AAM White Paper Highlights Need for Biosimilar Competition to Bring Down Costs

A white paper released this month by the Association for Accessible Medicines (AAM) says that brand-name drugs are behind high prescription drug costs, and that those costs aren’t only hurting patients’ financial wellbeing, but also endangering their health.

As many as half of all patients with chronic diseases may not take their medications as prescribed, due in part to cost, according to the white paper, and “Non-adherence is considered responsible for approximately 125,000 deaths, at least [10%] of hospitalizations, and a substantial increase in morbidity and mortality annually.”

The need for lower-cost therapies is especially critical for those patients receiving high-priced biologics drugs, says AAM, pointing to the more than $100 billion in annual spending on biologics in the United States alone. The white paper reports that “Women, lower-income and elderly patients would particularly benefit from access to biosimilar medicines.”

While the generic drug business model has been largely successful in driving down costs of small-molecule drugs, says AAM, the consolidation of wholesaler and pharmacy partnerships into 3 large purchasing groups “…creates an imbalance compared to a highly fragmented generic drug market with more than 200 generic drug manufacturers…as multiple manufacturers continue to compete for the business of only [3] purchasers, many previously profitable markets are closed to many manufacturers.” Furthermore, market entry for biosimilars and generics can be forestalled by anti-competitive practices, patent litigation, lack of regulatory clarity, and incentives to prescriber high-cost medicines in Medicare.

In order to spur competition and ensure the availability of lower-cost biosimilars, says AAM, Congress should enact the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act of 2016, which would allow a generic or biosimilar drug developer to bring a civil action against the license holder of a novel drug if the latter declines to make available enough samples for testing as part of generic or biosimilar drug development. Additionally, AAM calls on policy makers to scrutinize potential “gamesmanship” in the patent system and to ensure that biosimilars have a level playing field in the Medicare marketplace.

AAM also calls for the repeal or modification of the Medicaid Generics Penalty, continued regulatory attention to complex generics, a focus on state drug-pricing laws to address the biggest drivers of cost increases, and increased use of generics in Medicare as key ways to maintain a healthy generics market.

“Unless policymakers take steps to address these challenges, the risk of shortages among generic drugs is likely to increase further, threatening patient health,” added AAM’s president and CEO, Chip Davis, in a statement.