Despite the United States’ slow start in biosimilar uptake, history shows that things can change, according to Michael Kolodziej, MD, who presented at the National Comprehensive Cancer Network (NCCN) 2020 Virtual Conference.
Although biosimilar uptake has been slow in the United States, there is plenty of hope for improvement, given past actions aimed at promoting biosimilar acceptance, according to Michael Kolodziej, MD, vice president and chief innovation officer at ADVI Health, who presented at the National Comprehensive Cancer Network (NCCN) 2020 Virtual Conference.
The European experiment with biosimilars has provided an outcome that US consumers and payers can look forward to, Kolodziej said. “Europe figured out a regulatory pathway for biosimilars about 10 years before we did, and as a consequence, we have about 10 years of biosimilar experience in Europe, and let’s just say that biosimilars have assumed a very, very important role in the use of biologics off patent in Europe, and they have produced significant discounts to the payers in Europe,” he said.
The Hatch-Waxman Act of 1984, officially the Drug Price Competition and Patent Term Restoration Act, was the first piece of legislation to support the development of generic products. Although generic drugs and biosimilars are not the same, this act served as the framework for the biosimilar pathway the United States has today, according to Kolodziej.
Prior to the act, only about 35% of originator drugs had to contend with generic competition. Today, roughly 90% of all prescriptions written in the United Sates are for generic drugs.
“This is 1 of the 10 most important and influential pieces of health care legislation in the last 50 years because it established a mechanism by which generic drugs, could be approved by the FDA in a fairly prompt fashion.…It really made generics part of our everyday life,” Kolodziej said.
The Hatch-Waxman Act Set the Standard
The Hatch-Waxman Act allowed the generic drug pathway to be abbreviated by forgoing safety and efficacy trials in favor of reference product equivalency data. It also established exclusivity rights for the first generic of a product and standardized the process of appeals for patent extension of reference drugs.
About 25 years later, the Biologics Price Competition and Innovation Act (BPCIA) of 2009 was created to serve as the Hatch-Waxman Act equivalent for biosimilars by requiring biosimilar developers to conduct trials to establish biosimilarity and allow for lower-cost alternatives for reference biologics to enter the market.
Requirements for biosimilarity included establishing proof that the biosimilar is highly similar to the originator biologic and ensuring there are no clinically meaningful differences in safety, purity, and potency compared to the originator biologic.
Additionally, the BPCIA differed from the Hatch-Waxman Act by extending exclusivity periods for originator products from 5 years to 12 years and created an interchangeability designation, allowing biosimilars to be switched without physician consent if these drugs meet certain standards.
After the BPCIA was enacted, CMS established a nomenclature for biosimilars in 2018 that allowed for better pharmacovigilance and competition. It consisted of the reference product’s “generic” name followed by a 4-letter suffix, representing the individual biosimilar version. Biosimilars were also assigned specific Q codes to facilitate payment.
Kolodziej mentioned another CMS rule change supporting biosimilars. This allowed biosimilar reimbursements to be based on the payment for the reference product. “The expectation was that the cost of the biosimilar would be less than the reference product, and the reimbursement of the biosimilar would be based on the average sales price of the reference product.”
Meaningful Savings But Not Enough
Although biosimilars have created opportunities for savings, they represent a small portion of the overall drug spend, and the trend for retail prescription drug spending shows that government and private health payers are paying an increasing share of drug costs, 43% each vs 14% for consumers’ out-of-pocket expense in 2015. In 1960, by contrast, the out-of-pocket expense was well over 90%, Kolodziej said, citing Brookings Institution data.
“Payers are paying the lion’s share of the cost of drugs, and they are very concerned about it, [but] biosimilars actually provide an obvious opportunity for payers to reduce spend,” which can be seen in Europe’s system, said Kolodziej.
When it comes to biosimilar market development, Europe has a 10-year lead on the United States. In Europe, biosimilars have produced significant savings.
On the other hand, the United States has had a slow start because it has been much easier to get biosimilars approved than to get them on the market, according to Kolodziej. However, Kolodziej said that the United States should not assume the situation won’t improve.
“The federal government is the largest purchaser of cancer care services in in the United States and in the world and the feds want biosimilars to be successful,” he said, naming the Trump administration and former FDA Commissioner Scott Gottlieb as big proponents of biosimilars.
More from the NCCN 2020 Virtual Conference can be found here.