How can the US healthcare system learn from the European Union on market penetration for biosimilar products?
A popular misbelief prevails in the United States that our healthcare system is the best and most efficient in the world. The facts, however, state otherwise. According to multiple reports, including a 2013 Institute of Medicine report, the US healthcare system ranks at the bottom of most developed economies while simultaneously being the most expensive.1 The primary reason for this discord in efficiency is a lack of competition in the healthcare markets coupled with a lack of agility.
Over the last 30 years, the biologics class of drugs (monoclonal antibodies, cellular growth factors, erythropoiesis stimulating factors, and granulocyte colony stimulating factors) represents one of the fastest growing sectors of the drug industry world-wide.2 These drugs have applications both in supportive care as well as therapies for chronic autoimmune disorders and cancer care. The development of newer checkpoint inhibitors and immunotherapy has expanded the scope, application, and indications of biologics across a wide spectrum of disorders. However, the ever-escalating cost of care threatens access to life saving medications and posts a threat of financial toxicity for both individuals and the healthcare system.3
The class of biosimilar medicines has emerged as a potential solution across the globe, providing an answer to the ever-expanding expenses of biologics. A vast majority of developed economies as well as developing countries have figured out systemic processes for incorporating biosimilars in their regulatory workflow, leading to the successful entry of biosimilars in their healthcare market. The United States, however, lags by almost a decade in exploring this highly feasible solution to the rising cost of care.
The European Medicines Agency led the process of guideline development for biosimilars in 2005,4 which addressed quality, safety, and efficacy. Subsequent revision of these guidelines in 2013 included nonclinical, clinical, and quality issues as well as product-specific guidance. Although the US Biologics Price Competition and Innovation Act of 2009 was passed and went into effect in 2010, FDA approval of the first US biosimilar product, filgrastim (Zarxio) from Sandoz, came almost 5 years later and was almost a decade behind the first biosimilar drug approval in Europe. Subsequently, the US FDA approved biosimilars for infliximab (Inflectra) by Pfizer in 2016. Approval of the first biosimilar bevacizumab, a monoclonal antibody, in the true cancer therapeutic class is expected later this week.
Despite the promises that this class of drugs presents, both from a cost perspective as well as access, their market penetration does not seem to be likely very soon. Let us consider the challenges associated with a successful launch of biosimilars in the United States.
Unlike the European Union, the US biosimilar market is influenced by regulatory agencies such as the FDA, payers (CMS, HHS-state Medicaid and managed care organizations, Medicare advantage plans, and commercial plans), wholesalers and group purchase organizations, and consumer advocacy groups amongst many other factors. The US healthcare market is significantly different from a majority of European markets. National coverage determination (NCD) policy would be the first hurdle that a new entrant would face. NCD would be followed by implementation by all regional Medicare contractors to prepare their own local coverage determination. These policies would only apply to Medicare beneficiaries. Each state HHS (Medicaid administration) would then need to modify their policies.
Subsequent challenges would be to create the fee schedule. Biosimilar products need to be priced at a level where providers would be encouraged to consider incorporating biosimilars in their offerings. According to a survey conducted by the National Comprehensive Cancer Network in 2011, only about 20% of providers would be early adopters of biosimilar products.5 The lack of awareness and education in the provider world could present formidable challenges that could limit the success of biosimilars in the US markets.
The next challenge would be to educate different stakeholders, including patients and patient advocacy groups, to raise awareness through educational programs. Additionally, payers would need to consider tiering biosimilars as well as managing out-of-pocket costs in a way that would ensure that biosimilar adoption remains an attractive proposition. Lastly, patient assistance programs and indigent patient programs would need to be at par with reference products.
To summarize, several challenges could prevent biosimilar entry into an already tightly-held market, prompting strategic thinking, careful planning, and clear implementation policies. While biosimilars do promise a solution for addressing Part B drug prices in the United States, biosimilar manufacturers would require substantive planning to avoid lost opportunity.