Skylar Jeremias

Despite legislation designed to facilitate biosimilar competition, “structural challenges” have hindered adoption of these money-saving drugs, and several policy initiatives could spur faster and wider biosimilar use in the United States, according to the philanthropic advocacy group 

In a health policy brief, Arnold Ventures suggested multiple policy changes the FDA, lawmakers, and CMS can implement to expand access to biosimilars and promote more savings. These include changing the biosimilar naming convention, easing requirements for biosimilar approval, stimulating biosimilar use with higher reimbursement policies, and proactively investigating anticompetitive practices, the group said.

Early estimates of achievable biosimilar savings from 2017 to 2026 ranged as high as $150 billion, according to the report.

“Actual uptake has lagged behind these savings estimates. By the end of 2018, seven biosimilars had launched in the US market, but sales for these products [represented] less than 1% of all US biologic sales volume,” the report said. There are 28 approved biosimilars and 18 launched biosimilars in the United States. By comparison, over 60 biosimilars have been authorized in Europe, and according to Arnold Ventures, these are marketed at discounts up to 70%.

In the United States, barriers such as excessive product patenting, deliberate misinformation surrounding biosimilar equivalence, and restrictive payer formularies combine to prevent biosimilars from achieving the success that generics have seen. In the United States, generics accounted for 90% of prescriptions and saved nearly $300 billion in 2018, according to Arnold Ventures. Specialty drugs, which include biologics and biosimilars, currently account for 43% of medicine spending, according to 

In particular, the brief calls on congressional leaders to work with the FDA to discuss whether factors distinctive for biosimilars, such as random-letter name suffixes and interchangeability designations, are even necessary, given that they are not required for other types of drug products. The authors argue that these requirements can create confusion among patients and providers about biosimilars.

 have shown that 4-letter suffixes to distinguish biologics from one another can cause patients to perceive biosimilars as less similar to original brand drugs and affect their willingness to use them.

, which allow for greater access to biosimilars by allowing them to be switched with originators at the pharmacy counter, may require biosimilar manufacturers to perform costly and lengthy switching studies.

On a state level, policymakers need to guarantee that substitution laws give pharmacists flexibility to exchange expensive biologics for cheaper biosimilars without needing to seek permission from a physician, the Arnold Ventures report said.

The brief also said that Congress could direct the Federal Trade Commission to investigate anticompetitive practices used by originator manufacturers, including pay-for-delay deals, rebate traps that discourage biosimilar uptake, and misleading advertising about biosimilars.

The group also recommended that Congress increase reimbursement for biosimilars under Medicare Part B or require that biosimilars be used before costlier formulations. A version of this concept has been proposed in the Senate (

) and would provide a temporary reimbursement increase of 2% over 5 years for biosimilars.

The group said the FDA should evaluate whether biosimilars are being be held to higher standards than originator products, such as requirements for additional switching studies to demonstrate biosimilar interchangeability with reference products.

Articles

Arnold Ventures suggests ways the FDA and other governmental entities can get more biosimilars into circulation, faster. 



Advocacy Group Details Solutions for Sluggish Biosimilar Uptake 

Hospitals, infusion centers, and payers all need to take steps to promote biosimilar use in order to overcome current uptake barriers, said presenters from Health First of Florida during the Academy of Managed Care Pharmacy’s Nexus 2020 Virtual conference.

“This is really a team effort, and we should all take a multifaceted approach to provide education, update our policies, and prepare staff to really advocate for biosimilar use,” said Gene Terkoski, PharmD, a presenter and senior managed care pharmacist for Health First Health Plans.

The presenters said that increased biosimilar uptake within the Health First integrated delivery network could generate an annual savings of $1.49 million for health plans, $1.41 million for infusion centers, $54,671 for hospitals, and $200,000 for members.

Hospitals face 5 major barriers to biosimilar uptake, according to presenter Jay Pauly, PharmD, system clinical pharmacy manager at Health First. These include insufficient understanding of the FDA’s evidence requirements for biosimilar approval, lack of knowledge of biosimilar safety and efficacy, not having biosimilar interchangeability status, and concern about drug administration locations.

