Why Are Companies Launching Biosimilars With 2 Prices? Julie Reed Explains

Opinion
Video

Why are companies pricing their adalimumab biosimilars with 2 prices? Can the United States expect more of this pricing strategy for future biosimilar launches? Julie Reed, executive director of the Biosimilars Forum, has the answers.

Julie Reed, executive director of the Biosimilars Forum, explains the thought process behind launching adalimumab biosimilars at 2 wholesale acquisition costs (WACs), whether this pricing strategy actually helps patients, and if the United States will see it permeate into other markets.

Transcript

Several of the companies that launched adalimumab biosimilars in 2023 chose to use a dual-pricing strategy, where the biosimilar was priced at 5% and 55% lower than the originator Humira. Why did these companies chose to do this and do you expect a similar strategy to be used for future launches in other highly-competitive markets?

Unfortunately, yes. And we saw that with the Biocon Semglee [insulin glargine biosimilar] as well—they were forced to do that. Why they are being asked to do that is the product that only has the 5% discount, is a high WAC and highly rebated. So, they would—and I think most biosimilar manufacturers would—prefer to launch with the big discount. To get access to a formulary and access to the market, they're being required to put a high rebate on. And so the patient's out-of-pocket cost on a high rebate product are going to be based off of a 5% discount, not a 45% or 55% discount. That's not fair to the patients.

I think another piece, which is a concern—and we saw this before early in the biosimilars marketplace—we continue to see that the reference product, the brand is on the formulary at something called parity so everybody's equal. Well, biosimilars require incentives; there's a reluctance. [Patients think], "Well, if I think continue on my brand, why change?" And really, if it's a high rebated product, there's no incentive for the patient because they're out-of-pocket costs because of the rebate are not going to be lower. So I think that's key.

Also a concern is that we're seeing something called a step through on the PBM [pharmacy benefit manager] formularies, where a patient would have to step through the [reference product] before they could get the biosimilar. It's also called fail first. Well, I sat next to [Sarah Yim, MD, director of the FDA’s Office of Therapeutic and Biologics and Biosimilars]—I think most know she's a board-certified adult rheumatologist—and from a physician standpoint, if you fail on the [reference product], the physician is not going to prescribe you the biosimilar. It's unethical. They are the same drug.

So why would any PBM put a step through on the reference to the biosimilar? It's medically unethical, so why? Because they want to limit the access to the biosimilar. This is something I think Congress needs to look into, the Federal Trade Commission needs to look into. [This is] not the right thing to do, and it's of grave concern.

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