Up for the Challenge: The Case to Spread and Scale Biosimilars Across the U.S.

November 9, 2017 Sonia Oskouei

Across the board, drug costs have risen to the highest level in a decade, with specialty drugs for inflammatory conditions being the most expensive drug class in 2016. Despite over 15 medication options to treat inflammatory conditions, 70 percent of the market share was captured by only two biologic medications. The price of biologics also account for significant spending in Medicare — in fact, the eight most expensive Medicare Part B drugs in 2010 were all biologics – accounting for $8.3 billion, or nearly 43 percent of all Part B drug spending.

Biosimilars—or biologic products that are highly similar to brand name biologics—hold great potential for helping to reduce overall healthcare costs and increase patient access to critical therapies. In Europe, where biosimilars have been commercially available for over a decade, these products are typically priced up to 30 percent below the reference biologic – savings that could be replicated here as brand biologic drugs come off patent. A recent estimate highlighted a potential drug cost savings of $54 billion in the next decade with biosimilars.

However, biosimilars haven’t taken off in the U.S. like they have in Europe. In part, our country got a late start. The first biosimilar approved in the U.S. was in 2015, whereas Europe has been using them for years. Delays in market release have been due to a variety of regulatory reasons, and for FDA-approved biosimilars that have yet to enter the market, patent litigation is the main culprit. Today, there are seven FDA-approved biosimilars in the U.S., and only three of those have been commercialized within the market. Additionally, because the U.S. remains relatively inexperienced with these products, acceptance by a variety of stakeholders has been slow.

In order for these interventions to take off, the healthcare system as a whole needs to demonstrate demand and clear pathways for product uptake in order to make it worthwhile for manufacturers to make the investments in biosimilars and pursue the difficult path to approval. Generic drugs overall are a thriving industry, largely driven by state laws that encourage automatic substitution of generic drugs for the branded alternative. But in the case of biosimilars, automatic or pharmacist-level substitution relies on FDA interchangeability designation in addition to state substitution laws. The FDA has yet to establish final guidance on interchangeability, further creating challenges to achieve the designation. As it stands today, the draft guidance is very data-demanding, with manufacturers reporting having to jump through extra hoops to prove this status – all of which runs counter to the goal of providing incentives to enter the market.

There also needs to be a mind-shift in the way biosimilars are evaluated by providers, payers, and other key stakeholders. If we want these interventions to take off, payer policies must support biosimilar treatment options (through tiered benefit designs, for example) to allow utilization of the products. Healthcare providers must also thoroughly understand biosimilars and their regulatory approval pathways to develop a sense of confidence in the products.

Dr. Scott Gottlieb of the FDA alluded to the fact that the evolution of biosimilars in the U.S. is “similar to 30 years ago with generic drugs, where adoption is slow; there is reluctance on the part of providers to switch over, certainly to switch patients off of a therapy that they’re on, onto a biosimilar, or even to embrace a biosimilar, especially if you’re thinking about curative therapy.” In fact, the FDA recently launched an educational campaign on biosimilars for healthcare providers, highlighting the rigorous FDA-approval process, as well as the substantial savings through increased competition and access.

Even though there’s much work to be done in terms of spreading and scaling the use of biosimilars, we expect these interventions to gain momentum in the U.S. as manufacturers, providers and payers learn to navigate the complex healthcare environment.

As more providers move into value-based care arrangements that increasingly reward cost containment with payment penalties, our expectation is that there will be greater demand for biosimilars from the provider community. And Dr. Gottlieb’s comments signal at least early signs that the FDA may embrace more focused efforts in approving and enabling the uptake of these medications. Combined, these dual forces may be just the push we need in order to get biosimilar research, development, approval and prescribing to where it needs to be in order to realize savings.

What to learn more about biosimilars? Download our eBook.

Author information

Sonia Oskouei

Sonia Oskouei

Sonia is the Director of Pharmacy Program Development for biosimilars at Premier Inc., where she is responsible for leading the national biosimilar strategy on behalf of health system stakeholders. When she is not working, she enjoys spending time with family and playing soccer.


The post Up for the Challenge: The Case to Spread and Scale Biosimilars Across the U.S. appeared first on Action For Better Healthcare.

Previous Article
Bundled Payment Models Take the Limelight in Value-Based Care
Bundled Payment Models Take the Limelight in Value-Based Care

Bundled payment models, part of the movement away from fee-for-service and toward value-based payment, are ...

Next Article
Bringing Clinicians and Health Systems Together to Transform Cardiovascular Care
Bringing Clinicians and Health Systems Together to Transform Cardiovascular Care

Healthcare is in flux. Hospitals, health systems and clinical practices are rethinking care delivery amidst...


Like what you see? Get fresh content by subscribing to our blog.

Thank you! We post 1-2 times per week.
Error - something went wrong!