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Fate of biosimilars hangs in limbo of healthcare reform debate

BY Alaric DeArment

WASHINGTON —While it appeared all but certain a few months ago, the possibility of biotech drugs facing competition from follow-on knock-offs has become caught in the legislative traffic jam holding up healthcare reform.

Legislation to create a regulatory approval pathway for biosimilars has been tied into the healthcare reform bills that have generated controversy throughout the country and turned town hall meetings into shouting matches, leaving its fate uncertain.

“If [healthcare reform] fails to win passage in Congress, then we are back to square one,” IMS Health analyst Doug Long told Drug Store News.

If it does pass, however, it will mark the beginning of a new competitive and regulatory era for drugs and the stores that sell them.

Under current legislation, the most likely scenario is a 12-year market exclusivity model for biotech drugs, whereby innovated biologics would remain on the market for 12 years before facing competition from biosimilars, compared with the five-year model for pharmaceutical drugs. The biotech industry has adamantly pushed for longer exclusivity periods, contending that unlike pharmaceutical patents, biologic patents cover the process used to make them rather than the drugs themselves, which would allow a biosimilar manufacturer to use a different process to create a similar drug, thus circumventing the innovator company’s patent. A longer exclusivity period would prevent the Food and Drug Administration from using an innovator company’s product data to approve a biosimilar until the exclusivity period ended, even if the biosimilar manufacturer had found a way around the innovator’s patent.

A longer exclusivity period would also add to the factors making a biosimilars market quite different from the existing generic drug market. “Since these products will be similar instead of interchangeable, players in the space will have to have sales forces to call on docs and hospitals and have marketing departments,” Long said.

Creating those marketing departments requires a lot of money, as do developing research and development facilities and conducting clinical trials. According to some estimates, developing manufacturing facilities for biotech drugs can cost anywhere from $250 million to $450 million. The high costs limit the creation of biosimilars divisions to the handful of companies that already have them—such as Sandoz, Teva and Dr. Reddy’s Labs—and the larger generic and branded companies that have expressed an interest, such as Mylan and Pfizer. These factors, Long said, would conspire to create a smaller pool of manufacturers.

“I would see fewer players in the market, and they would be a combination between generic companies and brand/bio companies,” Long said.

The regulatory environment would likely be a lot more complex than the one for generic drugs, as well. When a company wishes to market a generic, it simply files an abbreviated new drug application with the FDA, certifying that its drug is chemically and functionally identical to its branded counterpart. With the FDA’s approval, the company can use machines to crank out one bottle after another. Biologics, on the other hand, are manufactured inside living cells, meaning subtle genetic differences between the cell line used to make an innovated biologic and the one used to make the biosimilar can result in drugs with different effects on patients. Because of this, biosimilars would have to undergo testing for immunogenicity, the ability of a substance to provoke an immune system response.

“Testing for immunogenicity is standard and expected these days,” Tufts University Center for the Study of Drug Development senior research fellow Janice Reichert told Drug Store News. “This should be a fairly straightforward step for any biosimilars. The FDA will likely use existing guidelines; there should be no need to set up new ones for biosimilars.”

Despite requirements for pre-clinical and clinical trials for biosimilars, the process would probably not be as rigorous as the one for innovated biologics.

“In theory, the whole development process for a [biosimilar] should be faster and cheaper to do, since it was done once already by the innovator company,” Reichert said. “The requirement for phase 3 studies, which can commonly take two to three years, should not apply, for example.”

The relative ease and inexpensiveness of developing generic pharmaceutical drugs has allowed scores of small companies to compete with branded drug makers, in some cases resulting in drugs with 20 or more generic competitors that reduce the price and force the brand company to withdraw its product. This has helped pave the way for the $4-generics programs offered by many retailers, but customers at retail and specialty pharmacies are unlikely to see $4 monoclonal antibodies any time soon. Nevertheless, biosimilars could still create opportunities.

“The new and expanding field of specialty pharmacy could bring more biologic products into the pharmacy space, meaning some biologics that are now limited to clinics and hospitals will join insulin and the few others now in pharmacy,” Long said. “If the experience with small molecules is any indicator, pharmacy could enjoy good margins with biosimilars, although maybe not quite as robust as with chemical drugs.”

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Bartell forges ahead with another store opening

BY Alaric DeArment

SEATTLE Before the linoleum in its two newest stores even has a chance to get dirty, Bartell Drugs will open another store.

The Seattle-based regional chain announced the Friday opening of its 57th store, in Overlake Center at 5700 East Lake Sammamish Parkway SE in Issaquah, Wash. A ribbon-cutting event will take place at 10 a.m. Pacific time Tuesday.

