JAMA Viewpoint Explores Barriers to Biosimilar Uptake for Chronic Diseases

A viewpoint recently published in JAMA explains why the biosimilar drugs approved in the United States for treating chronic diseases may not result in the expected cost savings and outlines steps that can be taken to increase the market share of biosimilars.

The viewpoint outlines the history of biosimilars in the United States, from the first approval in 2015 to the present day, when 4 biosimilars have been approved for treatment of 23 indications. [The fifth biosimilar was only recently approved in the United States.] The biosimilars field is expected to expand significantly in the coming years, as patent exclusivity for biologics accounting for $100 billion in sales per year will expire by 2020.

Observers have hoped that this expansion will manifest in the kind of savings seen with small-molecule drugs, where price decreases by an average 70% in the 2 years after a generic is approved, but the viewpoint explains that biosimilars for chronic diseases “are unlikely to yield widely expected cost savings” for 3 reasons:

1. Generic small-molecule drugs are better positioned to gain market share due to automatic substitution laws in every state that either allow or require pharmacists to automatically dispense an equivalent generic drug, as long as the prescriber does not forbid substitution. These laws do not apply to biosimilars, so the market growth of biosimilars is not guaranteed, as patients’ prescriptions must be switched from the branded reference drug to the biosimilar.
2. Payers are unlikely to apply the same formulary management techniques to biosimilars as they have with small-molecule drugs, where the more expensive branded drug is often not covered or costs more for the patient. Insurers have been reluctant to do the same for biologics and biosimilars, as they are apprehensive of potential pushback from patients and physicians. The viewpoint notes that the branded version of infliximab has not been left off from any major formularies in 2017 even though a biosimilar version is being sold at a 15% discount.
3. The last and most important factor, according to the viewpoint, is that the rebate agreements between drug companies, pharmacy benefit managers, and insurers have created a “rebate trap” in which branded drug makers threaten to revoke the rebates on the reference drug if a biosimilar enters the market at a discount. The rebate trap “ensures that payer total costs actually increase relative to costs prior to biosimilar availability,” and it can only be averted if nearly all the patients taking a biologic drug switch to the biosimilar, which is unlikely.

The viewpoint offers 3 potential solutions to address these 3 obstacles. First, it recommends that more states pass laws allowing pharmacists to substitute biosimilars that have been labeled interchangeable by the FDA, which could “bolster competition, lower prices, and increase biosimilar availability.” Next, it recommends taking cues from Europe, where biosimilars have more successfully penetrated the market, by amending treatment guidelines to recommend biosimilars, approving more biosimilars, and enacting automatic switching laws.

Finally, the viewpoint author writes that legislators in more states should propose laws to encourage drug price transparency, particularly concerning rebates. This would educate patients on how the complex system of rebates influences their course of treatment and ensure pharmaceutical companies are held accountable for price increases.

The author notes that the hurdles encountered by biosimilars are similar to those faced by generic drugs over 30 years ago; now, generic drugs are widely accepted by patients and prescribers as a safe and cost-effective treatment option.

“Once the same is true for biosimilars, the health care system will likely realize significant savings,” the viewpoint concludes.