Part 2: Surya Singh, MD, on Whether Biosimilars Will Lower Drug Costs

September 3, 2020

Surya Singh, MD, president and owner of Singh Healthcare Advisors LLC in Lexington, Massachusetts, discussed the future for the US adalimumab market and whether biosimilars can deliver on the promise of lower cost health care.

To watch part 1 of this interview, click here.

The Center for Biosimilars® (CfB): Hello, I'm Matthew Gavidia. Today on MJH Life Sciences' Medical World News, The Center for Biosimilars® is pleased to welcome Surya Singh, MD, president and owner of Singh Healthcare Advisors LLC, based in Lexington, Massachusetts.

Are payers preferring to cover multiple biosimilars of the same drug or are they keeping it narrowed to 1 or 2 biosimilar versions and why?

Singh: I think that question really gets to the heart of the competitive dynamics. So, a payer deciding to prefer multiple agents rather than 1 really depends on how much value the entity on the other side of the negotiating table thinks that they can derive from offering a better deal, essentially at a lower cost and a larger reduction in cost from the discount rebate.

And so, if the deal is good enough, I think that you're going to see people narrowing the biosimilar on the formulary to just 1 particular biosimilar product. And then, there are lots of examples where multiple biosimilars are covered and both the patient and provider have fewer restrictions, or it's based more on inventory and product selection by the provider than it is by formula or requirements. But usually, that's a marker of there not being a competitive dynamic that would lead people to reduce their price further in order to get narrower or even exclusive coverage.

CfB: What do you envision happening when, say, if 9 adalimumab biosimilars come onto the market in 2023? What will formulary options look like?

Singh: So, adalimumab (Humira) is the largest drug [by revenues] currently. It's going to be a new chapter in competition, because I think it will enter into this highly competitive market [with many biosimilars]. Whether there will be the ability to be able to really treat those new biosimilars interchangeably remains to be seen. I actually don't know offhand how many of [those biosimilar companies] are planning on pursuing biosimilar versus interchangeable designations. But as it gets closer, I will be tracking that closely, as many people will be.

I think the most safe set of assumptions about that situation is that with enough competition it's still not going to look like a generic type of price erosion, but with 9 biosimilars we should be able to get a greater degree of price reduction than what we've seen in the biosimilar categories that have launched today. And the stakes are very high, as has been well documented and publicized. There have been a lot of inflationary price increases for reference adalimumab over the years. I expect to see for biosimilars—or rather, I hope—I hope [price reduction] happens rather quickly. But it probably will take a couple of annual bidding cycles for the effect to take hold.

CfB: To what extent is the promise of biosimilar access and affordability a reality based on these factors?

Singh: I think the current state of biosimilars based on the projections that most people put into the public domain, including me, before the first ones launched, is that they're underperforming in terms of how much penetration and adoption overall they've gotten. There are examples where it's better. But is this where we thought we'd be in 2020? No. I don't think we've seen as much net cost reduction as we thought we would.

That said, what is it that can drive more access and affordability of these biosimilars that have [entered the market] or are about to enter over the next few years? I think that we're able to do 2 things: One is at the formulary construct and the market basket of drugs that's used for competition. I think some of the major players, both on the managed care side and the pharmacy benefit management area, are now able to manage across benefit more effectively. And so, that really should allow a greater amount of price reduction when it comes to the classes that are seeing biosimilars introduced. That's a big deal.

And then, the second one affects the access and affordability impact. There's not a single number that I can give, but as we get more companies willing to take on the risk of having a biosimilar enterprise and go through the expense of launching onto the market—most people who follow this space know that a lot of the major players and companies that have biosimilar programs now are the same ones that had biologic programs in the first place; and so, they have a lot of experience with this type of manufacturing—but as we get more entrants on average into a particular category, I think we'll start to see very effective competition that will really help us get a greater amount of affordability in those categories.

CfB: And lastly, do you have any concluding thoughts?

Singh: I'm still optimistic about biosimilars and their impact. They're one of the factors that I think about when I think about the overall ability of the pharmacy side of health care spending to generate headroom for new therapies. I think biosimilars are a big part of where we need to, in essence, seize the opportunity and see adoption that can help us drive greater price reduction so that we can all afford to pay for some of the innovative new therapies that are in specialty pharmacy and across health care in general.

I do a lot of work on cell and gene therapies, and I'm very interested in seeing those take hold and be adopted when they have been proven to be effective and can really offer something that maybe is not quite a cure but approximates a cure for people. And in order to do that we need to create headroom by having price reductions in some of the classes that are no longer novel and stop having either line extensions or creative patent extensions that lead to a longer life for the reference agent to be either exclusive or really dominant.

Anyway, my concluding thought is that biosimilars can't drive generic-type price erosion, and ultimately, the ability to interchange across many manufacturers is not going to happen in every category. But biosimilars can be, economically, a lot more advantageous to the system, to society, to net cost reduction, and pharmacy than they have been so far. So, it's just taking longer, but we’ll ultimately get there.

CfB: To learn more, visit our website at centerforbiosimilars.com. I'm Matthew Gavidia. Thanks for joining us.

Singh: Thank you.


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