Biosimilars: Progress Today, Billions in Savings Tomorrow

Jul 5, 2017
A look at recent updates and the potential cost savings of biosimilars.

Rochelle Article

Advocates for biosimilars – lower-cost clinical equivalents to some of the most expensive prescription drugs – are cheered by recent regulatory and court actions. But we know there is more work to be done in creating a vibrant, competitive market that will save patients and payers billions of dollars.

Biosimilars are similar to generic drugs, providing alternatives to original biologic therapies which typically are injected and treat many of the most complex medical conditions, such as cancer, rare diseases and rheumatoid arthritis. They do not have clinically meaningful distinctions in safety, purity and potency from the original biologics.

Because they are manufactured using cells in the biologic systems instead of from chemicals as in traditional pills, some pharma companies argue that biosimilars are inherently different from the originator drugs they would challenge. And that has led to a host of regulatory and legal issues – delaying for years a clear path to market in the United States (versus the European Union and other countries that have long used biosimilars to create savings).

The past few months have brought progress:

  • Zarxio®, a biosimilar that helps prevent infection during chemotherapy, came to market in September 2015 and now has captured nearly one-fourth of the market at a price that is 15% lower than the originator drug, Neupogen®.
  • Inflectra® launched in November at a 15% discount to challenge Remicade®, and another biosimilar, RenflexisTM, should launch this fall – together taking an expected 10-15% of the market this year. These medications treat rheumatoid arthritis and other inflammatory autoimmune conditions, which comprise the most expensive therapy class for payers over the past two years, according to the Express Scripts Drug Trend Report.
  • A Supreme Court ruling should mean that once a biosimilar is approved, the manufacturer can more quickly get it in the hands of patients and physicians. The ruling in the case, Sandoz Inc. v. Amgen Inc., allows manufacturers to begin marketing the medication without waiting for the Food and Drug Administration to rule on which indications it is approved for – allowing for a faster launch once that decision is made.
  • The R&D pipeline for biosimilar medications is growing, with 16 companies currently targeting 12 originator drugs with a combined market value of $38.5 billion.

The potential cost savings is significant. Express Scripts research identified a $250 billion savings opportunity over the next decade if a group of 11 biosimilars is approved – and more than $22 billion of that from challenges to Neupogen and Remicade alone. A share of the savings would be passed along to patients in the form of lower co-pays and premiums. And paying less for biologics that have been on the market for years would enable benefit sponsors to afford new and expensive treatments that greatly improve and save members’ lives.

However, there is more work to be done.

Pharma companies that sell originator biologic medications use a variety of strategies to limit competition, including legal challenges, patient assistance programs that circumvent formulary management, and public campaigns that call into doubt the efficacy and safety of biosimilars.

On the policy front, state governments are introducing bills that would hinder competition. And there is ongoing debate on the number of years, ranging from five to 14, for which an originator pharma company should have patent exclusivity on biologic drugs.

As the long road to true biosimilar competition stretches on, Express Scripts is creating innovative solutions that lay the groundwork for maximum savings when an opportunity becomes reality. For example, the Inflammatory Conditions Care Value ProgramSM, anticipates biosimilar competition to blockbusters Enbrel® and Humira®.

Payers have the opportunity to advocate for a faster and more rational path to market for biosimilars. And they can position themselves today for greater savings tomorrow.

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