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

OncologyLive, Vol. 20/No. 6, Volume 20, Issue 6

When the FDA approved its first biosimilar drug in 2015—filgrastim-sndz, 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. Four years later, those benefits haven’t been fully realized,

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.

Opposition to Biosimilars

“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.”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

Gottlieb in July announced that the FDA had created a Biosimilars Action Plan as part of its mandate to encourage innovation and spur price-lowering competition in the drug market. The report indicated that generic drugs, facilitated by the Hatch-Waxman Act of 1984, for instance, now represent 90% of all prescriptions in the United States and generated $265 billion in savings in 2017 alone.12 It was only recently that the FDA launched a statutory pathway to approve follow-on versions of biological products, which amount to 40% of all prescription drug spending and 70% of the growth in drug spending from 2010 to 2015.

In tandem with the action plan announcement, Gottlieb was “worried that the market for these products still isn’t established,” he explained. “The ability for these products to penetrate clinical practice and gain acceptance is still not firm. That doesn’t mean that the future doesn’t hold a lot of promise for biosimilars. It just means that the future is uncertain.”13

Biosimilars are one way to address the increasing cost of prescription medicine. In November 2018, Pfizer began offering the anemia treatment drug epoetin alfa-epbx (Retacrit), a biosimilar to epoetin alfa (Epogen/Procrit; Amgen), at the wholesale acquisition price of $11.03 per 1000 U/mL. That’s 57% lower than Procrit ($25.72 per 1000 U/mL) and 33% lower than Epogen ($16.58 per 1000 U/ mL). In July 2018, Pfizer received FDA approval for neutropenia biosimilar filgrastim-aafi (Nivestym), the company’s second oncology supportive care biosimilar.14 Pfizer also has 4 other drug candidates in mid-to late-stage development for the treatment of cancer or as supportive care.

The steep discount connected with the launch of epoetin alfa-epbx helps fulfill expectations and hopes that the entry of biosimilars in the US market will challenge current pricing levels and improve access to medications, although there are no guarantees that prices even for biosimilars will not be scaled up along with the general march of drug cost inflation. “By introducing [epoetin alfa-epbx ] in the US market at a significant discount to its reference products, Pfizer is offering immediate savings to the healthcare system in hopes that patients and their physicians will have access to additional high-quality treatment options,” said Thomas Biegi, director of Global Media Relations at Pfizer, adding that the company couldn’t predict future pricing for epoetin alfa-epbx or other new biosimilars. “Each molecule has specific drivers that determine market price, including number of competitive entrants, so we expect pricing to naturally evolve differently for each biosimilar.”

Studies show that biosimilar competition has driven down overall prices in Europe. For example, epoetin biosimilars have contributed to price declines per treatment day averaging 31% across a wide selection of EU countries, according to a recent report.15 However, epoetin sales in the EU have been adversely affected by a warning that for patients with cancer, the preferred method of correcting anemia should be blood transfusion. There are other examples of the success of biosimilars abroad. In the United Kingdom, use of granulocyte colony-stimulating factor biosimilars eventually surpassed the originator drug in market share.16

Promotional Effort Needed

But that success didn’t happen overnight. Similar to how the FDA is working to encourage biosimilar adoption, the EMA in essence put its thumb on the scale when, in 2009, it updated clinical guidelines to encourage the use of biosimilar versions of filgrastim.17 That led to a significant increase in use, with a larger number of patients selecting the lower-cost drugs in earlier stages of their therapy. The EMA continues work to promote biosimilars: In September 2018, EMA and the European Commission published an animated video available in 8 languages for patients that explains what biosimilars are and how the EMA works to ensure they are as safe and effective as their reference drugs. At the same time, it released a guide to biosimilars for healthcare professionals in 7 languages after previously publishing it just in English.18Similar efforts would make a difference in the United States, too, said Kashyap Patel, MD, a practicing medical oncologist at Carolina Blood and Cancer Care in South Carolina and vice president of the Community Oncology, Alliance (COA). Patel is leading COA’s new biosimilars committee, an initiative aimed at providing high quality, accessible, and affordable cancer care.

“One reason we decided to create this committee is to identify the barriers facing biosimilars,” Patel said. “Not very many physicians are familiar with what they are or what the FDA process is. We feel that COA has the resources, plans, and, perhaps, obligations to work with the different stakeholders to reduce hurdles and to help facilities understand how biosimilars can reduce overall cost without affecting outcomes.”