The 16,395 sq.-ft. store is the third Bartell’s to open in 2009, following the openings of stores in Lynnwood, Wash., and Mill Creek, Wash., in July and August, respectively.

“We have been working towards opening a location in Issaquah for a number of years,” chairman and CEO George Bartell said in a statement. “We’re very excited about this new location and look forward to serving the needs of the community.”

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CVS/pharmacy marks a milestone with 7,000th store

BY DSN STAFF

LITTLE CANADA, Minn.

The sun was shining bright and spirits were high as CVS Caremark executives and city and state officials gathered here on Thursday to celebrate the grand opening of the pharmacy retailer’s 7,000th store.

“I am certainly delighted to see such a terrific turnout, and just when we were getting ready to start you can see the sun came out, and we think that is a very good sign as we open our 7,000th store,” Larry Merlo, president of CVS/pharmacy, told attendees of the milestone event.

The new store marks the company’s 41st location in the state and the 7,000th store since the retailer first opened its doors in Massachusetts in 1963 initially under the “Consumer Value Stores” banner. The company entered the state of Minnesota five years ago and today employs more than 1,000 people in the state.

In talking with Drug Store News, Merlo said the company has a healthy pipeline of stores and is looking to open between 275 and 300 stores a year nationwide — which, not including acquisitions, is pretty consistent with its number of openings in the last three to four years.

“We still have lots of opportunity for growth,” Merlo said.

Nested along busy Rice Street, at 2650 Rice St. to be specific, the new 13,000-sq.-ft. store is the retailer’s current prototype with a full-service pharmacy and double-lane drive-thru; digital photo cafe that provides customers with a relaxing atmosphere while they customize and print their own pictures; and a complete line of health and beauty products, general merchandise and convenience food items.

While this newest location does not feature a MinuteClinic, there is a MinuteClinic location at a nearby CVS store and, in fact, about two dozen of the CVS stores in the state have a MinuteClinic.

To celebrate the opening, local residents filled the parking lot to enjoy hot dogs and refreshments as the local Johnson Senior High School marching band kicked off the festivities in style.

CVS executives, including Merlo and SVP Hanley Wheeler, addressed the crowd, as did several officials, including Little Canada Mayor Bill Blesener and Minnesota Department of Employment and Economic Development Commissioner Dan McElroy.

“To have 7,000 stores is quite an accomplishment, and we feel quite honored to have store No. 7,000 here in our city,” Blesener said.

The opening of the CVS store is among the latest positive development in Little Canada. Two months ago, the city had another reason to celebrate; a St. Jude medical facility of 190,000 sq. ft opened its doors, which is expected to bring in 650 new jobs to the city.

“With 7,000 locations, we are the largest retail pharmacy in America. As part of CVS Caremark, we are the No. 1 provider of prescriptions in pharmacy-related health services in the country,” Merlo said. “CVS Caremark is the only fully integrated pharmacy healthcare company in the United States, and our pharmacy care services actually allow us to provide a greater a convenience and choice for patients to improve patient outcomes and lower overall healthcare costs.”

During the event, Merlo announced that Minnesota is participating in the company’s free seasonal flu shot program. CVS is partnering with the Department of Employment and Economic Development to provide more than 2,500 vouchers for a free flu shot to the unemployed in Minnesota. The 2,500 vouchers, a $75,000 value, will be distributed through 11 WorkForce Centers in the Twin Cities area.

Nationwide, the retailer is holding more than 9,000 scheduled flu clinics in CVS stores and, as part of the campaign, is providing more than $3 million worth of free seasonal flu shots to unemployed Americans through vouchers good for a free flu shot in any MinuteClinic or any of the scheduled CVS/pharmacy flu clinics.

CVS also handed out flu prevention kits containing CVS brand products like hand sanitizers to the first 100 shoppers at the store.

To further mark the occasion, CVS presented a $7,000 donation to the Courage Center, a Minnesota-based rehabilitation and resource center that advances the lives of children and adults experiencing barriers to health and independence. The donation is in keeping with CVS’ philanthropic program All Kids Can, a five-year, $25 million initiative to help children with disabilities. Accepting the donation on behalf of the Courage Center was Jan Malcolm, CEO of Courage Center.

With the sun in full force, an official ribbon cutting and round of applause wrapped up the presentation as a voice from the crowd shouted, “Let’s go shopping!”

Click here to view photos of the grand opening of the 7,000th CVS store.

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