Biosimilars provide significant savings and encourages competition in the biopharmaceutical marketplace but the United States needs to do more to empower uptake and address adoption barriers, according to Robert Popovian PharmD, MS.
For years, policymakers, insurers, pharmacy benefit management companies (PBMs), and certain health care professionals have claimed that market competition does not drive down drug spending or prices. These opinion leaders have seized this false narrative because we don’t know the actual net drug spending or pricing because of rebate contracting, which creates opacity in the economics of the biopharmaceutical marketplace. Fortunately for biosimilars, this untrue fable has been discredited.
We know today that the mere presence of a biosimilar competition suppresses the prices of reference biologics. According to Amgen, we have observed a reduction in average sales prices (ASP) for reference biologics and biosimilars. ASP is as close to transparent net pricing as one can get to in the drug marketplace since it incorporates most rebate concessions in the final calculation of the price.
Biosimilars singularly are responsible for saving millions of dollars for the true payers of the health care system – patients, employers, and the government. Such savings have been realized despite hurdles erected by PBMs and insurers as they strive to maximize their rebate contracts, thus blocking biosimilar access. In 2020, biosimilars saved $7.9 billion, more than triple the $2.5 billion saved in 2019. Meanwhile, biosimilars have created $238 million in average annual out-of-pocket savings for patients.
These savings will exponentially increase in 2023 as biosimilar competition is introduced for Humira in the United States. Humira is the number one selling biopharmaceutical globally, with annual sales of over $17 billion in the United States. market alone, according to Humira’s maker AbbVie. Starting in January and continuing throughout the year, 7 Humira biosimilars will be made available in the market with the potential for multi-billion dollar savings for patients, employers, and the United States. government. The path to savings is even more likely since 1 Humira biosimilar has gained interchangeability designation from the Food and Drug Administration (FDA) with others being considered. Hence, we need to do everything possible so that savings are realized.
Unfortunately, the potential success story has some potholes as the FDA has created unnecessary uncertainty in the competitive landscape. FDA has adopted a final policy that the “strength” of an injectable biological product is based on both the total content of the drug substance (in mass or units of activity) and the concentration of the drug substance (in mass or units of activity per unit volume). The FDA changing the regulatory rules regarding a biosimilar’s strength vs its potency can create probable consequences of disincentivizing both the development and, more importantly, uptake of biosimilars.
As most clinicians will attest to, in some therapeutic classes, medicine concentration is an important distinction as it could impact patient outcomes. However, in most cases, the issue of concentration is irrelevant. For example, the manufacturer of the Humira was granted a label extension by demonstrating that high- and low-concentrations of the brand medicine were equal in bioavailability without any expected differences in risk or benefit.
The continued failure of the FDA to address this regulatory conundrum is problematic as it provides a potential roadblock as the reference biologic companies will seize upon the uncertainty and thwart the adoption of biosimilars by introducing varying concentrations of an established product. As Peter Pitts, Wayne Winegarden, and I stated in an opinion piece, “Business as usual” under the existing language of the Biologics Price Competition and Innovation Act of 2009 (BPCIA) means continued disincentives to promote a more aggressive uptake of FDA-approved biosimilars. Worse, reinforcing the status quo moves us even further away from a health care ecosystem based on competitive and predictable free-market principles – precisely the reverse of the intent of the BPCIA.
To ensure that the current definition of strength will not undermine biosimilar adoption today or in the future, Representative Schrader introduced HR 7047 to allow the Secretary of HHS to clarify that the definition of strength should be irrespective of concentration when appropriate.
Biosimilars have provided significant savings and reaffirmed the economic principle of competition in the biopharmaceutical marketplace. We need to do everything to empower biosimilar uptake and address marketing, contracting, or regulatory barriers that undermine their successful adoption in the United States.