Postmarket Barriers to Biosimilars Cost $2.2 Billion Since 2015, Says Biosimilars Council

September 17, 2019
Kelly Davio

The Biosimilars Council, a part of the Association for Accessible Medicines, has issued a second component of its recent white paper on barriers to biosimilars in the United States; the newly published segment highlights postmarket barriers to biosimilar adoption and says that they have taken a significant toll on the US healthcare system in terms of lost savings.

The Biosimilars Council, a part of the Association for Accessible Medicines, has issued a second component of its recent white paper on barriers to biosimilars in the United States; the newly published segment highlights postmarket barriers to biosimilar adoption and says that they have taken a significant toll on the US healthcare system in terms of lost savings.

The first section of the white paper, released in June 2019, argued that the low number of available biosimilars in the United States is a result of the “patent schemes used by some brand-name pharmaceutical companies to maintain their lucrative product pricing monopolies” and estimated that the financial impact of such delays cost the US healthcare system $7.6 billion in lost savings since 2012.

The newly published material builds on those estimates, stating that, in addition to abuses of the patent system, postmarket barriers to biosimilar adoption—such as anticompetitive practices on the part of reference product sponsors and inadequate incentives to adopt biosimilars—have added an additional $2.2 billion in potential lost savings since 2015, bringing the total amount of lost savings to nearly $10 billion.

The paper relied on data for the 7 biosimilars commercially available in the US market at the end of 2018 (Zarxio, Inflectra, Renflexis, Retacrit, Fulphila, Nivestym, and Udenyca) to calculate lost savings, starting from an assumed price discount of 30% and uptake of 40% for individual biosimilars. Data on pricing were derived from IQVIA information from 2012 through the present.

According to the white paper, hurdles for biosimilars that contribute to lost savings include the use of so-called “rebate traps” by reference product sponsors, which can force health plans to effectively exclude biosimilars by providing a financial incentive to continue to use the brand-name product. Medicare Part B reimbursement policies, too, fail to encourage biosimilars, given that the Part B program pays providers the same add-on for biosimilars as for reference products. According to the Biosimilars Council, this fact means that providers have no incentive to use a lower-cost biosimilar versus a reference drug.

Despite the fact that patients could pay less out-of-pocket for biosimilars than for brand-name drugs, patients rarely receive communication from their providers about the potential cost benefits of seeking out a biosimilar, argues the paper, and misinformation disseminated by reference product sponsors sows doubt among patients about the safety and efficacy of these drugs.

As solutions to these problems, the Biosimilars Council proposes that Medicare Part D be improved to ensure that biosimilars are subject to lower cost-sharing. Automatic coverage of biosimilars on Part D formulary tiers immediately after launch, placement of biosimilars on separate formulary tiers to lower patient cost sharing, and provision of specialty tiers for biosimilars above the CMS specialty threshold would all help to achieve this goal, according to the paper.

In Part B, waiving cost sharing for patients when a biosimilar is administered and implementing a shared-savings model for biosimilars (in which providers and the Part B program share in savings when a lower-cost biosimilar is used) would both be beneficial, says the council.

The proposals in the paper that relate to Part B echo those included in a letter sent to HHS Secretary Alex Azar earlier this month. In that letter, more than 20 groups representing patients, employers, and others asked HHS to end cost sharing for biosimilars in Part B.