New Brazilian biosimilars pricing rules

New pricing guidelines for biosimilars issued by the Brazilian regulatory authorities without an opportunity for public comments reachesthe market with con icting statements.IntroductionOn August 11, 2016, the Brazilian Pharmaceutical Market Regulation Chamber (CMED) issued Notice #9/2016, which established the pricing criteria for biological products approved by the Brazilian Food and Drug Administration (BRFDA) through abbreviated pathways.A er the BRFDA’s approval, a company is to submit a price-cap request for its product to the CMED and the latter will set the price-cap according to criteria as arranged in six categories established in CMED Rule #2/2004. Prior to Notice #9/2016, the CMED would price the aforementioned biologics by following the criteria in category IV. It was designed mainly to branded copies of small-molecule drugs.As stated in Notice #9/2016, it is the CMED’s current understanding that the prior selected categories do not apply to the biological products approved through such abbreviated pathways. Therefore, using the criteria set out in the categories to establish the price-cap for these products is a wrongful act. From now on, as authorized by article 20 of Rule #2/2004 for exceptional situations, the CMED will set the price of biological products approved through abbreviated pathways by taking into consideration the criteria set out specifically for those, as listed in item 3 of Notice #9/2016.Notice #9/2016 lacks consistency with the BRFDA’s rules on biological productsThe CMED issued Notice #9/2016 but failed to carry out a prior public consultation. On that account, the general public was not given the opportunity to submit their views and recommendations. The wording of Notice #9/2016, for instance, does lack consistency with the definitions in the BRFDA Rule #55/2010, which sets the administration’s guideline for the submission of a marketing application for biological products.According to item 1.1 of Notice #9/2016, the pricing criteria would be applicable to “non-innovative biological products”, which, as per Notice #9/2016, are the biological products containing a “similar molecule” to another biological product already marketed in Brazil. However, the term “similar molecule” is not used in the BRFDA Rule #55/2010. In addition, Notice #9/2016 does not provide a definition for such term and arises uncertainty in respect of its meaning. Especially because pursuant to Rule #55/2010, a follow-on biological product can seek marketing approval in Brazil through two di erent abbreviated pathways: the comparative pathway, whereby the product must prove highly similar to a referenced biological product (informally referred to as biosimilar1, once approved), or the individual development pathway, whereby the applicant does not provide any comparative data to a referenced biological product.The meaning of the phrase “similar molecule” remains unclear and no clarification has been provided as to whether it refers only to the follow-on biologicals approved through the comparative pathway (“biosimilars”), or through both.Summary of the new pricing criteriaThe new pricing criteria is as follows:i) For products with evidence of therapy improvement2, the price-cap to wholesalers (Factory Price) cannot be higher than the lowest Factory Price of the product in the countries listed in Article 4, ¶2, item VII of Rule #2/20043;ii) For a new product in the company’s portfolio with no evidence of therapy improvement, the Factory Price will be set in view of the average treatment cost for drugs with “similar molecule”, balanced by the company’s revenues, and limited by the lowest Factory Price of the product in the countries listed in Article 4, ¶2, item VII of Rule #2/2004;iii) For products with no evidence of therapy improvement and with “similar molecule” to other products already marketed by the company, the Factory Price will be set in view of the average treatment cost of those products marketed by the company;iv) For the new commercial packing of a product already marketed by the company under the same trade name, the Factory Price will be set in view of the average treatment cost of those products.The CMED will use the aforementioned criteria to review the already filed, however not yet decided, price-cap requestsThe original Portuguese version of Notice #9/2016 issued by the Brazilian Pharmaceutical Market Regulation Chamber (CMED) can be downloaded here. The English translation of Notice #9/2016 can be downloaded here.For more information, please contact lifesciences@lickslegal.com1 A “Biosimilar” is not an o icial term set out in Brazilian regulations, but it is commonly used to refer to the follow-on biological products approved through the comparative pathway.2 According to the definition set forth by Notice #9/2016, therapy improvement means when a drug, in comparison with other drugs with the same therapeutic indication, has (i) more e icacy; or (ii) equal e icacy, but with less side e ects; or (iii) the same e icacy, but the full treatment entails a lower cost.3 Australia, Canada, Spain, USA, France, Greek, Italy, New Zealand, Portugal and the product’s original country.