According to Biegi of Pfizer, the company maintains that “uptake and utilization of biosimilars in the United States will be dependent upon multiple factors, including trust on the part of physicians and patients that the biosimilar will perform as well as the reference product.”

“Uptake of biosimilars typically begins in new patients, and as experience builds, existing patients are considered,” Biegi said. “Pfizer’s position is that all switching decisions regarding biosimilars should be made by the treating physician, on an individual patient basis, supported by scientific evidence, and with full patient awareness. It’s crucial that we continue to educate physicians and patients to create confidence and—to be honest—[and to correct] wrong information that is spread, causing fear and doubt of biosimilars among patient and provider groups.”

That’s a sentiment echoed by Molly Billstein Leber, PharmD, manager of medication policy and formulary management at Yale New Haven System in Connecticut. She adds that “solid basic and clinical science will serve as the backbone of biosimilar acceptance.”16 Billstein Leber has noted that lawsuits filed by originator companies have kept would-be biosimilars locked up in the starting gate. A recent lawsuit filed against Johnson & Johnson and Janssen by Walgreens and Kroger alleges that the biopharmaceutical companies engaged in anticompetitive practices to stop payers from covering biosimilars of infliximab.19

However, Billstein Leber acknowledges that based on the slow uptake of generics, it’s understandable that biosimilars in the United States are still sitting on the launchpad despite their moonshot potential in terms of savings and improved access for patients. “I am not surprised by the current biosimilar situation and overall adoption rates, especially when you look at our previous experiences with generic medications. It took 30 years after the implementation of the Drug Price Competition and Patent Term Restoration Act of 1984 for 89% of prescriptions now to be filled with generic medications,” she said. “Even today, many provider MDs still prefer using the branded/originator product for therapies with a narrow therapeutic range. This acceptance took a significant amount of work and was driven by the need to mitigate prescription drug expenses.”

Education, Billstein Leber concluded in her research, is “the key driver of biosimilar acceptance.” She cites the results derived from a 2016 survey of more than 1200 US physicians across specialties who are high subscribers of biologics.20 Among the most striking findings: 20.5% of responders incorrectly said a pharmacist could substitute a biosimilar without prescriber permission, 43.8% of physicians were not aware that biosimilars must be comparable in safety and efficacy to the originator biologic, 35.9% believed that biosimilars were less safe than the originator biologic, and 38.9% were interested in learning more about the FDA approval process for biosimilars.

Similarly, patients also lack information about biosimilars, Billstein Leber said. She believes an agency on the federal level should be responsible for baseline education. The FDA, individual doctors and practices, and medical associations also need to promote it. There is a noticeable lack of educational materials available, and Billstein Leber thinks that COA’s new committee could fill that gap. Education will lead to more biosimilar usage and more savings, she said. “The more often we see [biosimilars], the more comfortable everyone will be. We all need to share our successes and what barriers we have overcome in our journey for biosimilar adoption.”

