Biosimilar Pharmacy Challenges and Opportunities Joint Commission of

Biosimilar: Pharmacy Challenges and Opportunities Joint Commission of Pharmacy Practitioners Steven Lucio, Pharm. D, BCPS Vice President, Vizient January 16, 2019

Vizient is the industry’s largest health care performance improvement company Using our scale to deliver exceptional value to members The top 3, 100 hospitals named to U. S. News & World Report’s 2018 -2019 Honor Roll of Best Hospitals health system members >50% of the nation’s acute care hospitals 20 95% of the nation’s academic medical centers The top 10 hospitals named to U. S. News & World Report’s 2018 -2019 Honor Roll of Best Children’s Hospitals …use Vizient services and/or solutions >20% of the nation’s ambulatory market ≈$100 B In annual GPO purchases ~500 Vizient Clinical Data Base participants $3. 45 billion in member value delivered in 2017 2 Vizient Presentation │ January 2019 │ Confidential Information

Who we serve: our members Vizient serves more than half of the health care organizations across the nation, including: • • • 3 Integrated delivery networks Academic medical centers Independent community hospitals Safety net organizations Pediatric facilities Non-acute health care providers Vizient Presentation │ January 2019 │ Confidential Information

Objectives Discuss barriers and challenges to biosimilar adoption and uptake • Things that are the fault of the biosimilars market • Things that are not the fault of the biosimilars market Describe strategies to overcome these barriers 4 Vizient Presentation │ January 2019 │ Confidential Information

Challenges with the Biosimilar Paradigm

Biosimilar Challenges • Novel concept Challenges with initial launches • Duration of time it has taken to develop and continue to implement to approval process • • 6 Tbo-filgrastim (the non-biosimilar) – Reimbursement challenges at launch – BPCI Act enacted 2010 – First guidances 2012 – First approval 2015 – Lack of vial presentation – Many approved products still not launched – Initial choice of distribution methodology – Some concepts still not finalized (e. g. interchangeability) – Lack of vial presentation • • Filgrastim-sndz Infliximab-dyyb – Reimbursement challenges Patent and litigation challenges Challenges from other agencies – Challenge to the Affordable Care Act Centers for Medicare and Medicaid – Patent dance • – 180 day notification Initial decision for biosimilars to share same reimbursement codes (later changed) • Initial decision to limit “pass through” coverage to first biosimilar of an originator molecule (since changed) Vizient Presentation │ January 2019 │ Confidential Information

Biosimilars Balancing Act Clinical 7 © 2014 Novation Confidential. Structural and Functional Characterization

Understanding Extrapolation Similarity between molecules allows extrapolation 8 Originator Biosimilar Indication #1 Indication #2 Indication #3 Clin Pharmacol Ther 2015; 97: 215 -7. Extrapolation is not from one clinical study of the biosimilar to other indications

Progression of Biosimilar Approvals Name Zarxio Inflectra Erelzi Amjevita • Filgrastim-sndz (place holder) Proposed name: filgrastim-bflm • Infliximabdyyb • Etanercept-szzs • Adalimumab -atto Myelosuppressive chemotherapy • Rheumatoid arthritis Ankylosing spondylitis • Plaque psoriasis • Rheumatoid arthritis Plaque psoriasis • Indications studied • • All indications* • All non. However, no weight orphan based dosing for indications children less than 63 kg (product only available in prefilled syringe) *Since approval, Sandoz has requested removal of psoriatic arthritis and plaque psoriasis indication from label. Indication coverage • All non-orphan indications • • All nonorphan indications • • http: //www. fda. gov/downloads/Advisory. Committees/Committees. Meeting. Materials/Drugs/Oncologic. Drugs. Advisory. Committee/UCM 428780. pdf; http: //www. fda. gov/downloads/Advisory. Committees/Committees. Meeting. Materials/Drugs/Arthritis. Advisory. Committee/UCM 484859. pdf; http: //www. fda. gov/downloads/Advisory. Committees/Committees. Meeting. Materials/Drugs/Arthritis. Advisory. Committee/UCM 510493. pdf; http: //www. fda. gov/downloads/Advisory. Committees/Committees. Meeting. Materials/Drugs/Arthritis. Advisory. Committee/UCM 510293. pdf; https: //www. accessdata. fda. gov/drugsatfda_docs/appletter/2018/761042 Orig 1 s 001 ltr. pdf, accessed April 6, 2018.

