Decades ago, I remember when biosimilars were a light on the horizon. Visions of sharply discounted alternatives to reference brands that could swoop in and help patients receive the care they needed at prices that were at least 50% below current market rates. These drugs were anticipated to be easy substitutes that would take over the market.
Forecasters now predict that the biosimilars market may reach $36 billion by 2026.1 The current market focuses on monoclonal antibodies, filgrastim (Neupogen) and pegfilgrastim (Neulasta), along with a few other agents. These biosimilars fall into several categories, including supportive care, oncology, long-acting and rapid-acting insulins, ophthalmology, and tumor necrosis factor blockers.1 One would think that the future was bright now that biosimilars have gained a foothold in US markets. However, there are still challenges ahead.
Biosimilars Remain a Tough Sell
The US Food and Drug Administration (FDA) offers comprehensive biosimilars guidance on its website and each biosimilar manufacturer also engages in education and awareness initiatives. Furthermore, clinical and real-world data continue to emerge regarding the use and uptake of these agents in various disease and treatment settings. Yet, there is a constant refrain regarding the need to better educate providers, patients, and payers about the development of biosimilars and the various advantages associated with their utilization. One would think that by this time, the actual experience of using biosimilars would have created a groundswell of consensus so that education would not be described as an “under-met need.” Unfortunately, there are many elements that continue to complicate the situation.
Issues Regarding Interchangeability
One market challenge involves the status of the concept of “interchangeability” between biosimilars and their reference product. On the one hand, there is the argument that biosimilars are vigorously reviewed by the FDA before being granted market approval. Thus, we should have confidence that these agents are approved using the same quality standards applied to every other biologic, and that the FDA approval should reflect confidence that biosimilars will perform clinically in the same manner as their reference product.
On the other hand, interchangeability is a legal definition under section 351(k) of the US Public Health Service Act (PHS Act) rather than a clinical distinction.2 State laws individually govern how substitution of medicines by someone other than the prescribing physician may be allowed. Physicians may choose, under their medical license, to prescribe a reference product or a biosimilar as a clinical decision. The legal concept of interchangeability applies to the dispensing of medicines. The PHS Act may set forth that a product receiving an FDA designation of “interchangeable” can “be substituted for a reference product without the involvement of the prescriber,” but in practice, individual state laws may prohibit pharmacists from substituting any drugs unless they notify the prescriber.3 Prescribers still have the right in every state to note “dispense as prescribed” on the prescription, or to reject a pharmacist’s request to make a substitution. This conflict can cloud the uptake of biosimilars.
If prescribing physicians and pharmacists are not of the same mindset regarding biosimilar utilization, the patient can be caught in the middle, wondering “what is this drug?” If patients feel that they have been given a drug that was not ordered by their physician, they may become concerned about the product, which can lead to higher incidences of switching back off the dispensed biosimilar.4
There remains a wide range of comfort levels among physicians regarding the use of biosimilars, for a variety of reasons. Some physicians prefer a reference product due to their training or prior experience with it, or they may just not see a compelling reason to switch to a biosimilar. Others have started using biosimilars as a value-based care choice, feeling pressure from cost capitation or other containment models. Ultimately, physician preference is, and will continue to be, the driver.
External Entities and Multiple Products Adversely Affect Uptake
Third-party intermediaries have their own reasons for pressuring the market one way or another. Specialty pharmacies or pharmacy benefit managers often insert themselves between the physician and the patient when it comes to drug approval, dispensing, or delivery. These entities are more likely to have the viewpoint that biosimilars are interchangeable with their reference products, and will set formulary policies showing preference for 1 or more biosimilars over reference products. If there are multiple biosimilars for a particular reference product, this can become problematic for providers and patients. Providers may choose to only use and stock 1 individual biosimilar for inventory management and quality control reasons. If other entities require a different biosimilar (when multiple options are on the market), this may raise prescriber inventory and patient management practice issues, including delays in accessing products. If rebates to the third-party intermediary drive the choice of a product that is not compatible to a prescriber’s clinical preferences, this can cause unnecessary barriers, conflict, and delays for patients and their treatment. All of these challenges can affect the biosimilar market in an adverse manner.
