Sometimes the reference product exhibits pricing resistance against the competitive effect of biosimilars, according to a Pharmaceutical Strategies Group report.
The 17 biosimilars on the US market have influenced pricing in diverse ways. The expectation is that biosimilars can prompt reductions in costs of the originator products they are based on, but that is not always the case, according to a report on specialty drugs from Pharmaceutical Strategies Group (PSG), a Plano, Texas-based pharmacy consulting company.
In some cases, biosimilar product costs have significantly decreased while reference product costs have remained static, the report noted. And some have described the US biosimilar market as underdeveloped.
However, the increase in biosimilar competition provides a “ray of hope” that these lower cost replicas of originator drugs can lower the general outlay for specialty drugs, authors of the report said. “Biosimilar drugs coming to the market continue to have an impact on overall spend on specialty drugs.”
A decade ago, just 1% of the population was using specialty drugs, whereas 4% of the population was using them in 2019, up 10.3% from the previous year. This reflects both increasing use by prior specialty drug users and new patients being prescribed specialty drugs. Further, the cost per specialty drug claim increased 3.3% from 2018 to 2019, according to the report.
Biosimilar Success Story
The report’s most prominent example of how biosimilar competition in the United States has contributed to price decreases is the case of the infliximab reference product Remicade vs the biosimilars Inflectra and Renflexis.
When Inflectra came to the market in June 2017, it entered at an average sales price (ASP) unit cost that was 8% less than the reference product and continued to decrease throughout 2018 to 20% below the reference product cost.
Prior to biosimilar competition, the reference product consistently inflated in price by 4% annually. After Inflectra was introduced, Remicade decreased by 3% during 2018, bringing its cost back down to where it was in 2016, according to the report.
In January 2019, Renflexis entered the market, triggering further price declines. After exceeding $80 per ASP unit price in 2017, prior to the arrival of biosimilars, the cost of Remicade stood at $53 by early 2020, down 35% overall.
Similarly, Inflectra entered the market just below $60 per ASP unit in early 2019 and dropped to around $47 by early 2020. Renflexis, which started around $76, had dropped to just above the $45 level.
In regard to the prices of other specialty drugs, “early indications show they are trending similarly to Remicade and its biosimilars, resulting in mitigation of price increases on brand products and leading to decreases in ASP rates for all products,” wrote the authors.
Originator Prices Hold Steady
Examples of static reference prices despite biosimilar competition can be seen in the pegfilgrastim market.
Steady price increases had reference product Neulasta reaching almost the $4500 ASP unit cost level in 2018. Biosimilar product entry did succeed in lowering the cost of the reference product; however, Amgen’s launch of the OnPro follow-on product, which allows home-based injections of pegfilgrastim, may have prevented deeper price declines in Neulasta and its 2 US-launched biosimilars, Fulphila and Udenyca. “Currently, these biosimilars have an ASP unit cost 7% less than Neulasta,” the authors noted. OnPro currently has 60% of the pegfilgrastim market.
The price effect biosimilars have had on the cost of trastuzumab reference product (Herceptin) has been only modest. The unit cost of Herceptin had climbed from below $90 to more than $100 by early 2019. Later that year, the Kanjinti biosimilar entered the market at just over $85 unit cost, 15% lower than Herceptin. “Herceptin pricing has remained flat during 2019 [with a slight decrease during 2020], while Kanjinti continues to decrease in 2020, experiencing over an $8 decrease in unit cost [in the first half of the year],” the authors wrote.
In the case of bevacizumab originator Avastin, ASP unit prices of this agent climbed from below $70 in 2017 to roughly $77 in early 2019. Despite the introduction of the Mvasi biosimilar in 2019, the reverence product cost dipped slightly but remained above $75. By contrast, Mvasi entered the market at a unit cost of over $65 and has dropped sharply in 2020, “experiencing a $7 decrease in unit cost” during the first half of 2020.
The report stated that Humira (adalimumab), Stelara (ustekinumab), Remicade, and Enbrel (etanercept) ranked at the top among specialty drugs in terms of costs per health plan member, according to 2018 data. Stelara moved from the number 4 position in 2018 to number 2 in 2019 because of a 29.2% increase in patient use. There are biosimilars on the market or lined up for market entry for each of these drugs.
Pharmaceutical Strategies Group. State of specialty: spend and trend report. PSG website. October 2020. Accessed October 9 2020. https://www.psgconsults.com/specialtyreport.