Pauly said that although originator biologics are very expensive and take a long time to develop, costing about $1 billion and taking about 12 years, biosimilars are actually cheaper and quicker to produce because much of the data for biosimilar benefits were already established for the reference product, meaning that biosimilar developers can skip the discovery phase and shorten clinical trials.

Biosimilars can also receive approval from the FDA for multiple indications even if researchers didn’t test for every single indication approved for the reference product (indication extrapolation), which can also save money on clinical development.

To combat lack of understanding and education surrounding biosimilars, Pauly suggested that hospitals establish provider education and training programs, where studies assessing purity and potency of biosimilars, along with analytical and animal studies, would all be highlighted.

Additionally, education materials should emphasize that administering biosimilars at an outpatient facility saves money because biosimilars may be priced lower than a reference product and outpatient care will always be less costly than inpatient care, presenters said.

 policies for treatment-naïve patients to have them start on a biosimilar rather than the reference product.

Infusion centers face many of the same barriers as hospitals but may have to work harder to get everyone on board with biosimilars, as physician leaders, pharmacy and therapeutic committees, and providers across specialties must buy into the biosimilar concept, according to Matt Moser, PharmD, one of the presenters and lead clinical hematology and oncology pharmacy specialist for Health First.

Similar to hospitals, Moser said, infusion centers should create proactive training programs for providers and establish automatic biosimilar substitution policies.

Moser said that education and training for infusion center stakeholders must focus on how biosimilars have done so far, extrapolation of indications, "drift,” and biosimilar efficacy.

The European Union’s decade-long head start on using biosimilars compared with the United States showed that biosimilars can reduce drug costs by establishing a competitive market and are just as efficacious as the reference products.

Moser explained that drift, which is the variation from one drug batch to another as a result of changes in the manufacturing process, should not be concerning for providers as drift also exists for reference products.

Switching patients from reference infliximab to a biosimilar was established to be safe in the 

 study despite federal interchangeability designations not being available for biosimilars currently, Moser said.

According to Terkoski, health plan barriers center around billing and reimbursement confusion, with many payers worrying about how biosimilars are reimbursed, lack of education, and member cost share burdens.

Major health plan policy changes that Terkoski suggested were removal of 

 requirements for biosimilars by payers and implementation of 

 requirements to make it easier for physicians and pharmacists to provide biosimilars to patients and encourage biosimilar use over a reference product from the start.

Terkoski said that education programs should focus on average sales price (ASP) based reimbursement, which is typically the ASP of the biosimilar plus 6% of the reference product’s ASP. However, prior to the establishment of an ASP, early claims for biosimilars result in significantly higher reimbursements because they are based on the wholesale acquisition cost plus 6%.

Terkoski also emphasized that a major concern is that member co-pays will increase as a result of biosimilars. “In reality, the beauty of the coinsurance is that as the cost of the medication decreases, so does the member’s co-pay,” he said.

Overcoming biosimilar uptake barriers will take collaboration and policy change by hospitals, infusion clinics, and health plans, presenters said at the Academy of Managed Care Pharmacy Nexus 2020 Virtual conference.



Need for Biosimilar Cooperation Among Hospitals, Infusion Centers, and Payers Is Identified

 from the Institute for Clinical and Economic Review (ICER) found that of 6 targeted immune modulators (TIMs), infliximab molecules are the most cost-effective for ulcerative colitis (UC), largely thanks to biosimilar competition.

“Prices are generally too high, even for the significant clinical benefits obtained, but the advent of biosimilars for infliximab has led to dramatic price decreases for this one agent and its biosimilars, displaying the potential cost savings that biosimilars may be able to deliver more broadly in the [United States],” Pamela Brandt, MD, ICER’s chief scientific officer, said in a 

UC is a chronic inflammatory bowel disease that causes long-lasting inflammation and ulcers in the digestive tract. An estimated 900,000 individuals in the United States have UC, and the estimated economic burden is $15 billion to $32 billion in lost work, schooling, and productivity, ICER said.

