How Will the Emergence of Biosimilars Impact the Marketplace?

Many factors pave the way for biosimilars to gain US market share, but to some extent, the road will be uphill, according to a study published in The American Journal of Managed Care.

Specialty drugs, including biologics, account for a large and growing share of the pharmaceutical market. In fact, biologics are now the primary driver of rising drug costs in the United States. This is due to both a greater volume of prescriptions (up 32% from 2009 to 2012 under Medicare Part D) and higher prices (up 45% in the same sample), according to the study.

Eight biologic agents are expected to reach the US top 10 list of highest selling drugs in 2016. Around the same time, many of these drugs are expected to go off patent (more than 70% of biologic spending is already off patent).

These trends, plus the comparatively lower cost of biosimilar drugs created to mimic the safety and efficacy of reference biologics, create an opportunity for biosimilars to gain market share in the United States, having already gained a foothold in European markets, Japan, and South Korea, the study found.

Globally, biosimilar sales increased 7900% from 2007 to 2014. Although the United States lags behind, it is predicted to become the world’s largest market for biosimilars, with several biosimilar drugs entering the market over the next 5 years.

Potential Cost Savings

Payers have a significant financial incentive to consider biosimilars as an alternative to biologics. The Congressional Budget Office estimates that the Biologics Price Competition and Innovation Act of 2009 (BPCI, an FDA pathway for biosimilar licenses) will lead to a total cost reduction of $25 billion from 2009 to 2018. For the US government, cost savings are estimated at $5.9 billion.

The Challenge

Biosimilar drugs are biologic, large molecule compounds that are highly similar, but not identical, to their branded reference biologics. This is an important distinction between biosimilar and generic small molecule drugs.

The uphill battle for biosimilars, compared with generics, is that they draw greater scrutiny from regulators, insurers, prescribers, and patients. This scrutiny must translate into significant research, education, and marketing efforts in the United States. Unlike a generic drug, a biosimilar drug will be required by the BPCI to prove itself highly similar to the reference product. It must also undergo animal studies assessing toxicity and at least 1 clinical study assessing its safety, purity, and potency.

When offered the choice of a biosimilar, physicians express a reluctance to switch a patient who is already tolerating and responding well to a known biologic, according to the study.

Drivers to Market

The report explored all the contributing factors and associated costs that will determine how quickly and to what extent biosimilar drugs will be able to penetrate the US market. These factors include:

• Cost of clinical development and manufacturing
• Competition from first-, second- and next-generation biologics and biobetters (biosuperiors)
• Physician / patient uptake
• Plan designs, manufacturer rebate incentives, and inclusion or exclusion from formularies
• FDA guidance
• Interchangeability designation
• Reimbursement models, pricing incentives, and provider profitability