Part 1: Chad Pettit on Amgen’s Assessment of the US Biosimilar Marketplace

October 27, 2020

Chad Pettit, MBA, executive director of marketing and team leader for global biosimilar launches at Amgen, discussed Amgen’s recent report on the state of the US biosimilars marketplace.

To read more on Amgen's report, click here.

The Center for Biosimilars® (CfB): Hello, I'm Matthew Gavidia. Today on MJH Life SciencesTM Medical World News, The Center for Biosimilars® is pleased to welcome Chad Pettit, MBA, executive director of Marketing and Global Biosimilars commercial lead for Amgen. Great to have you on.

For our first question, there have been 2 biosimilars approved all year in 2020. Some feel this is a slow pace. Why is Amgen so upbeat about the rate of biosimilar entry?

Pettit: Yeah, that's a great question, Matthew, and thank you for taking time [to speak with me]. Just as a little background. Amgen has been developing biologic medicines for 40 years and we understand innovative medicine. We've invested in biosimilars. We've got a portfolio of 10 biosimilars that we're launching, with a total investment of about $2 billion. So, we're very optimistic about the biosimilars marketplace and the direction it’s going.

If you look at this point in time, which I think is really where your question’s getting to, it's really a time of remarkable change. Today, we've got 18 FDA-approved biosimilars on the market. There are more on the way. Last year was a really incredible year. We saw a 65% jump in the number of approved biosimilars and 157% increase in the number of biosimilars that are available on the market. So, when we look at this year, we really believe that the US marketplace is really poised to welcome new biosimilars in 2020 and beyond for years to come. And the competition that results from that will result in significant cost savings for the health care system.

CfB: Now for something you just alluded to, Amgen has biosimilars in the market, as well as originators, that face competition. Would Amgen's report be less positive about the market structure if [Amgen’s own] reference products weren't holding up so well against competition?

Pettit: The report was developed as part of Amgen's commitment to staying at the forefront of biosimilar education. And it reveals the mechanisms that support the long-term success and the sustainability of the marketplace with biosimilars. And if you look at the big picture of what comes out from this data, the US marketplace is really well established and accelerating across the key therapeutic areas, which then creates this cost savings, and additional treatment options for physicians and patients.

Like I said, Amgen has been a pioneer in biotechnology for 40 years. We have innovative medicine, which is critical to treating major diseases across patients, and we have biosimilars, which create a competition that allows for cost savings. And so, I think if anything, Amgen is actually more credible because we look at the biologics marketplace in its totality.

CfB: Can you explain how CMS' new HCPCS [Healthcare Common Procedure Coding System] codes for biosimilars have supported improved uptake and better savings?

Pettit: Yeah, that's a good question, and I think it's a bit of a technical question. I would say, and if you look at the report, we actually highlight that assigning a unique HCPCS code for each biosimilar can help promote a robust and competitive marketplace. And it really does it in 3 ways. One is having unique or separate HCPCS codes, creating a foundation for innovation by supporting a sustainable marketplace over the long term.

Secondly, because it creates a sustainable marketplace, it lowers the risks that are associated with developing and marketing these complex products that are biosimilars. And so, it allows biosimilar manufacturers like Amgen to invest with confidence in medicines that are going to compete in the medical benefit side of the US business

The third thing it does is create a level playing field for both the reference products and the biosimilars. And one of the ways it does that is by reducing some of the concerns and confusion around traceability, which shared HCPCS codes would create.

CfB: When the Amgen report talks about overall market share for biosimilars, is that CMS and private payer coverage taken together?

Pettit: Yes. It looks at the totality of the market. The reality is, when you look at the market at that level, every product is going to be different in terms of the proportion of patients who are on Medicare, typically 65 and older, vs those who are receiving coverage through their employer through private coverage. So, there are going to be differences between products.

What I could comment on in terms of market share, in totality, is that if you look at the biosimilars that have launched, many of them have gained significant share for the therapeutic area where they were introduced. As an example, the short-acting granulocyte colony stimulating factors (GCSFs) have achieved more than 70% share in 5 years, and the long-acting GCSFs have achieved 20% share in the first 12 months that they were on the market.

Another example that's important for Amgen is that we just launched 2 oncology therapeutic biosimilars in the United States. And in the first year, we've achieved nearly 40% share and then 30%, respectively, for these 2 products. And in doing so, at list prices that were 15% lower than the reference product and our average selling price was 12% lower than the reference product, which creates savings for both Medicare and commercial payers.

CfB: Some think that CMS has done better at incentivizing biosimilar use than private payers. Do you agree or disagree with this statement?

Pettit: You know, I think the one thing that CMS has done that I think has been really important is that it's laid a foundation for success with separate payment codes.

And what that does is it allows the reference product and the biosimilar products to compete on a level playing field. And because of that, when we look at competition, both in Medicare and with commercial payers, we're seeing really good success. Commercial payers have all the tools they need to support biosimilar competition and uptake and Medicare has created this level playing field and the results really speak for themselves.

Like I said, we had our 2 oncology therapeutic biosimilars secure nearly 40% and 30% of the market share, respectively, in their first year, which is great. That's fantastic. Then, if you look at other products across biosimilars, they're also achieving very strong uptake, which is a reflection of competition. And if you look at the benefits of competition, as competition has grown, we've seen prices fall.

For example, there was a recent Bernstein analysis that suggested that biosimilars are driving a consistent drop in average sales price between 10% to 15%. And if you look at products that have been on the market longer, so let's say up to 5 years, we're seeing a 40% to 50% decline in average sales price, and that's reflected in the trend report. I think this is really a good example of how the marketplace is not only working with biosimilar competition, but really taking off.

CfB: Many feel that biosimilars in the United States have been a failure because payment systems, such as rebates for originator drugs and PBM [pharmacy benefit manager] deals, make it difficult for biosimilars to get a foothold. What's your take on this?

Pettit: Well, I think the proof is in the pudding here. If you look at the marketplace itself, we're seeing really robust marketplaces across many different sets of products. And, like I said, we're seeing an average sales price decline of 20% to 40% for products that have been on the market for 2 years, but 40% to 50% for products that have been on the market for more than 5 years. If we look at just the bevacizumab marketplace, in just the 1 year that we've had [a product] on the market, there has been a 10% decline in the average sales price.

This is a good example of how the marketplace is receptive to biosimilars and [how] stakeholder confidence, which includes payers as well as health systems and providers, is encouraging proper use.

CfB: And to build on what you just said, although we're seeing biosimilar prices declining, why aren't we seeing a commensurate reduction in reference product prices? Can we expect to see similar reduction in reference prices?

Pettit: Yeah, if you look at the trend report, it does a good job reflecting the decline in reference product prices and, overall, what that means is that when you see reference product prices coming down, biosimilars launching at lower prices, and competing on price. That's the mark of a healthy marketplace and a system that's working. And that's the foundation for a longer-term, sustainable marketplace with biosimilars that ensures future investment, both for reference product manufacturers and for biosimilar manufacturers. That's something that at Amgen, since we manufacture both, is really important for us. We believe that's the way to achieve success, by creating lifesaving medicines and cost savings in the health care system.

To watch part 2 of this interview, click here.