What’s in a Name? Two names for biologics Core name = (e. g. infliximab) Proper name = core name plus four letter suffix (e. g. infliximab-dyyb) • Suffix must be unique and devoid of meaning Will ultimately apply to all biologics Why? Prevent inadvertent substitution Improve pharmacovigilance Encourage use of FDA-designated suffixes Advance accurate perceptions about biologicals http: //www. fda. gov/downloads/drugs/guidances/ucm 459987. pdf, accessed May 23, 2018

And Then There Were 16 Product Manufacturer Date Approved Date Marketed 1 Zarxio (filgrastim-sndz) Sandoz 3/6/2015 9/3/2015 2 Inflectra (infliximab-dyyb) Celltrion/Pfizer 4/5/2016 11/2016 3 Erelzi (etanercept-szzs) Sandoz 8/30/2016 ? 4 Amjevita (adalimumab-atto) Amgen 9/23/2016 1/31/2023 5 Renflexis (infliximab-abda) Samsung/Merck 4/21/2017 7/24/2017 6 Cyltezo (adalimumab-adbm) Boehringer Ingelheim 8/5/2017 ? 7 Mvasi (bevacizumab-awwb) Amgen/Allergan 9/14/2017 ? 8 Ogivri (trastuzumab-dkst) Mylan 12/1/2017 ? 9 Ixifi (infliximab-qbtx) Pfizer 12/13/2017 ? 10 Retacrit (epoetin alfa-epbx) Pfizer 5/15/2018 Late 2018? 11 Fulphila (pegfilgrastim-jmdb) Mylan 6/4/2018 7/2018 12 Nivestym (filgrastim-aafi) Pfizer 7/20/2018 13 Hyrimoz (adalimumab-adaz) Sandoz 10/30/3018 9/30/2023 14 Udenyca (pegfilgrastim-cbqv) Coherus 11/2/2018 1/3/2019 15 Truxima (rituximab-abbs) Celltrion/Teva 11/28/2018 ? 16 Herzuma (trastuzumab-pkrb) Celltrion 12/14/2018 ? FDA-approved Biosimilars Products, https: //www. fda. gov/drugs/developmentapprovalprocess/howdrugsaredevelopedandapproved/approvalapplications/therapeuticbiologicapplications/biosimilars/uc m 580432. htm; FDA Approved Drug Products, https: //www. accessdata. fda. gov/scripts/cder/daf/index. cfm

What about Interchangeability? Reference product Biosimilar What is interchangeability vs. substitutability vs. non-medically directed switching? Are interchangeable biologics inherently superior to non-interchangeable biosimilars? Does this designation matter in the health-system setting? In any setting? 12 Vizient Presentation │ January 2019 │ Confidential Information

Things that are not the fault of biosimilars • Transparency and understanding of pharmaceutical manufacturing • Clinician appreciation, familiarity, and acceptance of regulatory processes • Changing nature of drug development practices • Complexity of pharmacy practice environment and absence of alignment of financial incentives • Inability to define value of pharmaceuticals 13 Vizient Presentation │ January 2019 │ Confidential Information

Limited Understanding of Biologic Manufacturing Changes 14 Vizient Presentation │ January 2019 │ Confidential Information

Limited Understanding of Biologic Variability Nat Biotechnol 2011; 29: 310 -312. 15 Vizient Presentation │ January 2019 │ Confidential Information

Limited Understanding and Awareness of Existing Regulatory Processes Survey of 1, 148 physicians (692 respondents) • FDA approval typically means a drug is as effective as drugs approved for the same condition. – True (73%), False (27%) • FDA approval typically means that a drug has benefits that outweigh its harms. – True (85%), False (15%) • In order for a drug to get FDA approval, it has to have… – A statistically significant result (13%) – A clinically important result (11%) – Both results (70%) – Neither of the results (6%) • Physicians with three correct answers (1%) JAMA 2016; 315: 1516 -1518. 16 Vizient Presentation │ January 2019 │ Confidential Information

Do the Same Challenges Apply to Pharmacists? Recent survey of a state’s community pharmacists’ regarding understanding, interpretation, and perceptions of FDA therapeutic equivalency standard Example question: • Two products are deemed bioequivalent if: – Their mean generic/innovator ratios for Cmax and AUC fall within 80 -120% (14. 5%) – Their mean generic/innovator ratios for Cmax and AUC fall within 80 -125% (3. 1%) – The 90% confidence intervals of the geometric mean of their generic/innovator ratios for Cmax and AUC fall within 80 -120% (36. 8%) – The 90% confidence intervals of the geometric mean of their generic/innovator ratios for Cmax and AUC fall within 80 -125% (7. 3%) – Don’t know (38. 3%) Res Social Adm Pharm. 2019; 15: 77 -83. 17 Vizient Presentation │ January 2019 │ Confidential Information

European Crohn’s and Colitis Foundation Position Statement (2013) • “Different biological and biosimilar medicines targeting the same molecule are neither identical in efficacy nor toxicity, even in the same clinical entity. ” • “A biosimilar proven effective and safe for one indication may not necessarily be effective and safe for a second indication for which the reference biological has been shown to be safe and effective. ” • “Specific evidence obtained in patients with IBD should be required to establish efficacy and safety for this specific indication, because experience with currently licensed biological medicines has already shown that clinical efficacy in IBD cannot be predicted by effectiveness in other indications, such as rheumatoid arthritis. ” Journal of Crohn’s and Colitis 2013; 7: 586 -9. 18 Vizient Presentation │ June 2018 │ Confidential Information

