Policy decisions will affect how much biosimilars improve patient access to advanced treatments.
The IMS Institute for Healthcare Informatics just released new research projecting the potential impact of emerging biosimilars on pharmaceutical markets in the United States and Europe.
Sales of blockbuster original biologic agents now total $50 billion annually. By 2020, the IMS report said that biologics will account for 28% of the pharmaceutical market share, projected to exceed $390 billion annually.
That market share is staggering, and so are prescription prices. The annual cost of a specialty biologic regimen can reach 5-6 figures in US dollars.
As patents expire and alternatives come to market, the report said, competition should make biologic-based therapies more affordable and accessible for patients, improving health outcomes.
Biosimilars are therapeutically equivalent products created to offer a lower-cost alternative to expensive originator biologics. An active pipeline of 56 new biosimilar products in clinical development are expected to save as much as $110 billion in healthcare spending in the United States and Europe through 2020, according to the report.
The IMS Institute estimated that 30% can be saved on the price of treatment per day using biosimilars, depending on how open each national market is to competition.
Already, international evidence suggests that the introduction of biosimilars has a positive influence on the uptake of biologic treatments. The IMS Institute said this can be seen in the European Union (EU), where erythropoietins (EPOs), granulocyte-colony stimulating factors (G-CSFs), and human growth hormone (HGH) all are used more prevalently than before, partly because of new biosimilar alternatives and also because of expanded indications.
Likewise, in markets such as Romania, Bulgaria, and the Czech Republic, use of EPOs rose more than 250% with the introduction of biosimilars. The IMS Institute attributed this effect to lower cost and, by extension, to revised treatment guidelines reflecting better cost-effectiveness.
Eight of the 10 top selling biologic drugs losing exclusivity protection between 2015 and 2020 have a combined value of EUR42.3 billion in EU and US markets. Without biosimilar competition, their total annual spending would reach EUR47 billion (EU+US) by 2020, according to the report.
Biosimilar alternatives will create opportunity to cut that spending by a total of EUR49 billion to EUR98 billion (EU+US) over the next 5 years.
For payers, the report predicted these 8 key biologics will be a significant target for price reduction. In order of total spend, from greatest to least, they are:
In the near-term, the report identified 2 therapy areas that should benefit most from biosimilar competition.
With 30 companies now developing biosimilar versions of 16 distinct molecules, the majority will be alternatives for infliximab, etanercept, rituximab, and adalimumab, according to the IMS Institute.
The IMS Institute said that policy and implementation differences from 1 country to the next will determine the extent that biosimilars will be able to reduce spending and expand patient access to treatment in each national market.
The two most important competitive factors identified in their report were (1) motivating manufacturers to invest in biosimilars over the long term, and (2) keeping doctors at the heart of the decision making process.
Of course pricing will be an important competitive factor, too, but the report warned that a myopic focus on price alone would likely discourage manufacturers from competing in the long term. Austria was cited as an example of this approach and its effects. By mandating price reductions on biosimilar medicines, Austria stands to lose suppliers and reduce therapeutic options available to its citizens.
Rather, payers can adopt strategies to (1) educate and encourage physicians to prescribe biosimilars, (2) provide clinical evidence to support prescribing biosimilars, and (3) motivate manufacturers to participate in the market.
Germany is a leading example of how this is being done effectively, according to the IMS Institute. German statutory health insurers and physician associations have been proactively educating doctors to build trust in biosimilar medications and their savings potential. This education, paired with a prescribing quota, seems to be improving uptake and creating conditions favorable for more biosimilar competition.