Biologics are important therapies to treat complex conditions such as cancer, autoimmune disease, diabetes, and multiple sclerosis. However, they are also drivers of high pharmaceutical costs in the U.S. and prices are increasing. In 2015, biologics accounted for 38% of prescription drug spending (U.S. Food & Drug Administration, 2018) and in 2019 comprised 43% of total prescription drug spend with a total of $211 billion (IQVIA, 2020). In 2018, biologic spend was 125.5 billion with only 1.9 billion attributed to biosimilars (IQVIA Institute for Data Science, 2019). Biosimilars are biologics that are similar in efficacy and safety to the reference product, although they may have differences in inactive ingredients (U.S. Food & Drug Administration, 2018).

In 2010, the Biologics Price Competition and Innovation Act of 2009 was instituted to create an abbreviated licensure pathway for biologic drugs demonstrating to be biosimilar to an FDA-approved biological product. This pathway would help provide more treatment options, increase access to lifesaving medications, and potentially lower health care costs through competition. Since then, several biosimilars for widely used drugs in rheumatology, oncology, and hematology have been FDA approved. These include six biosimilars for Humira, which has 9 FDA indications, along with 3 off label uses in the compendium for autoimmune disease and is widely used (IBM Micromedex, n.d.). Two other biosimilars await FDA approval. Litigation has delayed launch of all Humira biosimilars in the U.S. until 2023 (Joachim, 2020). Others include trastuzumab, rituximab, bevacizumab and filgrastim for oncology, etanercept and infliximab for autoimmune diseases, and finally insulin glargine and insulin lispro for diabetes. There are many others in development; 24 biologics have biosimilars approved or in the pipeline (IQVIA, 2020). Despite payer drivers like cost savings to utilize biosimilars, they initially had poor uptake. Good news though: this trend may be changing (IQVIA, 2020).

Biologic stakeholders employed several strategies to maintain market share over biosimilars. These include patent litigation, price and rebate management, and formulary exclusivity. By 2019, of 17 FDA approved biosimilars, manufacturers could only bring seven to market because of patent litigation, including formation of “patent thickets” (Zhai, Sarpatwari, & Kesselheim, 2019). Competitors develop patent thickets by applying for multiple patents on a single drug. Pricing of biosimilars and rebates on the reference product also were misaligned (Zhai, Sarpatwari, & Kesselheim, 2019). Biosimilar pricing did not always meet expectations for lower costs, sometimes only with a 15% reduction in cost. Some manufacturers of reference products were able to offer higher rebates and effectively lower net costs to payers (Zhai, Sarpatwari, & Kesselheim, 2019). In addition, FFS Medicaid delayed uptake of biosimilars because of these rebate issues, while MCOs, which do not benefit from statutory Medicaid rebates, chose the less expensive product, in this case the biosimilar (Hernandez & Gellad, 2020). Finally, manufacturers tied rebates on other marketed medications to the reference product creating formulary exclusivity models, which inhibited placement of competitor biosimilars on payer formularies (Zhai, Sarpatwari, & Kesselheim, 2019).

Additionally, other barriers impact biosimilar uptake, including patient concerns and lack of prescriber adoption. Both physicians and patients may have lingering apprehension about the safety and efficacy of new biosimilars (Zhai, Sarpatwari, & Kesselheim, 2019). In addition, prescribers need to specify the biosimilar when prescribing, as pharmacies cannot substitute at point of sale as they do with generics. However, the addition of interchangeable biologics, or medications that have met additional regulatory requirements and allow for biosimilars to be substituted for a reference product without the intervention of a prescriber, may eliminate this hurdle (FDA, 2020). In fact, the FDA just approved the first interchangeable biologic, Semglee, on July 28. This allows substitution between two biologics from different manufacturers at the point of sale; the substitution does not need to be made by the provider (Woollett, 2021). This will reduce burden on prescribers as well as increase uptake of biosimilars.

While there have been challenges, acceptance is on an upwards trajectory and multiple avenues exist for improving biosimilar uptake. To increase use, Medicare Advantage plans are instituting step therapy through biosimilars for Part B drugs, which only became availably January 1, 2019 with approval from CMS (CMS, 2018). CMS has assigned a billing code to each biosimilar so that it is no longer grouped with the reference product for reimbursement purposes (Part B Biosimilar Biological Product Payment and Required Modifiers, 2018). In addition, CMS Innovation Center (CMMI) has put forth a “Part D Payment Modernization Model,” which could remove or cost sharing for biosimilars for low income subsidy (LIS) members (CMS, 2021). The FDA has instituted its Biosimilars Action Plan to streamline approvals and educate the public on safety and efficacy (Biosimilars Action Plan, 2018). Post-marketing studies demonstrating safety and efficacy will further advance adoption. Finally, payers and pharmaceutical companies can work to educate both providers and patients on the benefits of biosimilars as well as future cost savings. IQVIA projects savings to be $100 billion over the next 5 years as the number of biosimilars coming to market increases (IQVIA, 2020). Policy changes and education campaigns will hopefully bring this to projection to reality.

Biosimilar utilization is an effective drug use management tool. With any innovation, adoption takes time. More biosimilars will likely clear legal and approval hurdles in the future. In addition, physician comfort in prescribing will likely improve with increased market availability and completed post marketing studies. These factors will accelerate adoption of biosimilars in the future, and that benefits all managed care stakeholders.

References:

  1. Biosimilars action plan. US Food and Drug Administration. July 2018. Accessed July 2021. https://www.fda.gov/media/114574/download
  2. Medicare advantage prior authorization and step therapy for Part B drugs. CMS. August 7, 2018. Accessed July 2021. https://www.cms.gov/newsroom/fact-sheets/medicare-advantage-prior-authorization-and-step-therapy-part-b-drugs
  3. Part D payment modernization model calendar year (CY) 2022 fact sheet. January 19, 2021. Accessed July 2021. https://www.cms.gov/newsroom/fact-sheets/part-d-payment-modernization-model-calendar-year-cy-2022-fact-sheet
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  8. Medicine use and spending in the U.S.: a review of 2018 and outlook to 2023. IQVIA Institute for Data Science. May 2019. Accessed July 2021. https://www.iqvia.com/-/media/iqvia/pdfs/institute-reports/medicine-use-and-spending-in-the-us—a-review-of-2018-outlook-to-2023.pdf?_=1626900778283
  9. Joachim R. Weighing the potential of humira biosimilars in the U.S.—Competitive dynamics analysis. September 29, 2020. Accessed July 2021. https://www.biosimilardevelopment.com/doc/weighing-the-potential-of-humira-biosimilars-in-the-u-s-competitive-dynamics-analysis-0001
  10. Part B biosimilar biological product payment and required modifiers. February 2, 2018. Accessed July 2021. https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/Part-B-Biosimilar-Biological-Product-Payment
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  12. Zhai M, Sarpatwari A, Kesselheim A. Why are biosimilars not living up to their promise in the US? AMA J Ethics. 2019;21(8):e668-678.