ICER evaluated the comparative clinical effectiveness of popular drugs to treat UC, including adalimumab (Humira), golimumab (Simponi), tofacitinib (Xeljanz), ustekinumab (Stelara), vendolizumab (Entyvio), reference infliximab (Remicade), and 2 infliximab biosimilars (Renflexis and Inflectra).

The group found that infliximab biosimilars had superior cost-effectiveness in the treatment-naïve patient population, although it said discounts of at least 25% would be needed to align achievable health benefits with the costs of these agents. The lowest cost infliximab biosimilar by annual wholesale acquisition cost (WAC) was Renflexis ($18,000). Annual WAC costs of adalimumab, golimumab, ustekinumab, and vedolizumab ranged from $43,800 to $72,400.

ICER said evidence is largely insufficient to differentiate these 6 agents by efficacy, although it concluded that all of these TIMs “produce net health benefits at least comparable to adalimumab” and “vedolizumab was found to produce greater rates of clinical response and remission over adalimumab” in both treatment naïve and pretreated patients.

ICER said that prices for infliximab products are still “marginally” too high for cost-effectiveness; however, members of the independent appraisal committee that evaluated these costs decided that infliximab molecules represent “intermediate” long term value because they improve patients’ ability to work, receive education, and achieve better health.

Among the 6 molecules, infliximab is the only one that has biosimilars in the US market. To date, there are 6 FDA-approved adalimumab biosimilars; however, none have launched in the United States. A biosimilar for vendolizumab is currently in development by Polpharma Biologics. Bio-Thera Solutions is developing biosimilars for ustekinumab, tocilizumab, and golimumab.

For the indication of UC, ICER found that the prices net of rebates for reference infliximab and its biosimilars were the closest to meeting ICER's recommended health benefit price benchmark (HBPB), a range that suggests the highest price a manufacturer should charge for a therapy based on how much improvement, both physically and financially, a patient receives from the treatment.

“In short, it is the top price range at which a health system can reward innovation and better health for patients without doing more harm than good,” the authors wrote.

Whereas the minimum discount needed for infliximab biosimilars to reach HBPB was 25%, ICER said, noninfliximab TIMs require a significantly larger discount in addition to their current estimated rebates to achieve their respective HBPB ranges, including 85% for adalimumab and 82% for ustekinumab.

The recommended HBPB per year is $8800 to $10,900 for infliximab molecules, $5800 to $6900 for adalimumab, $6300 to $7600 for golimumab, $9200 to $12,000 for vendolizumab, and $9000 to $17,200 for ustekinumab.

The report includes policy recommendations from ICER’s California Technology Assessment Forum (CTAF), based on ICER’s evidence on cost-effectiveness, in order to help stakeholders, interpret and use the information found to improve the quality and value of health care.

CTAF recommended that all stakeholders collaborate to ensure that patients with UC are increasingly benefiting from TIM biosimilars as they enter the market.

It said payers should structure their coverage to prevent struggles for patients where cost determines what treatment approach they get. Specialty society guidelines and drug labels should be routinely checked for changes and policy adjustments.

CTAF also said prior authorization criteria may be helpful to manage drug costs and price negotiations for costly TIMs because there are no clear biomarkers or predictors for whether any treatment for UC would work for a given patient. If prior authorization is used, criteria should be based on clinical evidence, specialty society guidelines, and the opinions of clinical experts and patient groups.

CTAF also recommended that active control arms should be included in phase 3 clinical trials for UC therapies and that investigators should make a strong commitment to obtain real world evidence to fill in gaps from previously conducted randomized control trials and allow for TIMs to be accurately compared with one another. Active control arms enable comparisons of investigational drugs with standard therapy.

An at-a-glance report from ICER covers the above topics in abbreviated form and is available by clicking 

Reviewers found that costs of reference infliximab and its biosimilars make it the most cost-effective therapy for ulcerative colitis (UC) among targeted immune modulators.

