Report: Biosimilars Will Play Increasingly Important Role in US Biologic Market

Biologic drugs play a key role in the US healthcare market, as they are often the standard of care for treating complex diseases, many of which require long-term treatment. With the FDA’s approval of biosimilars of several important biologic treatments, and with a significant pipeline of biosimilars still in development, it is expected that many biosimilars will be introduced to the US market in the next several years.

As new biosimilars are approved, and as patients, healthcare providers, and payers benefit from the additional therapeutic options they provide, biosimilars will play an increasingly important role, according to a recent assessment published by the Healthcare Distribution Alliance (HAD) Research Foundation. The report, “The State of the US Biosimilar Market,” draws on a series of interviews with senior stakeholders at specialty distributors and pharmaceutical manufacturers, as well as on secondary research, to describe the current state of the market and to provide perspective on the unique challenges of bringing biosimilars to marketplace.

Since the FDA’s first biosimilar approval in January 2015—Sandoz’s Zarxio, a biosimilar of Amgen’s reference filgrastim Neupogen—the FDA has approved 8 additional biosimilars. Three have launched: Zarxio, Inflectra, and Renflexis (the latter 2 both biosimilars of Remicade).

The analysis discusses the marketing of these 3 biosimilars, the highlights of which include:

• By the end of 2016, Zarxio had approximately a 15% share of the US filgrastim market, a share that is expected to expand in 2017 due to increased uptake of the product and price erosion of Neupogen. Zarxio was launched with provider and patient support programs to foster stakeholder education and provide easier access to the drug through comprehensive reimbursement support services. It is available through both specialty and traditional full-line distributors.
• Inflectra and Renflexis were launched in specialty and traditional full-line distribution channels. Pfizer launched Inflectra at a 15% markdown to Remicade, and Samsung—Merck launched Renflexis at a 35% markdown to Remicade. Both biosimilars were launched with patient and provider support programs designed to match those of the originator drug.

The Biosimilar Pipeline

As of March 2017, there were 66 biosimilar development programs in the FDA’s Biosimilar Drug Development Program. By 2019, 6 of the top 10 US biologic drugs will lose patent exclusivity—including Avastin, Humira, Neulasta, Remicade, and Rituxan, which have a combined market value of $32.2 billion, making them and other biologics attractive targets for biosimilar development.

Challenges

There are unique challenges facing biosimilar products that are approved and launched, according to interviews with senior executives at pharmaceutical manufacturers and distributors. The US biosimilar market has been slower to develop than that of many other developed countries because of a slower pace of a supporting regulatory framework. “Manufacturer, distributor, and payer strategies for managing biosimilars are evolving while providers and patients slowly begin to understand what biosimilars are, and how they fit into their healthcare options,” the analysis states. Challenges include the following:

• Provider awareness, knowledge, and acceptance of biosimilars. Education of healthcare providers about biosimilars must start as early as possible to establish a foundational understanding. After establishing an understanding of biosimilars in general, a shift can be made to specific branded education and marketing.
• Provider and patient support services are a baseline requirement for any biosimilar market entrant. Services must be matched to those offered by the originator drug’s manufacturer. Greater demand uncertainty is to be expected, and additional provider calls into customer care should be anticipated. To compete, biosimilar manufacturers must mirror the supply chain strategy of the reference drug.
• Supply chain services and strategies must be similar to those of the reference drug. Biosimilar manufacturers must mirror the supply chain channel strategy of the reference drug because provider customers will want to purchase biosimilars from the same channel as the reference drug.
• Interchangeability concerns. Because biosimilar drugs are not directly interchangeable with reference drugs, substitution is more complex. This also potentially creates price volatility as multiple biosimilar drugs are launched for the same reference drug. Although reimbursement strategy may produce a cost savings to the healthcare system, some margin of stability and certainty will be needed to create a sustainable market that makes biosimilar investment worthwhile.

Conclusion

The pace of biosimilar adoption in the United States is dependent upon the actions of many different industry stakeholders, including payers, providers, and manufacturers, but the analysis predicts that biosimilars in the pipeline will be launched more regularly in the coming years as the biosimilar drugs now in development are approved. Payers are likely to encourage a transition to biosimilars, as they expect them to provide cost savings over branded biologics. As biosimilar pricing evolves, and as additional biosimilars are launched for the same reference drugs, prices may fall further, resulting in savings to patients and the healthcare system as a whole. However, pricing at launch and corresponding savings to the healthcare system will continue to depend on the price of reference drugs, and this price often increases in the years leading up to the loss of exclusivity.