A Supreme Court chill across biosimilar ‘skinny’ labels could halt billions in Medicare savings

As generic drugmakers continue to petition the US Supreme Court to protect a longstanding precedent that allows them to carve out and market certain indications for a patented brand name drug — under what’s known as a “skinny” label — new research also raises questions about billions in savings lost from skinny biosimilar labels if courts leave this pathway in limbo.

A JAMA research letter published yesterday notes that of 21 biosimilars marketed before 2022, 13 (62%) were launched with a skinny label. Annual estimated savings from those skinny labels increased from $2 million in 2015 to $857 million in 2020 as more biologics ran into this biosimilar competition.

“Competition from skinny-label biosimilars was estimated to save Medicare $1.5 billion from 2015 to 2020,” the Harvard- and West Virginia University College of Law-based authors noted, adding that savings from the skinny-label biosimilar to AbbVie’s megablockbuster Humira will kick off next year and drive that number up much further.

Ameet Sarpatwari

For five of these eight biologics facing early competition, the first-to-market biosimilar had a skinny label, leading to a median of two and a half years of earlier competition through 2021, the authors noted.

“If the appellate court ruling is permitted to stand, both generic and biosimilar manufacturers would face increased risks of infringement claims for information in their labeling,” co-author Ameet Sarpatwari of Harvard’s Program On Regulation, Therapeutics, And Law told Endpoints News.

An accompanying editor’s note called on Congress to act on skinny labels, with the authors from JAMA and UCSF noting:

For both biosimilars and generic drugs, the use of skinny labels is an important strategy to increase the affordability and accessibility of medications. The legal uncertainties are likely to continue, as manufacturers pursue novel and complex strategies to protect the patents and regulatory exclusivities of brand-name drugs and biologics. The path forward is for Congress to enact additional legislation that reaffirms and strengthens the permissibility of skinny labeling.

Similar research on the generic side has shown significant savings potential too. In September, Teva fired back at GSK after the UK-based drugmaker sought to squash Teva’s attempt to get its “skinny” label case overturned by the Supreme Court.

therapeutics
biosimilars
biologics