Drug Pricing Forecast Reminds Stakeholders About Role of Biosimilars

A raft of biosimilars possibly coming to market is not expected to relieve the burden of healthcare costs in 2019, but it is possible that the combination of products in the queue, as well as reimbursement changes, could be the beginning of change, according to a drug pricing forecast out this week from Vizient.
Allison Inserro
February 01, 2019
A raft of new biosimilars coming to market is not expected to relieve the burden of healthcare costs in 2019, but it is possible that the combination of products in the queue, as well as reimbursement changes, could be the beginning of change, according to a drug pricing forecast out this week from Vizient.

Vizient, the largest group purchasing organization (GPO) in the United States, said this week that it projects a 4.28% increase for pharmaceutical purchases made by organizations between July 1, 2019, and June 30, 2020. In an interview with The Center for Biosimilars® (CfB), the senior vice president of pharmacy solutions for Vizient said that momentum is building for change in biosimilars.

“Unfortunately I don’t think there’s going to be a watershed moment where we can draw to a date where it's going to happen. I think it's just going to continue to happen over the next few years and I think a lot of this has to do with experience,” said Dan Kistner, PharmD.

He credited the support of the FDA and its commissioner, Scott Gottlieb, but cautioned that more acceptance has to come from the payer side if they really want to lower the cost of prescription drugs. Many still prefer the originator drug for their formularies, he said. Payers will need to “prefer and promote” biosimilars for acceptance to happen.

“They’re looking at a short-term win, and they’re not understanding the long-term win,” he said.  

He described a long-term win as one where a payer could drive the cost of a branded medicine down as much as 90% over time with competition. And he said his “biggest fear in the next few years” is that manufacturers may decide to stop investing in biosimilars and pull out of the market if uptick does not improve.  Experience, time, and familiarity with biosimilars by providers will help, as will education.

“A quick win on one originator because you’re getting a better rebate,” he said, means that payers are missing out on long-term savings opportunities.

This will become especially urgent as bevacizumab, trastuzumab, and rituximab will each have at least 1 commercially launched biosimilar by mid-June 2019, the pricing report said.

In addition to discussing biosimilars, Kistner said Vizient that recently met with Civica Rx to discuss some possible collaboration, although he declined to go into specifics. Civica Rx is the nonprofit generic drug company formed last year to combat drug shortages and high prices for generic drugs; it currently has 17 health systems as members.

"We're trying to find creative ways to work together," said Kistner. In addition, on the topic of drug shortages, Kistener criticized a JAMA article from last year that said GPOs could do more to alleviate drug shortages and lower drug prices.

“Unfortunately, the majority of the claims made in the JAMA article appear to have originated from previously debunked claims made by a small group of long-time critics,” he wrote in a subsequent email sent to CfB. For example, he said that Vizient, a nonprofit with thousands of members, does not require healthcare providers to use the Vizient contracts and are allowed to purchase "off contract."

On the topic of interchangeability, from a patient perspective, Kistner likened it to the struggle for the acceptance of generics. Most patients have no issues when a physician substitutes a generic for a branded product.

“I think we have some of the same issues that branded and generic drugs had decades ago,” said Kistner. “I have seen a lot of growth in the acceptability and the understanding of the equivalency between the products and the clinical acceptability of the outcomes.”

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