Biosimilar pricing is not as simple as a manufacturer's stated discount to the reference product cost, according to Adam Brufsky, MD, PhD, FACP, of the University of Pittsburgh Medical Center (UPMC) in Pennsylvania.
From the perspective of a practitioner, what determines biosimilar access is more complicated than price or the number of biosimilars on the market. Payment channels and institutional policies to a large degree determine the biosimilar armamentarium, according to Adam Brufsky, MD, PhD, FACP, of the University of Pittsburgh Medical Center (UPMC) in Pennsylvania.
“What happens in a large health system, especially one such as UPMC that spans the state of Pennsylvania, is that every local area has a slightly different payer mix, with a slightly different drug reimbursement schedule, and slightly different contracting with the various suppliers,” said Brufsky, who is a professor of medicine and associate division chief for the Division of Hematology and Oncology at UPMC.
A manufacturer might introduce a biosimilar on market with the statement that it will be priced at 15% less than the reference product, but when this discount is filtered through all of the other factors that influence cost, it becomes very difficult to know on a broad scale what the medical system is really paying for biosimilars, Brufsky said.
Clearer on the Surface
“It’s very, very complicated. It’s not as simple as just saying, “Oh, the biosimilar is 20% to 30% less than the originator,” he said.
Brufsky admits that finding this out was an eye-opener for him. “It’s a very complicated process for the pharmacy, the pharmacy and therapeutics committee, and the financial team to figure out exactly what the benefits of a biosimilar are financially. It really depends on a lot of factors that you ordinarily wouldn’t have thought of.”
This doesn’t mean that you can’t save money with biosimilars. Brufsky notes that saving money is the whole point. Biosimilars have no clinically meaningful difference from their reference biologics, according to the FDA, except that they are generally introduced to market at a discount from originator drugs. The problem is, it isn’t easy to model the difference that biosimilars are going to make to the bottom line.
“I think biosimilars are going to save us all money, but on the other hand, we just don’t know what that number is going to be at the end of the day. I think it’s going to be different depending on who you are and where you practice. I think they definitely will improve access for a lot of patients who ordinarily wouldn’t have been able to get these agents because of expense. We just have to be very careful as a medical community in understanding the exact cost savings we’re getting,” Brufsky said.
The general haziness of the financial picture is illustrated by the wide number of trastuzumab biosimilars now available on the US market. There are 5 of them, the highest number of biosimilars in the United States for any reference product, and yet owing to manufacturer decisions, wholesaler supply, formulary placement, and hospital drug selection processes, a limited number of these will be available in any particular market, thereby limiting the competitive pressure on manufacturers to lower their prices.
The real price of a biosimilar is going to depend on local availability, Brufsky notes. “There’s not going to be a one-size-fits-all concept. Payers and health systems are going to choose the biosimilars that make the best sense for them, whether it’s based on cost or reliability of supply or a review of the evidence supporting that drug.
“The nice thing about biosimilars is that we know, from the FDA, that they are similar in activity to the reference product. You’re going to have to choose the biosimilar that works best for your particular situation. You’re going to get a cost savings, but I think it really is going to depend on the individual area,” Brufsky said.
Reference Products Sometimes Have the Edge
In some cases, however, providers will have to use the reference products. It is not possible, for example, to make a full transition to biosimilar pegfilgrastim because there are advantages to Onpro that some patients can’t do without. It’s not in the biological formulation but in the convenience of the applicator, Brufsky notes.
Some patients travel long distances and don’t have the luxury of staying in town for the follow-up injection of Udenyca, which has to be delivered in a clinic, and it’s not always possible to arrange for administration in a satellite clinic. Onpro solves that problem, he said. “There will always be people who will be on Onpro because they come from a long distance. They come from rural Pennsylvania and they don’t have anybody near them to give them the Udenyca injection the next day, and so for that reason you’re never going to get to 100%.”
Therefore, looking for perfection on the cost side can be shortsighted, Brufsky noted. “The perfect is the enemy of the good. It should be OK to be satisfied with 80% or 85% and not drive everybody toward a 100% conversion. Hopefully, you adopt enough of the biosimilar that you can see cost savings. That’s the hope, and again, it’s a very complicated matter.”
The goal for many in the health-care system is to figure out what the biosimilar threshold is that represents the perfect balance of cost savings and convenience, he said.