The Legal and Regulatory Year in ReviewDecember 24, 2020
Developments specific to biosimilars—a new regulatory framework for insulins, incremental market gains, and “patent dance” clarifications—were overshadowed this year by an existential threat to the law governing biosimilar approvals.
Will the BPCIA Survive 2021?
The most significant question facing biosimilar developers this year is whether the Biologics Price Competition and Innovation Act (BPCIA), which provides regulatory approval pathways for biosimilars in the United States, will survive 2021. The BPCIA—Title VII of the Affordable Care Act (ACA)—is caught in the legal crossfire surrounding the latest constitutional challenge to the ACA.
Although the BPCIA has bipartisan support, the ACA’s individual mandate requiring all individuals to maintain health coverage or pay a penalty has been the subject of numerous court challenges. The Supreme Court previously upheld the mandate’s constitutionality (by a 5-4 margin) as a valid exercise of Congress’ taxing power. After Congress reduced the penalty to $0 for failure to comply with the individual mandate, various states contended that the ACA is unconstitutional because the individual mandate does not generate any revenue and thus can no longer be classified as a tax.1 On March 3, 2020, the Supreme Court granted certiorari to decide this question and whether the individual mandate is severable from the remainder of the ACA, which would allow the remainder of the ACA to remain in place even if the individual mandate is found unconstitutional. The latter question is particularly important to biosimilar developers because the district court that originally decided the case concluded that the individual mandate is inseverable from the rest of the ACA. If the Supreme Court affirms this decision, the BPCIA would fall with the rest of the ACA.
Although the Supreme Court has yet to decide the constitutionality challenge at issue in California v Texas, biosimilar developers have reasons to be optimistic. At the November 10, 2020, oral argument, the justices seemed reluctant to strike down the ACA in its entirety even if the individual mandate is unconstitutional. They described Congress’ decision to reduce the penalty to $0 but not repeal the law as “compelling evidence” that Congress wanted to preserve other provisions of the ACA, such as the protections for individuals with preexisting conditions. Chief Justice Roberts and Justice Kavanaugh also appeared skeptical of the argument that the ACA’s legislative findings section constituted an inseverability clause. The tenor of the oral argument suggests that the entire ACA will not be held unconstitutional even if the individual mandate is struck down, although it’s always dangerous to make predictions based on the oral arguments. A decision is expected in 2021.
A Changed Regulatory Scheme for Generic Insulin
On March 23, 2020, over 90 biological products previously governed by the Hatch-Waxman Act, including insulin and human growth…