the Federal Trade Commission [FTC]), some are requesting that no decisions be made at all at this stage in the game. Express Scripts, a large pharmacy benefit manager (PBM), submitted a comment to FDA asking that the regulatory agency hold off on naming decisions until it releases formal guidance on interchangeability first.

	Express Scripts wrote in a letter to FDA dated Nov. 19, 2015 that it urges the agency “to delay finalizing any nomenclature system for biosimilars excepting those products already approved-until such time that it is ready also to propose its interchangeability standards” and that “only a comprehensive approach that considers both interchangeabilty standards along with how to distinguish them via nomenclature can more effectively mitigate the need for potentially painful and disruptive changes to either standard, or both, in the future.” For a drug to be considered for interchangeability, the sponsor has to indicate that it is filing for this type of status following a biosimilar application. Sandoz, which was granted the first biosimilar approval by FDA for Zarxio (filgrastim), did not apply for its version of filgrastim to have an interchangeability designation.

	All of the stakeholders seem to agree, however, that retrospective alteration of a drug’s name after it has achieved interchangeability should not occur. Thus, even if a drug is considered interchangeable, its name should not be changed to match the originator product’s name after its initial biosimilar name has been determined. As a consequence of this proposal, interchangeable products may not likely be easily identifiable as interchangeable based on name alone.

	Instead, Express Scripts asks FDA to abandon the use of a suffix altogether for naming biosimilars and suggests the use of standard nonproprietary names combined with active use of national drug codes (NDCs). The PBM claims that use of even two biosimilars (for filgrastim and infliximab alone) would produce savings of $22.7 billion during a period of 10 years after biosimilar approvals.

	Importantly, Express Scripts’ letter also acknowledges the differences that can occur among batches of a biologic product, asking FDA if the agency’s approach to naming would require a reference biologic drug maker to “apply different suffixes to any product lines that vary from the composition of the drug filed with the NDA [new drug application] at the time of original application?”

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While some industry trade groups are gunning for distinct, nonproprietary names for biosimilars (mostly providers, brand manufacturers, and patient advocacy groups), and others for common names (mostly biosimilar manufacturers, insurers, pharmacies, and the Federal Trade Commission [FTC]), some are requesting that no decisions be made at all at this stage in the game. Express Scripts, a large pharmacy benefit manager (PBM), submitted a comment to FDA asking that the regulatory agency hold off on naming decisions until it releases formal guidance on interchangeability first.

Express Scripts to FDA: Hold Off on Biosimilar Naming Decisions for Now

	Growing differentiated cells from stem cells may now be a bit easier than before, thanks to the findings from a new study on the production of liver cells. The study, backed by the Centre for Regenerative Medicine and published in 

, finds that laminins may be a crucial element for the successful clinical-scale production and culture of stem cell therapies. The UK Regenerative Medicine Platform, the European Union Seventh Framework Programme, and the German Federal Ministry of Education and Research funded the research.

	Laminins, which are extracellular proteins that are thought to be influential in cell differentiation, migration, differentiation repair, and adhesion, could provide an anchoring substrate to help difficult-to-culture stem cells thrive. Although researchers have explored the 

 in the past, these were typically mouse sarcoma-derived models; there are few reproducible animal-free options that are not associated with significant batch-to-batch variations. According to a press release from the Centre for Regenerative Medicine, existing methods rely on the use of animal tumor-sourced products, which could potentially prove immunogenic to humans.

	Researchers showed that certain laminins-used as substrates for human embryonic stem cell-derived (hESC-derived) differentiation-could prompt favorable "hepatocyte specification and significant improvements in cell function and phenotype" compared with the substrate Matrigel, which is the most commonly used extracellular matrix (ECM). Additionally, stem cell-derived hepatocytes grown on laminin substrates "formed organized structures, and their gene regulatory networks were closer to that of freshly isolated human hepatocytes." In summary, hepatocyte gene expression (phenotype) was better for cells grown on laminin than for those on Matrigel. Importantly, laminin better controlled expression of undifferentiated genes-or the suppression of genes that are not specific to the liver-in the cells of interest. The researchers concluded that the presence of laminins facilitated the large-scale production of human hepatocytes from hESCs and drastically improved cell culture conditions.

