Despite the savings and increased patient access biosimilars have brought to health care systems across Europe, the US has been surprisingly slow in their adoption. Chip Davis, President and CEO, Association for Accessible Medicines breaks down the systematic challenges that must be addressed in order for the US biosimilars market to realize its full potential.
Europe is far ahead of us. Approximately 50 biosimilars have been approved in the EU, in eight therapeutic classes. Europe approved its first biosimilar approval in 2006, with the US not seeing its first approval until 2015.
Judging from the ubiquity of TV commercials for Humira® on US television, you might think that half the country takes biologic medicines. If you live outside of the US, however, you may be surprised that fewer than 2 percent of Americans currently use them. Speciality medicines, which include biologics, will account for nearly two-thirds of prescription drug launches over the next five years globally, up from 61% in the past five years, lifting specialty share of spending to near 50% by 2023 in most developed markets. In the US, speciality medicines account for nearly 40 percent of total spending on prescription drugs and 70 percent of the growth in drug spending from 2010 to 2015.
Biologics are innovative, important life-saving medicines, but they are often very expensive. Some are priced at over $60,000 per year per patient, making them inaccessible to large segments of patients.
Fortunately, there is hope, and it lies in the savings and increased patient access potential of biosimilar medicines, competitive biologic alternatives to their brand counterparts.
Biosimilars aren’t simply “the generic of biologics.” Like their brand name counterparts, these drugs are vastly more complex. Because of this complexity, biosimilars are far more costly to develop; a biosimilar development program often requires an upfront investment of anywhere between $100 million and $300 million. Nevertheless, we have seen currently marketed biosimilars average a 40 percent list price discount from the brand biologic. Moreover, this market is still in its infancy, and as more biosimilars enter the market you can expect competition to increase patient access.
The availability of biosimilars in the U.S. could increase access to biologic medicines by 1.2 million patients over 10 years, with women, lower income and elderly individuals disproportionately benefitting from increased access to biologic medicines and lower out-of-pocket costs overall.
In order to realize this promise, policymakers, regulators and industry leaders must recognize and embrace this potential. The current administration has shown vision in this regard, thanks to the leadership of Health and Human Services Secretary Alex Azar II, FDA Commissioner Scott Gottlieb, MD, and CMS Administrator Seema Verma.
Released last summer, the FDA’s Biosimilars Action Plan outlines what it calls “a virtuous cycle of innovation and competition.” This plan is a milestone for our industry. In Dr Gottlieb’s words, “To make sure that the next generation of breakthroughs remains affordable, it requires vibrant competition from biosimilars.”
The fulfilment of the Biosimilars Action Plan would mean billions of dollars in savings for patients who now depend exclusively on expensive biologics and their ever-increasing prices. In addition to this bold FDA action, the Centers for Medicaid and Medicare Services (CMS) continues to be a leader in this space.
In its “call letter” outlining policies for Medicare Advantage and Medicare Part D prescription drug plans for 2020, CMS requests feedback on whether biosimilars should be treated as generics for the purposes of this policy, an incredible opportunity for patient access to these medicines. Unfortunately, a little-known practice of putting generics and biosimilars on brand formulary tiers is commonplace and costly for patients, and change is overdue.
Here’s how it works: plans place expensive brand drugs on low-cost tiers because brand manufacturers can offer plans high rebates for preferential formulary placement. At the same time, plans place lower priced affordable generic and biosimilar drugs on higher-cost tiers. As a result, patients are required to pay more for generics and biosimilars. This practice runs completely counter to the Administration’s Blueprint to Lower Drug Prices, particularly the defined strategies of lowering patient out-of-pocket costs and increasing competition. Recognizing this, the Administration is rightly asking for comments on tier placement and has a separate proposal to revisit the current rebate scheme.
AAM commends the Administration for its innovative efforts to address the high drug prices by supporting competition, and we will continue our efforts to identify and remove all barriers preventing patients from receiving generic and biosimilar medicines.
However, in order for the US biosimilars market to realize its full potential, we must address three systemic challenges:
1. FDA Approval
Simply put, Europe is far ahead of us. Approximately 50 biosimilars have been approved in the EU, in eight therapeutic classes. Europe approved its first biosimilar approval in 2006, with the US not seeing its first approval until 2015. There are currently 17 FDA-approved biosimilars; however, only seven of these have been able to launch, making additional FDA approvals an imperative. One action the FDA could take to facilitate development and approval is to allow the use of non-US reference product in the development of US biosimilars. The Biosimilars Action Plan stated that FDA is “exploring the potential for entering into new data- sharing agreements with foreign regulators to facilitate the increased use of non-US-licensed comparator products in certain studies to support a biosimilar application.” There is merit to this type of proposal because it can be implemented in a manner that is scientifically rigorous and will significantly reduce development costs in turn leading to increased patient access to more affordable alternatives to costly brand biologics.
To maximize savings potential, biosimilars must be able to compete on volume in a robust and open marketplace. Unfortunately, brand-name manufacturers increasingly take action to extend their government-granted monopolies even after a competing product is supposed to be available. Here are some examples of manoeuvres that have been deployed:
- Threatening to remove the significant rebates provided to payers, unless the competitive biosimilar is excluded from coverage
- “Stacked” (also known as “bundled”) rebates that involve the manufacturer of the brand product withdrawing rebates on a basket of products in the event that the contracted entity utilizes a biosimilar in place of its product.
The latter tactic is the subject of a lawsuit over Johnson & Johnson’s infliximab (Remicade), which involves denying patients access to Pfizer’s Inflectra. This bellwether case will have a major impact on whether biosimilars can and will be able to compete on a level playing field in the US market, as they currently do in Europe.
Biosimilars represent a paradigm shift in the pharmaceutical industry, and some parties are still playing catch-up. We need to include providers, pharmacists, patient groups, and health plans in the burgeoning dialogue about the possibilities and opportunities. Education efforts face a major roadblock in the form of misinformation campaigns promulgated by some biologic manufacturers and their surrogates seeking to sow seeds of doubt regarding the safety and efficacy of biosimilars. Pfizer highlighted these campaigns in a recent Citizen Petition submitted to the FDA. However, as stakeholders gain confidence in biosimilars we hope to witness increased uptake throughout the health care sector.
There also must be education around the true meaning of an “interchangeability” designation, as we have heard many times that stakeholders are “waiting” for interchangeable biosimilars to embrace utilizing these affordable medicines. To be clear, an FDA-approved biosimilar has no clinically meaningful differences from the reference biologic. The separate FDA designation of interchangeability is not material to the safety and efficacy profile of an approved biosimilar and has no bearing on the quality of the medicine. Many manufacturers will see no business reason to invest in the costly and time-consuming pursuit of this designation, nor should stakeholders wait to help patients reap savings from FDA-approved biosimilars.
Biosimilars are finally here in the United States, but we all have to collaborate to help them gain ground. Stakeholders have every incentive to find ways to address the approval, competition and education challenges faced by the biosimilars industry, but most important is the opportunity to improve the health of American patients.