Despite the passage of the Biologics Price Competition and Innovation Act of 2009, which provided a regulatory pathway for biosimilars, only 20 have been approved, and seven marketed, in the United States. The most recent was Kanjinti (trastuzumab-anns) for Herceptin (trastuzumab).
IQVIA expects biosimilars to lower overall spending on biologic medicines by $153 billion from 2019 to 2023 as a result of competition.
A study conducted by Avalere Health found that the availability of biosimilars could increase overall access to biologic medicines by an additional 1.2 million patients.
Slow Development, Launch of Biosimilars
“Developing and marketing biosimilars is an expensive proposition. It takes a significant investment in manufacturing expertise and a capacity to create these types of drugs,” says Steven Lucio, PharmD, vice president of pharmacy solutions for Vizient Inc.
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“In addition, the biosimilar approval process has taken some time for the FDA to build. Therefore, manufacturers have had to work on various aspects of development while FDA was making final decisions,” he says. “Now that the FDA and manufacturers have worked through 20 approvals, there is a greater level of awareness of what is required to be successful with this type of drug development.”
Kevin Nelson, a partner within the Generic and Biosimilar Pharmaceuticals Practice Group at Schiff Hardin in Chicago, attributes slow development in part to companies’ initial wariness of proceeding down the biosimilar pathway due to the amount of uncertainty associated with the process. He is optimistic, however, that application approvals are rising due to more guidance on the technical front, a better understanding of the considerations related to biosimilar litigation, and higher acceptance in the marketplace.
“The FDA does a good job with guidance; but, from a regulatory perspective, not many [biosimilars] have been approved or launched. The marketplace for biosimilars is not where it is expected to be by 2019,” says Juliana Reed, vice president of corporate affairs for Pfizer.
Targeting Misaligned Incentives
The Biosimilars Forum—an organization based in Washington, D.C.—has developed three proposals for promoting the use of biosimilars and for counteracting misaligned incentives and unfair reimbursement:
1.) Lower costs by eliminating a copayment for Medicare beneficiaries who choose a biosimilar.
The Forum estimates that would save patients $3.3 billion dollars in out-of-pocket costs over 10 years and save taxpayers $5.2 billion.
2.) Develop a physician-focused, shared savings program in which Medicare savings associated with prescribing a biosimilar is shared with providers.
Not only would that provide an incentive for providers but it could save as much as $3 billion in tax dollars over 10 years.
3.) Increase add-on payments for prescribers of biosimilars to incentivize their use by increasing the amount doctors in Part B are reimbursed for administering them.
The Forum estimates the United States could realize a savings of as much as $8.2 in health costs over the next decade.
Avalere has calculated that biosimilars could reach between 26% and 46% in market share if Medicare paid for beneficiaries’ out-of-pocket costs and could save billions by adding a payment bonus for providers for prescribing biosimilars.
Patent walls are one of the greatest barriers preventing biosimilars from entering the marketplace. Drug companies could create patent walls around their products by changing manufacturing processes, finding new indications for an approval, or by changing a drug’s dosage—all extending protection over a long period of time.
Jeffrey Hausfeld, MD, chairman of the board and chief medical officer for BioFactura in Frederic, Maryland, says that although the goal of a biosimilar is to produce a drug identical to its reference, interchangeability is considered bumping up against a patent if both products are exactly the same.
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