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Biosimilars Fall Short of Savings Expectations

June 16, 2017

When the RAND Corporation predicted that the introduction of biosimilars in the United States could generate $44.2 billion in savings between 2014 and 2024, it factored in past experience with generic small-molecule drugs in the United States and biosimilars in the European Union. However, biosimilar savings in this country are falling below such expectations, according to a recent viewpoint column published online in JAMA Oncology.

Differences between generic and biosimilar manufacturers, as well as between the United States and European Union, are playing a role.  

“The European Union countries have experienced greater savings from the development and marketing of biosimilars than the United States,” wrote contributors Y Tony Yang, ScD, LLM, MPH of George Mason University, and Brian Chen, JD, PhD, and Charles L. Bennett, MD, PhD, MPP, both of the University of South Carolina (doi:10.1001/jamaoncol.2017.1530).

“This is due to factors including longer experience with biosimilars (first regulatory authorization occurred in 2006 in the European Union vs 2012 in the United States), more regulatory approved biosimilars (26 in the European Union vs 4 in the United States, with the first FDA approval in 2015), more marketed biosimilars (26 in the European Union vs 1 in the United States), and different regulatory, litigation, and pricing environments.”

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Barriers to US cost savings pointed out in the column include:

  • a 12-year period of market exclusivity that begins with the biologic’s marketing approval, per the Biologics Price Competition and Innovation Act (BPCIA) of 2009;
  • a patent resolution process under the BPCIA that has resulted in numerous lawsuits between the makers of biosimilars and branded biologics, which have delayed biosimilar entrance to the US market;
  • an inability of pharmacists to substitute biosimilars for branded biologics without specific direction from a physician while US Food and Drug Administration Draft Guidance on Interchangeability remains unfinalized; and
  • branded biologic makers, rather than traditional generic manufacturers or new market entrants, producing biosimilars (one branded biologic maker is offering its biosimilar infliximab at a 15% discount vs the 45% discount for infliximab in the European Union).

“Unfortunately, the United States has thus far not experienced the same level of biosimilar acceptance and consequently savings as the European Union, which regularly sees discounts as large as 40%,” the experts observe. “However, several policy initiatives could help shift the trajectory and bend the cost curve.”

Such initiatives include finalized interchangeability guidance, approval of multiple biosimilars in the same class to generate competition, adoption of patent resolution procedures similar to those in the European Union, and a shortening of time between a patent’s granting and exclusivity expiration, the experts said.

Jolynn Tumolo

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