	"The development of a defined process to deliver better quality liver cells from clinical-grade stem cells is a significant advance," noted Dave Hay, group leader of the Pluripotent Stem Cell Hepatocyte Development team at the University of Edinburgh's Medical Research Council Centre for Regenerative Medicine, in a press release. "The next step will be to assess their suitability for human use in the appropriate preclinical models."

A study backed by the Centre of Regenerative Medicine found that laminins are crucial cell components that could help aid the commercial production of stem cell therapies.

Laminins Key to Production-Scale Stem Cell Development

	The deal to acquire Allergan will cost Pfizer $160 billion, and if the merger does not go through, 

 the break-up fee would be $3.5 billion. The amount of the termination fee was calculated in advance of any further restrictions on tax inversion deals, however. Evercore ISI's Mark Schoenebaum points out that according to the Pfizer-Allergan merger agreement, the termination fee is lower ($400 million) if the deal is canceled by either party as a result of changes to federal tax laws that restrict or eliminate the benefits of corporate tax inversion.

	The move to acquire Allergan would reduce Pfizer's tax rate from 25% to approximately 18%, according to Pfizer officials, and could allow the company to use the billions of dollars it has in foreign capital to buy back its own shares. This capital has been trapped overseas, limiting Pfizer's purchasing power. To use this capital in the United States, the company would be taxed at the US rate. The executives of Allergan and Pfizer touted the synergies of the deal in an interview with Meg Tirrell of 

-saying the deal is about more than tax benefits-and attested that in the absence of the tax benefits, the deal would still have value, although it would probably be priced differently.

	The Treasury tried to deter further inversion deals by introducing legislation in September 2014 to reduce the desirability of these transactions. The rules attempted to curb inversion by restricting companies from borrowing against overseas profits to fund acquisitions and by limiting the level of ownership US owners can have in an inverted company. The inversion rules caused AbbVie to stop pursuing Shire in 2014, but M&A activity in the pharma sector

 throughout 2014 despite the new guidelines. The Treasury can't technically block inversion deals, but it can impose laws that make the deals less profitable for companies. According to 

, the Treasury is reviewing ways to address the use of foreign tax havens and will present further guidance on the topic later this week.


	Because of overlapping capabilities-particularly in the biosimilar space-Pfizer may have to divest some assets in its pipeline for the Allergan deal to close. Many of the biosimilars in Pfizer's pipeline it acquired when it bought Hospira. Many of these products overlap with Allergan's pipeline, which includes four biosimilar oncology products that are being developed in collaboration with Amgen, including biosimilars to Herceptin (trastuzumab), Avastin (bevacizumab), Rituxan/MabThera (rituximab), and Erbitux (cetuximab). Pfizer has biosimilars in development for three of these four: Rituxan/MabThera, Herception, and Avastin. Pfizer may be able to retain ownership of its biosimilars to Humira (adalimumab), Remicade (infliximab), and Allergan's biosimilar for Erbitux.

	The deal is historic as it is the biggest deal in pharma ever, as well as the biggest deal in any industry in 2015. The deal is structured to give Allergan shareholders control of 44% of the combined company while Pfizer shareholders will have control of 56%-just shy of the required 60%/40% split threshold. It is 

 that the transaction will actually be a reverse merger, in which Allergan is technically the acquirer.

Text from a merger prospectus reveals the termination fee for the proposed Pfizer-Allergan deal would change if any new tax regulations were passed prior to the closing of the transaction.

The $3.5-Billion Pharmaceutical Prenup

	
	Global spending on medications will continue to rise, and it is expected to increase by $349 billion on a constant-dollar basis by 2020-more than $150 billion more than it increased during the past five years, according to a new IMS Institute for Healthcare Informatics report, 

Global Medicines Use in 2020: Outlook and Implications

. Although the spending increase is large, total spending on medicines is expected to increase at a slower rate than it did over the past five years, when spending on medicines increased approximately 35%.

	Importantly, global use of medicines will increase 24% by 2020, with half of the growth in access occurring in India, China, Brazil, and Indonesia. Spending domestically on generics will rise slightly, from 88% to approximately 92% by 2020.

