March 02, 2018
A recent perspective in The New England Journal of Medicine outlined the reasons why biosimilar uptake in the United States has been lackluster.
Richard G Frank, PhD, department of Health Care Policy at Harvard Medical School, explained that the promise of biosimilars was to significantly bring down the costs of biologic therapies by introducing competition in these drug spaces. He highlighted how passage of the Biologics Price Competition and Innovation Act (BPCIA) in 2010 was expected to usher in an era of cost-savings among specialty pharmacy payers.
However, Dr Frank explained, the reality has been less than exciting.
“Currently, there are only 7 biosimilar products on the US market competing with originator brands, as compared with 14 that were on the European market at a similar point in time after a pathway was created there,” he wrote.
He explained that a combination of factors have culminated to hinder widespread biosimilar approval and uptake among providers and patients. One of these factors is the complexity of biologic medications.
“Historically, most drugs have been small molecules,” Dr Frank said. “Physicians are used to generic versions of them and are comfortable prescribing them. By contrast, multiple surveys of physicians reveal that even those who routinely use biologic products do not have a clear understanding of biosimilar products.”
Another factor inhibiting biosimilar approval and uptake, according to Dr Frank, is confusing requirements for interchangeability designations.
“The FDA has not been clear about whether this requirement involves meeting an additional standard or producing more data,” he wrote. “Conducting extra clinical studies is a very expensive activity, so clarity on this point is important. The slow development of clear U.S. guidance on interchangeability means that there are no interchangeable products on the market — which limits price competition.”
He also identified pharmacy benefit management arrangements between payers and pharmaceutical companies as a factor hurting uptake. These deals allow payers to acquire reference biologics at a cheaper, rebated price—compared to their biosimilar products.
“Despite claims of encouraging competition, this approach fails to create an incentive that bolsters price competition,” Dr Frank explained. “It is at best neutral with respect to choice of product on the basis of price, since the payment for administering the drug is the same for the reference product and its biosimilar.”
Other factors identified by Dr Frank included secrecy behind the manufacturing of biologic drugs. He explained that no single factor is responsible for the disappointing results seen by the entrance of biosimilars to the US market, and stressed that all must be addressed in order for the health care system to see a significant cost-savings impact.
“Although a number of these factors may separately have modest effects, together they are additive and most likely contribute to the slow development of competition in the biologics market,” he concluded. “Spending on biologic drugs was estimated to be $105.5 billion in 2016, and growth in spending has been averaging 10% per year recently. Thus, competition creates the potential for considerable savings — but if the impediments continue, important savings will probably be left on the table.”
Read the full perspective, here.
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