FDA Approves Biosimilar Agent Zarxio: Dawn of a New Era in Pharmaceutical Therapy and Product Liability Law

by Wilson Elser

The FDA's approval on March 6, 2015, of Sandoz's Zarxio (filgrastim-sndz) is a momentous occasion for pharmaceutical therapy and product liability law in the United States. Catching up with Europe (where Sandoz's identical Zarzio has been marketed since 2009), Zarxio is the first "biosimilar" agent approved by the FDA under abbreviated procedures outlined in the Biologics Price Competition and Innovation Act of 2009 (part of the Affordable Care Act). The approval of Zarxio heralds a new era of less-expensive biologics, a class of therapeutic agents that are among the most expensive in the U.S. market. In laymen’s terms, a biologic agent is an injectable drug that is made from living cells and typically developed to treat a chronic illness. A biosimilar agent has similar ingredients to a biologic drug but is not identical and is manufactured by a company other than the one that manufactured the biologic drug. The approval also foreshadows a new era in product liability law, as plaintiffs’ attorneys are likely to exploit the unique statutory and regulatory status of biosimilar agents in pursuing product liability claims against manufacturers.

What Zarxio Is
The FDA determined Zarxio to be "biosimilar" to Amgen's Neupogen (filgrastim), a biologic agent that promotes the production of infection-fighting white blood cells and has been marketed in the United States since 1991. In making this determination, the FDA found Zarxio to be "highly similar" to Neupogen, with "no clinically meaningful differences” with respect to “safety, purity, and potency." See 42 U.S.C. § 262(i). Zarxio is a large 175-amino acid molecule that is manufactured using recombinant DNA technology in E.coli cells.

What Zarxio Is Not
Zarxio is not a "generic" version of Neupogen. Unlike the typically small-molecule drugs approved as generics under the Hatch-Waxman Amendments of 1984, Zarxio is not a chemically identical (i.e., bioequivalent) copy of its reference (brand-name) biologic, Neupogen. Indeed, Zarxio has a different non-proprietary name (filgrastim-sndz) than Neupogen (filgrastim) and is not considered by the FDA to be "interchangeable" with Neupogen, meaning that pharmacies cannot substitute Zarxio for Neupogen without approval from the prescribing physician.

No Federal Preemption for Failure-to-Warn Claims
Federal preemption for failure-to-warn claims will not be available to biosimilar manufacturers. See PLIVA, Inc. v. Mensing (2011) 131 S. Ct. 2567. Unlike generic drug labels, which must be identical to the label of the brand-name drug (the “duty of sameness”), biosimilar labels are not subject to the “duty of sameness” with respect to the brand-name biologic label. Therefore, there is no basis for federal preemption of failure-to-warn claims against biosimilar manufacturers. Indeed, while some generic manufacturers have faced failure-to-warn liability from allegations that they failed to update their labels to match that of the brand-name drug (see, e.g.,Teva Pharm. USA v. Superior Court, recently declined review by the U.S. Supreme Court), failure-to-warn claims may allege that the biosimilar label is too similar to that of the brand-name biologic. As the argument may be framed: since the biosimilar agent is not identical to the brand-name biologic, neither should the warnings, precautions and instructions in the label be identical.

Likely to Be More Manufacturing Defect Claims for Biosimilars
Since generic drugs tend to be smaller molecules that are chemically synthesized using relatively simpler manufacturing processes, viable manufacturing defect claims are relatively uncommon in product liability litigation against generic drug manufacturers. In contrast, biosimilar agents such as Zarxio comprise much larger molecules produced through very complex manufacturing processes. The more-complex manufacturing processes required to produce biologic agents are, in both theory and practice, more susceptible to variations that can alter the end product. Plaintiffs’ attorneys are likely to exploit this basic difference and manufacturing defect claims are likely to be far more common in product liability litigation involving biosimilar agents compared with generic drugs.

Likely to Be More Design Defect Claims for Biosimilars
It is notable that the FDA declined to give Zarxio the same non-proprietary name as Neupogen. The naming scheme for biosimilar agents has been the subject of much contention, and the FDA’s choice for Zarxio suggests that the Agency wants to employ a naming scheme acknowledging the fact that biosimilar agents are not identical to their brand-name biologics. The FDA’s naming scheme for biosimilars, which has not been finalized, may help foster the perception that biosimilar agents are different from their brand-name biologics. For example, the clinical studies discussed in Zarxio’s label tested filgrastim (i.e., Neupogen), not filgrastim-sndz. Plaintiffs’ attorneys could exploit this perception of “differentness” to support design defect claims, alleging that biosimilar agents are fundamentally different from the brand-name biologic and that the “design” of the biosimilar agent is inferior with respect to safety and/or efficacy. Design defect claims are uncommon in generic drug product liability litigation, but will probably be more common in litigation involving biosimilars.

Likely to Be More Misrepresentation and Advertising-Related Claims Against Biosimilars
Very few generic drugs have active marketing programs supporting them. Generic drug manufacturers usually rely on pharmacies automatically substituting generic versions for the brand-name drug to gain market share. It is therefore important that the FDA did not designate Zarxio to be “interchangeable” with Neupogen. (See 42 U.S.C. § 262(k)(4) for additional clinical evidence required for an “interchangeable” designation.) An “interchangeable” biosimilar agent could potentially be substituted by a pharmacy without a physician’s approval, just like generic drugs. However, for a biosimilar agent without the “interchangeable” designation, a physician will have to specifically order the substitution. What this means is that Sandoz will have to actively market Zarxio to physicians, as if marketing a new brand-name product. Biosimilar manufacturers will need to carefully train their marketing and sales staff, since regulatory concepts such as “biosimilar,” “highly similar” and “no clinically meaningful differences” are new and open to different interpretations and representations by U.S. sales forces and the physicians who are the targets of their marketing. While advertising-related claims against generic manufacturers are rare, they are likely to be more common against manufacturers of biosimilar agents.

Likely to Be More Patent Infringement and Unfair Competition Claims
Sandoz’s announcement that the FDA had accepted its 351(k) application was met with a complaint for patent infringement, conversion and unfair competition by Amgen. Section 351(k) sets forth the requirements for an application for a proposed biosimilar product and an application or a supplement for a proposed interchangeable product. Amgen’s complaint, which was filed in the U.S. District Court for the Northern District of California, seeks declaratory and injunctive relief based on the allegation that Sandoz failed to disclose required manufacturing information to Amgen. Amgen recently filed a motion for preliminary injunction to prevent Sandoz from moving forward with the manufacture or sale of Zarxio. That motion is set to be heard on March 13, 2015. Similar litigation between manufacturers of biologic agents and manufacturers of biosimilar agents is likely to develop as more biosimilar agents are approved by the FDA.

In summary, Zarxio is not only a pioneering product as the first biosimilar agent approved by the FDA, it also heralds a new class of therapeutic agents that is likely to change product liability law in the United States.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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