Remove the Disincentives and Biosimilars Will Flourish, Policy Expert Says

July 7, 2020

Wayne Winegarden, PhD, director of the Center for Medical Economics and Innovation, explains that misaligned incentives are preventing the United States from realizing full benefit from biosimilars.

Patients could save as much as 17% on out-of-pocket costs if they used biosimilars, but many obstacles make that difficult to achieve, noted Wayne Winegarden, PhD, director of the Center for Medical Economics and Innovation at the Pacific Research Institute, a conservative policy analysis group in California.

He believes that legislators have a lot of work to do to pull out the blocks and wedges that prevent full realization of biosimilar savings.

“Since biologic medicines are some of the most expensive drugs that are driving the affordability problem in the United States, biosimilar competition can meaningfully reduce these cost pressures and improve overall affordability,” he said in a recent interview with Managed Healthcare Executive®.

Market dynamics are differnent in Europe, where biosimilar discounts are 20% to 40% lower than in the United States, Winegarden said. That’s a lofty goal to aim for.

The IQVIA Institute for Human Data Science recently developed a scorecard for biosimilar access achievement in the European Union. It showed which countries are ahead in getting biosimilars to patients and why. The country-by-country breakdown rated countries' biosimilar markets on sustainability, the degree to which drug prices have fallen since the introduction of biosimilars, the health of biosimilar competition, and potential for growth. Norway and Sweden and the United Kingdom were among the leading countries for biosimilar adoption, though none of these markets was perfect, according to the analysis. Poland was among the laggers, in part because it takes a year or longer before an approved biosimilar reaches market in that country.

"A lot of my recent research has been looking at biosimilars and specifically trying to quantify the amount of savings that are available, because we haven't had the market develop here the way you have seen biosimilars develop in Europe, nor the same way that you've seen generics developed to become 90% of market here," Winegarden told The Center for Biosimilars® recently.

The biosimilar savings available to Medicare could reach $6.2 billion to $10.5 billion based on Winegarden’s calculation of biosimilars representing 25% to 75% of prescriptions for 9 drug classes for which biosimilars have been approved. “Greater savings can be had if biosimilars reach a higher share and biosimilars are introduced in more drug classes,” he said.

One way to achieve this is to change the incentives that in some cases discourage the use of biosimilars. One thing that tends to happen is that formularies list the more expensive originator biologics as the preferred drug, and so patients must fail on these medications before lower-cost biosimilars can be employed.

He suggested, as a solution, the creation of a formulary tier specifically for lower-cost biosimilars with lower co-pays and coinsurance rates.

Under the current system, providers can actually lose money by prescribing the lower-cost drug, and this is a disincentive that needs to be remedied, Winegarden said. “Removing the disincentives discouraging the development of a healthy biosimilars market is essential for making this happen.”

For more from this interview with Winegarden, visit managedhealthcare.com.


x