	Although the 2014 version of the same IMS report predicted that the highest growth in spend among the top five European markets would be in Germany and the UK as a result of mandatory discounts and budget changes, respectively, the 2015 version tweaked its predictions a bit. While Germany will likely see an increase in spend, as predicted (an increase of $16 billion by 2020), the 2015 report attributes these increases to "a wider adoption of innovation" through the implementation of health technology assessments. The 2014 version of the report also predicted that the growth in drug spend in Europe would remain relatively flat until 2018 as a result of cost-containment measures-but the 2015 version predicts a $40-billion increase in spend across Europe by 2020, which it says is mostly due to the activity in Germany and to the increased use of specialty medicines in Europe. 

New drug approvals will drive increases in spend


	According to the IMS report, one-third of the 225 medicines that are expected to hit the market will be indicated for cancer; 91% of the novel active substances developed to treat cancer will be targeted therapies (as opposed to cytotoxics, radiopharmaceuticals, and hormonal treatments). If there truly are 225 new medicines approved by 2020, this works out to be approximately 45 drug approvals per year, which is a higher rate of approvals per year than in 2014, when the record-breaking number was 41 drug approvals. The increased number of approvals per year indicates that FDA will be fairly busy until 2020, and suggests that the agency will be working more efficiently to push approvals through the regulatory process, especially when it comes to specialty medications and biologics. Of all of the new treatments, only 150 of the expected new drugs will treat widespread conditions; the other 75 will target orphan indications.

	Faster approval rates mean that more new medicines will flood the market, and logic says that improvements to current treatment options will translate into price increases. "New medicines are substantial: We point to $135 billion in growth in developed markets from new medicines and one can expect that these medicines are more expensive than the ones they replace,” Michael Kleinrock, research director of the IMS Institute for Healthcare Informatics and one of the report authors, told 


	While in emerging markets, a majority of spend (approximately $24 billion) will be for what IMS calls “traditional medicines”-in developed countries (including Europe and the US), only $1 billion or less will be spent on this type of drug. Rather, among 10 different drug types-including drugs for pain, cardiovascular disease, respiratory ailments, antibiotics, vaccines, and drugs for dermatology, mental health, and other central nervous systems conditions-developed countries will spend the most on drugs for diabetes, with estimates clocking in at more than $100 billion by 2020.

	By 2020, developed countries will capture almost half (40%) of the total volume for specialty medications. This figure is not too surprising: In 2014, in the US alone, half of spend on branded medications was for the treatment of hepatitis C ($12 billion of $24 billion) and was spread out over the treatment of 140,000 patients.

Do higher drug spends affect patient cost?


	Although the issue of high drug prices has been on the radar as of late, IMS points out that approximately 30% ($90 billion) of the estimated $298-billion increase in brand spending will be offset by manufacturer discounts and rebates. Thus, the figures for increased spending are somewhat misleading; once discounts, taxes, and “other adjustments that affect net sales” are considered, the spending estimate is reduced considerably.

	As IMS notes in another separate but related report, 

Branded Medicine Price Increases and the Impact of Off-Invoice Discounts and Rebates

, “Price levels for pharmaceuticals in the US market are often reported to the public based on list prices, and therefore do not reflect the series of adjustments that occur throughout the healthcare system and ultimately determine who pays what for medicines.” In that analysis by IMS, the company found that while price increases in 2014 were approximately 14%, after adjusting for price concessions, the true price increase was really closer to 6%.

	Additionally, although invoice prices for drugs are expected to soar, authors of the medicine use report note that payers, pharmacy benefit managers, and competition from biosimilars will help to constrain actual price increases. This may also mean that actual price increases to customers may not be as high as predicted. However, Kleinrock told this publication that the IMS report on medicine use did not specifically examine how the mix of expensive drugs affects the overall spend. “What we’ve addressed is the use of medicines, particularly the shift towards life-saving and specialty medicines, some of which are expensive. In the report, we made a distinction between new medicines-which are often expensive, as they represent advances over previous medicines-and we haven’t looked at the individual costs to consumers," he stated.


