Changes Needed for Biosimilars to Reach Their USD 54 Billion Potential By 2027

By Sheila Frame, VP, Head of Biopharmaceuticals, North America, Sandoz

A new RAND report estimates that biosimilars could reduce US spending on biologic drugs by $54 billion between 2017 and 2026.¹ The new projections are  based on assumptions derived from previously published studies, subject matter expertise and real-word evidence from the Sandoz biosimilar medicine Zarxio®, which is the first biosimilar to be FDA approved and marketed in the US through the Biosimilar Price Competition and Innovation Act (BPCIA), and the expected introduction of many more biosimilars into the marketplace during the decade referenced. However, the report notes a number of issues that will influence the impact biosimilars will have on increasing access and reducing costs. It is time for payers, policymakers, prescribers and patients to make some changes to support a competitive biosimilars marketplace.  Only that way can we reach a situation in the US similar to that in the EU, where we are now seeing consistently improved biosimilar uptake with each new launch – more than 10 years after Sandoz “kick-started” the new industry with the launch of biosimilar Omnitrope.

Let’s take a step back for a minute.

What are biosimilars?

Biologics are a cornerstone of modern medicine that have transformed the lives of millions of people with many disabling and life-threatening diseases including anemia, various forms of cancer, diabetes, rheumatoid arthritis and skin conditions such as psoriasis. Specialty medicines, which include biologics and other high-cost medications, make up only 1-2% of all prescriptions but account for 38 percent of US prescription drug spending in 2015.² Biosimilars are biological medicines that match the safety, efficacy and quality profile of biological reference products, and represent a potential opportunity to expand patient access and introduce competition that may impact the direct and indirect cost of these therapies for patients in need.

Biosimilars have been used in Europe for over a decade, but the market in the United States is still in its infancy with the first biosimilar introduced in 2015.

How do we fulfill biosimilars’ promise of increased access and cost savings in the US?

As the environment evolves, there are number of areas where work is needed to ensure patients, and the US healthcare system, reap the benefits of biosimilars. Let’s break down the required changes by stakeholder:

Payers – Insurance companies need to invest now to ensure a competitive marketplace and patient benefit. The RAND report states that, “insurers benefit from lower biologic prices across all delivery settings.” Over time, biosimilar medicine savings can trickle down to patients in the form of lower premiums and copays.¹ It’s all about increasing patient access to life-saving medicines and insurer buy-in is necessary to make that happen.

Policymakers – Changes need to be made to policy, including Medicare Part B coding, in order to realize the full benefit of biosimilars. It is imperative that the FDA provide timely regulatory guidance and address appropriate hurdles on issues such as naming and interchangeability in order to sustain the momentum we’re gaining. Unique reimbursement codes are necessary to foster a competitive marketplace and support direct and indirect cost savings that will make our health system more sustainable. Additionally, we must put the patient at the center of the FDA’s guidance for naming and interchangeability to reduce confusion and unreasonable requirements that ultimately impact patient access. A study conducted by Lots of Online People (LOOP) on behalf of Sandoz found that of ³,532 US residents, 73 percent of Republicans and 73 percent of Democrats supported biosimilar drug treatments becoming widely available.³ Policymakers need to take action now to make that happen.

Prescribers – A SERMO poll conducted in October 2016 found that there are still significant knowledge gaps among physicians about biosimilars, what they are and how they can be used to increase access to patients and reduce cost.⁴ Payers, policymakers, and us, as an industry, need to do a better job of educating doctors about biosimilars. Doctors need to understand the science behind them, that they are formulated with a primary amino acid sequence that is 100 percent identical to the reference product, and that to be approved by the FDA, a biosimilar must demonstrate in clinical trials that patients can expect the same results as the reference product in terms of the efficacy and safety profile as well as overall quality.

Patients – Patient education should also be a priority. A study published in the journal Patient Preference and Adherence, found that 54 percent of those surveyed who had been diagnosed with a disease that could potentially be treated with a biosimilar in the future had never heard of biosimilars before.⁵

The RAND report also lists intellectual property as an issue that will impact the future of biosimilars.

We’ve made some progress this year on that front; the US Supreme Court ruling in Sandoz v. Amgen provided much needed clarity on how the “patent dance,” a process by which biosimilar manufacturers and reference product sponsors can resolve potential patent risks, will function. The justices unanimously ruled in favor of Sandoz that notice of commercial marketing can be provided before FDA approval, accelerating patient access to future US biosimilars by 180 days.

There is still work to be done for us to catch up to Europe, but the momentum is building. If action is taken now, increased access, and ultimately cost savings, will soon follow.

1. Mulcahy AW et al. Biosimilar Cost Savings in the United States: Initial Experience and Future Potential. RAND Corporation. October 23, 2017.
2. Pew Charity Trusts. Specialty Drugs and Health Care Costs. Available at http://www.pewtrusts.org/en/research-and-analysis/fact-sheets/2015/11/specialty-drugs-and-health-care-costs. Accessed October 2017.
3. Survey conducted by LOOP (Lots of Online People) September 2016. Sandoz data on file.
4. Cohen, H., Beydoun, D., Chien, D. et al. Adv Ther (2016) 33: 2160. https://doi.org/10.1007/s12325-016-0431-5
5. Jacobs, Ira et al. “Patient Attitudes and Understanding about Biosimilars: An International Cross-Sectional Survey.” Patient preference and adherence 10 (2016): 937–948. PMC. October 2017.