US Market Is Still Waiting for Biosimilars to Produce Meaningful Price Reductions

Natalie Pompilio
Published: Thursday, Mar 14, 2019
Gary H. Lyman, MD, MPH
Gary H. Lyman, MD, MPH
When the FDA approved its first biosimilar drug in 20151—filgrastim-sndz (Zarxio), for compromised white blood cell count—there was talk of the benefits of competition in the pharma industry; increased access to medications for patients; and, of course, the all-around savings. After all, the cost of developing and guiding a biosimilar through the approval process is a fraction of the cost of developing a reference biologic: in the range of $100 million to $250 million versus $2.6 billion for a new prescription medicine.2,3

Four years later, those benefits haven’t been fully realized, according to Gary Lyman, MD, MPH, senior lead of health care quality and policy at the Hutchinson Institute for Cancer Outcomes Research at Fred Hutchinson Cancer Research Center in Seattle, Washington. “There is some evidence of price reduction, but it’s too early to tell if biosimilars will fulfill expectations,” he said. “As people become more comfortable with biosimilars and we see multiple agents competing with originators, we hope we see meaningful price reductions. We’re not going to see 80%, like generics, but even 10% to 15% reductions, at the national level, would represent billions of dollars in potential savings.”

Biosimilars are complex molecule agents that bear almost identical resemblance to original biologics that have lost their patent exclusivity. Just 3 years out of the starting gate, biosimilars in the United States are too hazy a target for precise savings analysis. The Rand Corporation has been studying this emerging market since before Sandoz’s filgrastim-sndz became the first biosimilar challenger on the American scene. Rand estimated potential biosimilar savings of $44.2 billion over the 2014-2024 period (range, $13 billion-$66 billion), or 4% of total biologic spending.4 In a 2017 update, the estimate was just marginally higher, although adjusted downward for degree of market penetration: $54 billion (range, $24 billion-$150 billion) over the 10-year period ending in 2026, or about 3% of estimated total biologic spending.5 Other estimates put the potential 10-year savings as high as $250 billion.6

These estimates, in fact, are significantly more optimistic than what has been achieved in the European Union (EU), where biosimilars were first introduced in 2006 and those approved by the European Medicines Agency (EMA) numbered 54 by the start of 2019.7 A report by IMARC indicated sales of biosimilars in the EU reached just US$2.9 billion in 2018 and projected a total of US$11.7 billion by 2024.8 Biosimilars are taking hold in other regions of the globe, such as Korea, where a significant manufacturing industry dedicated to biosimilars has sprung up, and India, where more than 25 biosimilars have been approved for marketing.9

Observers cite multiple reasons for the slow uptake stateside: There are a limited number of biosimilars on the market—18 have been approved thus far, including oncologic agents and supportive medications (Figure).10 In addition, manufacturers of originator products, upon which biosimilars are based, have been accused of blocking the market entry of these competitor products and discouraging public acceptance of them. Further, some providers hesitate to change a patient’s treatment plan if costly reference biologic drugs are working, for fear the biosimilars won’t be as successful.

“I’m a practicing oncologist, and some of us have used [originator biologics] for 10, 15, 20 years, and we’ve gotten very comfortable with them,” Lyman said. Given the very nature of biologics— the complex manufacturing involved and the difficulty of preparing identical batches of drugs— it is doubtful that parallelism of quality between biosimilars and biologics can be maintained over the long haul, Lyman said: “I would argue that all biologics are prone to drift with changes in conditions, and studies have shown original biologics on the shelf today are not the same as they were 15 years ago. The originator drugs we’ve gotten really comfortable with are really biosimilars to the ones we started using years ago.”

Opposition to Biosimilars

Biologics have led to breakthroughs in oncology and other serious diseases, and they typically cost tens of thousands of dollars for a year of treatment, and with this amount of money at stake, manufacturers of original biologics are suspected of deliberately trying to thwart the introduction of lower-cost biologics, according to a news report earlier this year. Outgoing FDA Commissioner Scott Gottlieb, MD was quoted expressing concerns about “deliberate or unintentional efforts by branded companies to create confusion” about the safety and effectiveness of biosimilars, which the FDA examines for reliability and efficacy as part of marketing approval.11

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Online CME Activities
TitleExpiration DateCME Credits
Community Practice Connections™: Addressing Post-Transplant Obstacles: Current and Emerging Strategies to Evolve the Standard of Care for Patients With Graft-Versus-Host DiseaseMar 28, 20192.0
2017 Year in Review™: Clinical Impact of Immunotherapies in the Treatment of CancerMar 30, 20191.75
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