ICER: Infliximab Is Highest in Cost-Effectiveness for UC

As large employers experiment with ways to jump start the use of lower-cost biosimilars among their staff, the former Dean Foods tried a health plan carve-out—on both medical and pharmacy benefit sides—that led to a cost savings of $174,600 (77% reduction) by switching employees on a select number of originator specialty drugs to biosimilars, according to a report.

describes a no-exceptions policy for switching from reference drugs to biosimilars and was funded by Pfizer, a biosimilar developer and manufacturer that said it did not endorse the content of the report, which included independent viewpoints from Vivio, a specialty drug management company, and dairy company Dean Foods, which was acquired earlier this year after a Chapter 11 bankruptcy filing.

In 2019, Dean Foods, which this year was acquired by Dairy Farmers of America, spent $52,900 on 4 biosimilars, well short of the $227,500 the company would have spent on 3 originator products. The carve-out was arranged through Vivio and enabled Dean Foods to sequester specialty drug costs and management so that savings could be achieved outside of the structure imposed by a pharmacy benefit manager (PBM) plan.

Switching employees on expensive originators to biosimilars, generic drugs, and lower-cost therapeutic alternatives while also discontinuing experimental drugs generated $1.7 million in clinical savings (avoided therapy costs) for the former dairy company, the report said. But given all anticipated vs actual costs from the carve-out program, Dean Foods saved $4.35 million in 2019, according to the report. This includes supply chain savings.

Vivio said in the report it achieves savings by seeking out lowest-cost drug suppliers, passing 100% of rebates to its customers, and taking advantage of manufacturer discounts. It said that “typically, 15% of prescribed specialty drugs have lower-cost therapeutic equivalents alternatives such as biosimilars, generics, and less-costly branded drugs.”

In the case of Dean Foods, the company decided to try a carve-out when it realized that although just 2% of its plan members used specialty drugs, this amounted to one third of the company’s overall drug spending.

Vivio estimated that based on that 2% rate, 400 plan members in a population of 20,000 insured lives would be taking specialty drugs, and of those, 15% would have a lower cost, clinically equivalent alternatives, such as biosimilars, generics, and other lower-cost products. Dean Foods employed approximately 14,500 individuals at the close of 2019, according to Statista.

The 4 biosimilars used by Dean Foods plan members were not identified in the report. The savings spread across biosimilars was very uneven. For example, Dean Foods achieved savings of $116,700 (73%) on 1 biosimilar, but just $3000 (71%) on the next largest saving biosimilar, suggesting low use of this biosimilar relative to the other.

Discussing its methodology for promoting biosimilar use, VIVIO said biosimilars are specified for use when therapeutically equivalent and appropriate for a patient, with “no exceptions.”

The company said some employees may complain to their employer or specialty therapy manager about being forced to switch from an originator to a biosimilar; however, most accept the change without complaint.

Employees who express concerns are given “respectful explanations” that include detail on clinical and cost savings potential with biosimilars.

VIVIO said most health care providers accept conversions from originator products to biosimilars, and if physicians have concerns they are provided with clinical evidence supporting why biosimilars are preferred.

VIVIO said in the report that, if requested, physicians are granted a peer-to-peer discussion, which, it said, usually resolves the physicians’ concerns.

Many employers face blocks to biosimilar utilization in the form of contracts with PBMs and drug carriers. Contracts with PBMs can restrain the use of lower-cost alternatives because PBMs have a large say in what products get added to employers’ formularies and often favor the use of expensive originator products.

In August 2020, the Midwest Business Group on Health (MBGH) issued a 

 for employers that laid out ways for employers to both efficiently negotiate contracts with their PBMs and incentivize the use of biosimilars.

“Contract optimization strategies define all contract terms and pricing so that all PBM revenue is transparent and retained by the employer, all relationships are free of conflicts, and you can use any PBM you want. If your PBM says no or they're not willing to do some of these things, find another PBM that will,” said Cheryl Larson, president and CEO of MBGH, in a recent 

Before its acquisition this year, Dean Foods attempted a specialty drug carve-out to save with biosimilars and generics.

Author | Skylar Jeremias

Advocacy Group Details Solutions for Sluggish Biosimilar Uptake

Need for Biosimilar Cooperation Among Hospitals, Infusion Centers, and Payers Is Identified

ICER: Infliximab Is Highest in Cost-Effectiveness for UC

Case Study: Dean Foods Attempts Savings via Specialty Carve-out