The Inflation Reduction Act Could Dampen Biosimilar Development
Congressional bills are notorious for packing a myriad of details in those hundreds of pages that have not been considered properly for unintended consequences. The Inflation Reduction Act of 2022, signed into law by President Biden on August 16, 2022, is no exception. Buried inside its 700+ pages are novel circumstances governing biosimilar launches. Section 1102 of the Inflation Reduction Act contains a “Special Rule to Delay Selection and Negotiation of Biologics for Biosimilar Entry.” This rule could delay a biologic drug’s negotiation process with the Centers for Medicare & Medicaid Services (CMS) for up to 2 years if a biosimilar for that drug is highly likely to be licensed within that same 2 years. Although the advantage is to the biologic drug for staying out of CMS’ drug price negotiation, it is the manufacturer of the imminent biosimilar that must request the delay.5
While the devil is in the details, this rule, if left standing, could affect the biosimilar market in several ways. Biologics manufacturers could launch their own noninterchangeable biosimilars to deter others from creating them or they could initiate negotiations as early as possible with CMS to deter other manufacturers from developing biosimilars against their biologic as a reference product. The fact that CMS is planning to start price negotiations for the most expensive, negotiation-eligible drugs and thus transform the drug pricing market is enough to create significant potential disruption to future biosimilar launches and general market competition.5
What Might the Future Hold for Biosimilars?
There are many variables still at play. Who is making the treatment decision? Who is making the drug decision? What changes may happen in the market to affect the biosimilar industry and growth? Some biosimilars are created and approved but never brought to market, so mere existence in the pipeline does not necessarily mean that a product will be manufactured or sold. Multiple biosimilars can make for a crowded market and even if there is heavy price competition, this may not be enough to grab attention and market shares.
The growing battle between physicians and pharmacists over who should be the ultimate decision maker for which drugs to use is a turf war, and will not likely benefit patients. While approvals and denials are in play, patients are on the sidelines, waiting for their treatments. Employers are entering the fray as well, with the prodding of external entities promising significant savings if the employer puts management of their pharmacy and medical benefit into their hands.
Patients never benefit when physicians and pharmacists are at odds over treatments, especially if pharmacists are part of third-party intermediaries seeking to enter the care stream and take their cut as a middleman, causing delays in access to care and distressing patients about drug choices. This type of battle will not serve the biosimilars market well.
I am actually surprised that there remains an uphill education battle. My marketing training radar is looking at this and saying, “If the product cannot show its own value once it is being used in a market, how much more will education help? What is the purpose of the education? Is the information being shared actually considered useful by the targets?”
Having said that, it has been interesting to watch the participating oncology practices in the CMS’ Oncology Care Model discuss the impact of biosimilar utilization on their success in the program. Perhaps the driver is that there was another externally driven, compelling reason to look at using biosimilars that had more relevance to the practice than just the argument that biosimilars are possible and approved by the FDA?
Biosimilars, like any new treatment option, hold promise. They have entered into a market that is under increasing scrutiny regarding the cost of drugs. This scrutiny will result in opportunities for biosimilars, but it may also lead to increased complications (eg, CMS’ foray into price negotiations) and downstream consequences for biologics and biosimilars alike. The success of biosimilars will be affected by the perspectives of providers and others, which may be in conflict. This conflict can cause distress for patients, who may then waver in their acceptance or rejection of biosimilars as a market entry.
Despite significant growth in the US market, the future role of biosimilars is difficult to predict. The road ahead has many twists and turns. It will be interesting to watch. I welcome your comments—you may reach me at
References
- PR Newswire. US biosimilar market report 2022: rising prevalence of cancer & increasing health expenditure fueling growth. July 22, 2022. www.prnewswire.com/news-releases/us-biosimilar-market-report-2022-rising-prevalence-of-cancer--increasing-health-expenditure-fueling-growth-301591723.html. Accessed September 15, 2022.
- Public Health Service Act, 42 USC §262 (2020).
- US Food and Drug Administration. Biosimilar and interchangeable products. Updated October 23, 2017. www.fda.gov/drugs/biosimilars/biosimilar-and-interchangeable-products. Accessed September 15, 2022.
- Woollett G, Park J. Contributor: interchangeability is a dispensing issue, not a prescribing one. September 15, 2022. www.centerforbiosimilars.com/view/contributor-interchangeability-is-a-dispensing-issue-not-a-prescribing-one. Accessed September 22, 2022.
- Fein AJ. The Inflation Reduction Act: three unintended consequences for biosimilars, health plans, providers, and pharmacies. September 13, 2022. www.drugchannels.net/2022/09/the-inflation-reduction-act-three.html. Accessed September 22, 2022.