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PRI Estimates Potential Biosimilar Savings in Freer Market Environment


The conservative think tank Pacific Research Institute (PRI) calculated potential biosimilar savings across multiple market share scenarios.

A study from a free market–focused think tank argues for the elimination of market barriers to biosimilars to tap potentially billions of dollars in health care system savings that biosimilars for 2 widely used drugs could provide.

The study from the Pacific Research Institute (PRI) in California analyzed the potential impact of biosimilars for AbbVie’s adalimumab (Humira), the top-selling drug in the United States, and Amgen’s etanercept (Enbrel). Both therapies treat rheumatoid arthritis and other autoimmune conditions.

Annual systemic savings could total up to $5.8 billion, with $4.7 billion resulting from biosimilars for Humira and $1.1 billion from drugs that are interchangeable with Enbrel, said Wayne Winegarden, PhD, director of PRI’s Center for Medical Economics and Innovation and the study’s author.

“These calculations emphasize the importance of promoting an environment that empowers competition once the originator’s exclusivity period has expired. These reforms include eliminating barriers such as rebate walls and promoting positive reforms such as favorable formulary tiers for biosimilars,” Winegarden wrote.

The estimate is based on the maximum savings possible if new biosimilars for the 2 drugs were to achieve a 75% market share. The total savings would reach up to $3.9 billion at 50% market share, and between $1.3 billion and $1.9 billion at 25% market share.

Neither drug currently faces competition from biosimilars. Amgen has said it plans to begin marketing adalimumab (Amjevita), the European Union’s best-selling adalimumab biosimilar, in the United States in 2023. A commercial license for Boehringer Ingelheim’s adalimumab (Cyltezo) will begin in 2023, according to the company.

The FDA has approved 2 Enbrel biosimilars, Sandoz’s etanercept (Erelzi) and Samsung Bioepis’ etanercept (Eticovo), neither of which is available in the United States due to patent issues.

AbbVie’s Humira generated $16.11 billion in gross revenues and Amgen’s Enbrel earned $4.86 billion in 2020, according to the PRI study.

Wayne Winegarden, PhD

To the extent that the net prices of Humira and Enbrel increase before the introduction of competition, then the potential savings enabled by biosimilar competition would increase.

However, after considering rebates, fees, and discounts that the manufacturers pay, and projecting the change in sales from last year, Winegarden projected that the health care system will spend $10.3 billion on Humira and $2.5 billion on Enbrel doses in 2021.

The study used 3 scenarios for drug price discounts—40%, 50%, and 60%—that could occur if biosimilars for the drugs were available, and modeled the resulting ranges of systemic savings at different levels of market share gain.

Breaking the figures down by payer, commercial payers could save up to $2.9 billion for Humira and $707 million for Enbrel, state Medicaid programs could save up to $875 million and $214 million, respectively, and federal expenditures on Medicare and military insurance could decrease by up to $726 million and $175 million, respectively, the study estimated.

Payers in every state would benefit. The states with the highest projected savings are Florida, which would see spending reductions of $77 million to $347 million depending on the discount rate scenario and level of market share gain, and Pennsylvania, where the savings could fall between $78 million and $349 million.

“These calculations demonstrate that an environment that successfully fosters biosimilar competition in just these 2 biologic drug classes will generate significant systemic savings that will meaningfully improve the current drug affordability landscape,” Winegarden wrote.

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