FDA’s biosimilar user fee program does not appear to be generating revenue very quickly, which may affect the pace of the emerging field.

The agency still has not received a biosimilar marketing application six months after its Oct. 1, 2012 launch, but has said a number of sponsors have submitted INDs or are in early development stages. Still, those figures do not equate to a large amount of user fee revenue, which is to be combined with a nominal amount of treasury funding to grow the biosimilar program.

BsUFA’s current state is not entirely unexpected, but raises questions about when the U.S. biosimilar market, which industry agrees is a growth area, will actually begin to flower.

The agency said April 5 that “12 sponsors have paid for 23 product development fees” in fiscal year 2013. That equates to about $4.5 million in revenue for the Center for Drug Evaluation and Research.

The biosimilar product development fee, a new kind of annual payment created under BsUFA to support early scientific activities during the IND stages, was set at $195,880 for FY 2013.

The development fee was designed to give FDA user fee resources before full biosimilar applications begin to be submitted, but some have grumbled that the upfront nature of the payments could discourage smaller firms from pursuing product development. Marketing applications will cost $1.96 million Also see "FDA Sets Biosimilar Application Fees, But Is Silent On Volume Projections" - Pink Sheet, 31 July, 2012..

CDER also has received 16 biosimilar INDs relating to 12 different reference products. Additional development programs “are proceeding under a pre-IND,” FDA added (see [A#00130408004]).

It appears, based on the revenue stream, that several sponsors may have more than one biosimilar program under way. The data also indicate that some IND holders have yet to pay their product development fees.

The small group of fee payers and IND holders also is more evidence that the biosimilar market likely will grow at a slow pace. Those sponsors with the expertise and confidence to wade into a largely untested U.S. system appear few and far between.

They also may not be enough to create significant savings in health care spending, as the White House and others hope Also see "CMS 2012 Budget Looks To Biosimilars, Brand/Generic Deals To Offset Costs" - Pink Sheet, 21 February, 2011..

Budget Could Include Revised Expectations

The product development fees paid are 22.5% of the prediction in President Obama’s FY 2013 budget request. It suggested that FDA would receive $20 million in biosimilar user fees during fiscal year 2013, which would help it hire 68 new employees for the program.

Most of the hiring would have supported application reviews Also see "FDA's Projected $20 Mil. In 2013 Biosimilar User Fees Translates Into 68 More Staffers" - Pink Sheet, 13 February, 2012..

Obama is expected to release his FY 2014 budget request on April 10. It may illuminate revised expectations for the program, especially if the user fee figures are revised down.

FDA also received $20 million from the Treasury specifically for biosimilars in FY 2013. That amount was a mandated trigger to allow user fee collection and spending Also see "Biosimilar, Generic and Rx User Fees Rely On Different Adjusters For Needed Appropriations" - Pink Sheet, 23 January, 2012..

The existing interest level could be seen as somewhat robust, given that FDA has not approved any official biosimilars and has released only a few guidances indicating how the process will function.

FDA released three draft guidances in February 2012 that outlined scientific and quality considerations to show biosimilarity and other issues Also see "Biosimilar Interchangeability: Stakeholders Want More FDA Guidance, Fewer Hurdles" - Pink Sheet, 30 April, 2012..

On March 29, the agency released a fourth draft biosimilar guidance, which describes the sponsor requirements to request formal meetings during the IND stage ([A#14130329005]).

FDA also expects to release another draft guidance this year addressing submission of clinical pharmacology data as evidence of biosimilarity Also see "Draft Guidances For 2013 Will Grapple With Biosimilars, Track and Trace, Compounding" - Pink Sheet, 11 February, 2013..

A Revenue-Strapped Program

If user fee revenue is expected to help support the biosimilar program, 16 INDs may not be enough.

FDA would receive another $1.8 million if one of those INDs became a marketing application this fiscal year (paid product development fees are subtracted from the marketing application fee when it is filed). That would push the revenue total to about $6.3 million for the fiscal year.

