AbbVie 2012 Annual Report Download - page 15

Furthermore, the new law provides that only a biosimilar product that is deemed to be
‘‘interchangeable’’ may be substituted for the original biologic product without the intervention of the
health care provider who prescribed the original biologic product. To prove that a biosimilar product is
interchangeable, the applicant must demonstrate that the product can be expected to produce the same
clinical results as the original biologic product in any given patient, and if the product is administered
more than once in a patient, that safety risks and potential for diminished efficacy of alternating or
switching between the use of the interchangeable biosimilar biologic product and the original biologic
product is no greater than the risk of using the original biologic product without switching. The new
law is only beginning to be interpreted and implemented by the FDA. As a result, its ultimate impact,
implementation, and meaning will likely be subject to substantial uncertainty for years to come.
In the European Union, while a pathway for the approval of biosimilars has existed since 2005, the
products that have come to market to date have had a mixed impact on the market share of incumbent
products, with significant variation by product.
Other Competitive Products. Although a number of competitive biologic branded products have
been approved since HUMIRA was first introduced in 2003, most have gained only a modest share of
the worldwide market. In addition, the first JAK inhibitor, part of a new class of orally administered
class of products, was recently approved for use in rheumatoid arthritis in the U.S. and is under
regulatory review in Europe. AbbVie will continue to face competitive pressure from these biologics
and orally administered products.
Regulation—Discovery and Clinical Development
United States. Securing approval to market a new pharmaceutical product in the United States
requires substantial effort and financial resources and takes several years to complete. The applicant
must complete preclinical tests, and obtain FDA approval before commencing clinical trials. Clinical
trials are intended to establish the safety and efficacy of the pharmaceutical product and typically are
conducted in three sequential phases, although the phases may overlap or be combined. If the required
clinical testing is successful, the results are submitted to the FDA in the form of an NDA or Biologic
Listing Application (BLA) requesting approval to market the product for one or more indications. The
FDA reviews an NDA or BLA to determine whether a product is safe and effective for its intended use
and whether its manufacturing is compliant with current Good Manufacturing Practices (cGMP).
Even if an NDA or a BLA receives approval, the applicant must comply with post-approval
requirements. For example, holders of an approval must report adverse reactions, provide updated
safety and efficacy information, and comply with requirements concerning advertising and promotional
labeling. Also, quality control and manufacturing procedures must continue to conform to cGMP after
approval. The FDA periodically inspects manufacturing facilities to assess compliance with cGMP,
which imposes extensive procedural, substantive, and record keeping requirements. In addition, as a
condition of approval, the FDA may require post-marketing testing and surveillance to further assess
and monitor the product’s safety or efficacy after commercialization. Any post-approval regulatory
obligations, and the cost of complying with such obligations, could expand in the future.
Outside the United States. AbbVie is subject to similar regulations outside the United States.
AbbVie must obtain approval of a clinical trial application or product from the applicable regulatory
authorities before it can commence clinical trials or marketing of the product. The approval
requirements and process vary, and the time required to obtain approval may be longer or shorter than
that required for FDA approval. For example, AbbVie may submit marketing authorizations in the
European Union under either a centralized or decentralized procedure. The centralized procedure is
mandatory for the approval of biotechnology products and many pharmaceutical products and provides
for a single marketing authorization that is valid for all European Union member states. Under the
centralized procedure, a single marketing authorization application is submitted to the European
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