	The impact of patent expiry will be larger than it has been in the past five years, and IMS predicts that biosimilars will reduce the impact of drug spending by $41 billion during the period of 2016–2020. The patent expiry predictions for biologics and how these expirations may affect drug spend are fairly indeterminate, however. As IMS notes, while patent expirations are scheduled to occur for a number of autoimmune, insulin, and cancer treatments, “specific products and dates are elusive due to the still evolving US biologics patent law situation.”

The increase in spending is said to be due to increased access to and use of medicines in emerging markets and higher prices for branded, specialty medications in developed markets.

IMS: Global Drug Spending to Increase 30% by 2020

	
	Compared with laser therapy for the treatment of proliferative diabetic retinopathy, Lucentis (ranibizumab injection) was found to be an effective alternative treatment, according to a large study funded by the National Institutes of Health (NIH). An NIH press release attests that “the findings demonstrate the first major therapy advance in nearly 40 years.”

	The study examined Lucentis compared with a laser therapy called panretinal or scatter photocoagulation, which has been considered the “gold standard” treatment for retinopathy caused by diabetes since the 1970s. Lack of blood flow to the retina as a result of swelling prompts the production of vascular endothelial growth factor (VEGF) and the formation of new blood vessels in the eye-both of which can cause retinal occlusion and increased bleeding.

	The study enrolled 305 participants (394 eyes) over 55 clinical trial sites, and laser therapy was compared with Lucentis injections. For those in the study who had diabetes-related retinopathy in both eyes, both treatments were given (one eye was assigned laser treatment, while the other was treated with Lucentis). Some participants were candidates for both therapies in a single eye, as the Lucentis helped clear fluid build-up in the patients in the laser group; slightly half of eyes in the laser group were given Lucentis to clear issues of diabetic macular edema.

	After two years of treatment, researchers determined that Lucentis helped improved vision from baseline “by about a half a line on an eye chart” compared with virtually no improvements in vision in the laser group. Although some subjects lost some side vision with injections, there was substantial loss with side vision in the laser group. The rate of virectomy, which is a procedure used to remove excess vitreous humor in the eye, was performed fewer times in the Lucentis group.

	Importantly, results from the study also suggest that Lucentis may help prevent diabetic macular edema. Among the subjects without macular edema, fewer people receiving Lucentis injections went on to develop signs of the condition than did the subjects in the laser-only group (9% vs. 28%, respectively).

	First marketed as a drug to treat macular edema, Lucentis is an anti-VEGF agent. FDA expanded the approved use for Lucentis to treat diabetic retinopathy in patients with diabetic macular edema in February 2015, and the specific indication received a breakthrough therapy designation from the agency.

	According to a spokesperson at Genentech, which is the manufacturer of Lucentis, the patents for the drug will begin to expire starting in 2019. Two biosimilar manufacturers, Formycon and Pfenex, already have biosimilars for Lucentis in development.

A landmark study by the National Institutes of Health determines that Lucentis is highly effective as a treatment for diabetic retinopathy.

Lucentis Effective for the Treatment of Proliferative Diabetic Retinopathy

	
	AstraZeneca has agreed to acquire ZS Pharma for $2.7 billion, according to a 

 from AstraZeneca. 
	
	ZS Pharma’s leading product candidate is ZS-9, its investigational molecule for the treatment of high levels of potassium in the blood, or hyperkalemia. High levels of potassium are typically associated with kidney injuries, heart failure, or type-1 diabetes. ZS-9, which uses a new ion-trap technology, is believed to work by mimicking the function of physiological ion channels in cells. The proprietary ion-trap technology helps maintain electrolyte gradients by facilitating the uptake of extracellular potassium through special crystals with selective pores. The pores are thought to selectively target ions of a specific diameter; for ZS-9, these ions are potassium and ammonium.

	“ZS-9 complements the company's increasing focus on CKD [chronic kidney disease] and CHF [chronic heart failure], including the investigational medicine roxadustat, which is currently in Phase III development for patients with anemia associated with CKD, as well as its leading diabetes portfolio,” noted the release.

	Upon deal completion, AstraZeneca will wholly own ZS Pharma, which has approximately 200 employees. ZS Pharma’s board of directors has unanimously approved the terms of the agreement.

AstraZeneca will add ZS Pharma’s leading ion-channel candidate to its pipeline.