Some potential also remains for more product development fee revenue.

CDER had conducted 38 initial meetings with potential biosimilar sponsors. If the 23 paid product development fees are assumed to have required separate initial meetings and removed from the total, there could be another potential $2.9 million in product development fee revenue this fiscal year, if all those products reach the fee-paying stage.

FDA guidance states initial meetings do not prompt product development fee payments.

The revenue from all sponsors that received an initial meeting, without a marketing application submission, still would be less than half the amount budgeted in the White House FY 2013 spending plan.

FDA understands that product development fees are not going to be the program’s primary revenue source. Janet Woodcock, director of the Center for Drug Evaluation and Research, already has said the biosimilar program likely will be under-resourced for some time, in part because the program is built to make most of its money from establishment, product and other fees.

Woodcock said those funds will not begin flowing into FDA until the U.S. biosimilar industry expands ([A#14120912007]).

Federal budget cuts, including sequestration, also likely are curtailing ongoing agency efforts to grow the program ([A#14130301008]).

A Slow Meeting Pace

The number of early FDA sponsor meetings also does not appear to be maintaining its early pace.

In December 2012, Leah Christl, associate director for biosimilars in the Office of New Drugs, said 34 initial meetings had been conducted and 12 INDs submitted Also see "Biosimilar Meeting Requests Increase, But FDA Cancels Some For Lack Of Data" - Pink Sheet, 12 December, 2012..

On March 15, FDA Commissioner Margaret Hamburg said in a speech to the Massachusetts Biotechnology Council annual meeting that 38 initial meetings had been conducted and 15 INDs submitted.

And on April 2, the initial meeting total was unchanged with one more IND received.

The number of initial meeting requests also has not changed much in nearly five months. Christl said in December that 50 requests had been received, but the total only increased to 51 by April 2.

The RPM Report suggested in a blog post that the slow increase in meetings and IND submissions indicated the pathway is becoming stagnant and that likely no marketing applications would be submitted in 2013. [The RPM Report also is published by Elsevier Business Intelligence, parent of “The Pink Sheet.”]

A stagnating flow of initial meeting requests may be the most telling statistic, because it indicates there are few new biosimilar sponsors preparing development programs.

Those sponsors submitting INDs and requesting meetings now may already be marketing or developing biosimilars in Europe and have a good handle on the expected requirements.

Less-experienced companies may be waiting for more guidance to emerge on how the biosimilar pathway will function.

Even as development action at FDA seems relatively stagnant, legislative action in state legislatures appears relatively brisk as bills that would require patients, physicians and pharmacists to share information and patient records be updated when a biosimilar is substituted for its reference product move forward ([A#00130401011]).

That emerging landscape could be discouraging to sponsors. Submitting a conventional BLA also may be more enticing for a sponsor looking to get a biosimilar product to the market Also see "Are Potential Biosimilar Sponsors Still Hesitant About The Pathway Despite Expected Growth?" - Pink Sheet, 4 March, 2013..

FDA has cleared what might potentially have been classified as a biosimilar had it not used the BLA pathway. Teva Pharmaceutical Industries Ltd.’s Neupogen (tbo-filgrastim) gained approval in August 2012 Also see "Teva’s G-CSF Product Clears FDA, Leaving Appeal Of Biosimilar Pathway Uncertain" - Pink Sheet, 3 September, 2012..

FDA officials have been pushing the potential benefits of using the biosimilar pathway, including the chance to use early analytical work to limit the amount of clinical data needed Also see "Biosimilar Podium Promotion: FDA Emphasizes Advantages Of Abbreviated Pathway" - Pink Sheet, 15 October, 2012..

Sandoz International GMBH also continues to push the agency to create interchangeability guidelines, which are among the most important for biosimilar sponsors Also see "Sandoz Pushing FDA To Make Biosimilar Interchangeability Decisions" - Pink Sheet, 17 December, 2012..

Biosimilars: Does Low BsUFA Fee Revenue Suggest Sponsor Interest Has Stalled?

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