References

  1. Sullivan T. FDA approves Sandoz’s Zarxio, the first biosimilar approved in the U.S. Policy & Medicine. Updated May 5, 2018. policymed.com/2015/03/fda-approves-sandozs-zarxio-the-first-biosimilar-approved-in-the-us.html. Accessed February 25, 2019.
  2. Sullivan T. A tough road: cost to develop one new drug is $2.6 billion; approval rate for drugs entering clinical development is less than 12%. Policy & Medicine. Updated May 6, 2018. policymed.com/2014/12/a-tough-road-cost-to-develop-one-new-drug-is-26-billion-approval-rate-for-drugs-entering-clinical-de.html. Accessed February 25, 2019.
  3. Blackstone EA, Fuhr JP. The economics of biosimilars. Am Health Drug Benefits. 2013;6(8):469-478. ncbi.nlm.nih.gov/pmc/articles/PMC4031732/.
  4. Mulcahy AW, Predmore Z, Mattke S. The cost savings potential of biosimilar drugs in the United States. Rand Corporation website. rand.org/content/dam/rand/pubs/perspectives/PE100/PE127/RAND_PE127.pdf. Published 2014. Accessed February 25, 2019.
  5. Mulcahy AW, Hlavka JP, Case SR. Biosimilar cost savings in the United States. Rand Health Q. 2018;7(4):3. ncbi.nlm.nih.gov/pmc/articles/PMC6075809/. Published March 30, 2018. Accessed February 25, 2019.
  6. Miller S. The $250 billion potential of biosimilars. Express Scripts website. lab.express-scripts.com/lab/insights/industry-updates/the-$250-billion-potential-of-biosimilars. Published April 23, 2013. Accessed February 24, 2019.
  7. Biosimilars approved in Europe. GaBI online website. gabionline.net/Biosimilars/General/Biosimilars-approved-in-Europe. Updated December 14, 2018. Accessed February 25, 2019.
  8. Biosimilar market in Europe: industry trends, share, size, growth, opportunity and forecast 2019-2024. IMARC website. imarcgroup.com/europe-biosimilar-market. Published February 2019. Accessed February 25, 2019.
  9. Biosimilars development moving to Asia. GaBI online website. gabionline.net/Reports/Biosimilars-development-moving-to-Asia. Published June 29, 2018. Accessed February 25, 2019.
  10. Biosimilar product information. FDA website. www.fda.gov/drugs/developmentapprovalprocess/howdrugsaredevelopedandapproved/approvalapplications/therapeuticbiologicapplications/biosimilars/ucm580432.htm. Updated January 18, 2019. Accessed February 25, 2019.
  11. Rowland C. ‘Marketers are having a field day’: patients stuck in corporate fight against generic drugs. Washington Post. January 9, 2019. washingtonpost.com/business/economy/drugmakers-alleged-scare-tactics-may-hold-back-competition/2019/01/09/612ac994-046d-11e9-9122-82e98f91ee6f_story.html?noredirect=on&utm_term=.3419a44cd2f2. Accessed February 22, 2019.
  12. Biosimilars action plan: balancing innovation and competition. FDA website. www.fda.gov/downloads/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApproved/ApprovalApplications/TherapeuticBiologicApplications/Biosimilars/UCM613761.pdf. Published July 2018. Accessed February 25, 2019.
  13. Cultivating a vibrant U.S. market for biosimilars: a conversation with FDA’s Scott Gottlieb. Brookings website. brookings.edu/events/u-s-market-for-biosimilars-fda-scott-gottlieb/. Published July 18, 2018. Accessed February 25, 2019.
  14. U.S. FDA approves Pfizer’s biosimilar Nivestym (filgrastim-aafi) [press release]. New York, NY: Pfizer Inc; July 20, 2018. pfizer.com/news/press-release/press-release-detail/u_s_fda_approves_pfizer_s_biosimilar_nivestym_filgrastim_aafi-0. Accessed February 25, 2019.
  15. IQVIA. The impact of biosimilar competition in Europe. google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=2ahUKEwi_jNHLqNfgAhUrmeAKHZykCCEQFjAAegQICBAC&url=https%3A%2F%2Fec.europa.eu%2Fdocsroom%2Fdocuments%2F31642%2Fattachments%2F1%2Ftranslations%2Fen%2Frenditions%2Fnative&usg=AOvVaw29beGo7y5l0rDapUeBqsuL. Published September 2018. Accessed February 25, 2019.
  16. Billstein Leber M. Optimizing use and addressing challenges to uptake of biosimilars. Am J Manag Care. 2018;24:-S0. ajmc.com/journals/supplement/2018/managing-costs-advancements-biosimilars/optimizing-use-and-addressing-challenges-to-uptake-of-biosimilars. Published November 19, 2019. Accessed February 25, 2019.
  17. Patel KB, Arantes Jr LH, Tang WY, Fung S. The role of biosimilars in value-based oncology care. 2018;2018(10):4591-4602. doi: 10.2147/CMAR.S164201.
  18. Improving understanding of biosimilars in the EU [press release]. Canary Warf, London, UK: European Medicines Agency; September 13, 2018. ema.europa.eu/en/news/improving-understanding-biosimilars-eu. Accessed February 25, 2019.
  19. DiGrande S. Walgreen, Kroger file antitrust suit against J&J, Janssen over Remicade. The Center for Biosimilars website. centerforbiosimilars.com/news/walgreens-kroger-file-antitrust-suit-against-jj-janssen-over-remicade. Published June 11, 2018. Accessed September 6, 2018.
  20. Cohen H, Beydoun D, Chien D, et al. Awareness, knowledge, and perceptions of biosimilars among specialty physicians. Adv Ther. 2017;33(12):2160-2172. doi: 10.1007/s12325-016-0431-5.