European Crohn’s and Colitis Foundation Position Statement (2017) • “Biosimilarity is more sensitively characterised by performing suitable in vitro assays than clinical studies. ” • “Clinical studies of equivalence in the most sensitive indication can provide the basis for extrapolation. Therefore data for the use of biosimilars in IBD can be extrapolated from another sensitive indication. ” • “When a biosimilar product is registered in the EU, it is considered to be as efficacious as the reference product when use in accordance with the information provided in the Summary of Product Characteristics. ” • “Switching from the originator to a biosimilar in patients with IBD is acceptable. Studies of switching can provide valuable evidence for safety and efficacy. Scientific and clinical evidence is lacking regarding reverse switching, multiple switching, and cross-switching among biosimilars in IBD patients. ” Journal of Crohn’s and Colitis 2017; 11: 26 -34. 19 Vizient Presentation │ June 2016 │ Confidential Information

Not All Mindsets Have Changed • “Generally, FDA approval of a biosimilar product is an indication that safety and efficacy are not meaningfully different from the reference product. ” – Not just a general assertion; it IS the definition of a biosimilar • “The FDA approval process for biosimilars makes it less likely that large, phase III trials will be undertaken for all approved indications of the reference product. ” – Not just less likely; it is guaranteed NOT to occur Lyman GH, et al. J Clin Oncol. 2018 Feb 14: JCO 2017774893. doi 10. 1200/JCO. 2017. 77. 4893 [epub ahead of print].

Understanding of regulatory requirements is particularly critical • “…multiple surveys of physicians reveal that even those who routinely use biologic products do not have a clear understanding of biosimilar products. ” • “Physicians are therefore naturally hesitant to prescribe biosimilars — especially given that regulations create the impression that a biosimilar may not be all that similar to its originator. ” • It’s not the regulations, but the lack of understanding of the regulations! Source: Frank RG. Friction in the path to use of biosimilar drugs. N Engl J Med. 2018; 378(9): 791 -793. 21 Vizient Presentation │ June 2018 │ Confidential Information

Changing Nature of Drug Development Top 10 drugs Overall Hospital/Health System Clinic Adalimumab Rituximab Infliximab Insulin glargine Infliximab Pegfilgrastim Etanercept Alteplase Rituximab Ledipasvir-sofosbuvir Immune globulin Nivolumab Insulin aspart Natalizumab Bevacizumab Infliximab Pegfilgrastim Trastuzumab Sitagliptin Nivolumab Epoetin alfa Fluticasone-salmeterol Piperacillin/tazobactam Denosumab Pregabalin Bevacizumab Pembrolizumab Apixaban Trastuzumab Ranibizumab Am J Health Syst Pharm. 2018; 75: 1023 -1038. 22 Vizient Presentation │ January 2019 │ Confidential Information

The Dimensions of Payment (Medical and Pharmacy) Manufacturer PBM GPO Wholesaler Health Plan/ Payer Pharmacy (Retail) Hospital (Acute care)/Outpatient/MD Patient (Beneficiary) Flow of Product AMCP Guide to Pharmaceutical Payment Methods, 2013 Update GPO = group purchasing organization; PBM = pharmacy benefit manager Flow of Payment

What’s Most Important? It depends… Inpatient • Acquisition price • Distribution channel • Market share incentive programs Outpatient infusion • Acquisition price • Reimbursement • Patient assistance programs Retail/Pharmacy Benefit Management • Acquisition price • Manufacturer rebates • Patient assistance programs AMCP Guide to Pharmaceutical Payment Methods, 2013 Update 24 Vizient Presentation │ January 2019│ Confidential Information

What is the value of a pharmaceutical? Acquisition cost Difference between cost and reimbursement Impact on total cost of care Prevention of disease progression Cost of availability (additional expense due to shortage) Cost exposure to patient

Biobetters and Beyond Existing agent Modification Neulasta (pegfilgrastim) Pegfilgrastim auto injector (Neulasta® On. Pro®) Rituxan (rituximab) Rituximab subcutaneous intravenous injection Obinutuzumab Herceptin (trastuzumab) Trastuzumab 150 mg Pertuzumab Ado-trastuzumab emtansine Remicade (infliximab) Guselkumab (IL-23 inhibitor for plaque psoriasis) Humira (adalimumab) ABT-122 (bispecific antibody for TNF and IL-17) ABT-494 (Janus kinase-1 inhibitor) ALX-0061 (anti-interleukin-6 receptor) m. Ab 26

Critical Next Steps • Remain vigilant for any and all news about biosimilars as the framework will continue to change – Regulatory actions § Approval decisions § Complete response letters – Legal actions, patent settlements – Reimbursement changes – Practice perspectives • Educate, educate! – It’s not the regulations, it’s the lack of understanding of the regulations • Think both short and long term when assessing value • Align with your business and financial colleagues 27 Vizient Presentation │ January 2019 │ Confidential Information