Q&A: What Providers Need to Know About a Changing Biosimilar Market

In this Q&A from Advisory Board, IPD Analytics' experts discussed the in's and out's of the U.S. biosimilar market. The market is experiencing rapid growth. However, regulatory and legal challenges are stopping biologics from being launched post-approval. Companies are responding to these legal challenges with pricing strategies and related product launches.

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Biologics accounted for 38% of prescription drug spending in the United States in 2015 [1] and are often called the single largest driver of drug spending growth. So the introduction of biosimilars created a great deal of excitement, as they represent an opportunity to lower costs for both patients and payers. However, their entry to the market has been met with numerous challenges—even leading some to question their potential to meaningfully inflect prices.

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To better understand the biosimilar market and how providers should prepare for these new drug therapies, I sat down with Leslie Fish, PharmD and Jeff Casberg, RPh of IPD Analytics, a company that identifies, projects and quantifies changes in the biopharmaceutical landscape for manufacturers, payers, wholesalers, and providers among others. Health systems are increasingly making use of IPD's data and insights to reduce their drug spend, optimize formulary management and clinical policies, increase alignment with payers, and enhance their contracting and specialty pharmacy capabilities.

In part I of our conversation, we discuss how the biosimilar market is evolving and why providers need a biosimilar strategy. In part II, we cover how payers are responding and the implications for providers.

Question: What is the current state of the biosimilar market?

Leslie Fish: The biosimilar market in the United States is still fairly nascent, particularly compared to Europe, but it's growing rapidly as more and more manufacturers enter the space. As one might expect, manufacturers have focused their efforts on developing biosimilars of blockbuster therapies, such as Remicade (infliximab), Enbrel (etanercept), Humira (adalimumab), and Neulasta (pegfilgrastim) to maximize their market opportunity.

As of June 20, 2019, FDA has approved 20 biosimilar therapies, but only eight have actually launched. Bringing a biosimilar therapy to market is quite different from the well-worn generic pathways to which most organizations have grown accustomed. Regardless, this market is emerging quickly, and the time is right for provider organizations to develop a concerted strategy.

Potential Biosimilars (2021-2025):

Lucentis (ranibizumab)

Eylea (aflibercept)

Soliris (eculizumab)

Stelara (ustekinumab)

Erbitux (cetuximab)

…and more

The full data are avaliable on the IPD Analytics website.

Q: Why is there such a gap between what has been approved and what has been launched?

Fish: There's a good amount of complexity underlying that question, but it really boils down to regulatory and legal challenges, not clinical ones. To understand why, you need to focus on the patents associated with these biologic products.

These therapies aren't associated with a single patent, but rather several patents that span different attributes of the product (formulation, dosing, indication, etc.). AbbVie's Humira (adalimumab), for instance, has more than 100 patents. These patents are designed to create legal challenges for any biosimilar competitor who might want to enter the market, delaying their entry as court battles play out.

Moreover, each of these patents can be filed at a different time and thus have different expirations, an issue which is most important with indication patents. For example. Rituxan (rituximab) has an indication patent for rheumatoid arthritis that doesn't expire until 2023, but its oncology indications expire earlier. As a result, Rituxan biosimilars could launch with oncology approvals, but without an approval for RA, a difference that prompted regulators to create the "skinny label" designation.

In this scenario, you'd likely see uptake of biosimilars among oncologists, but not rheumatologists, even though it's an FDA-approved equivalent product and there are no strict barriers to utilization (outside of potential differences in payer coverage for off-label indications). From a health system perspective, education strategies must account for these meaningful differences to ensure awareness among prescribers regarding what biosimilars are truly available for their patients.

Q: How are brand manufacturers responding to this forthcoming biosimilar competition?

Jeff Casberg: We see brands responding in two major ways: by engaging in more aggressive pricing and rebating tactics and by launching new, related products.

The first biosimilar products launched in the United States were not priced significantly lower than the branded products, so it was simple for the brand manufacturers to simply offer better pricing and rebate terms to payers to retain preferable formulary position and, thus, market share. In addition, brands offered "bundled rebates," in which they'd require payers to continue to prefer a branded product, not the biosimilar competitor, in exchange for rebates on other key products. These rebate and pricing pathways are standard fare for both medical and pharmacy benefit drugs (including buy and bill), so this is often the first step for any manufacturer.

Additionally, brands are attempting to shift patients to slightly different versions of the drug that is facing biosimilar threats. Genentech, for example, has launched Herceptin Hylecta (trastuzumab and hyaluronidase), a subcutaneous version of its blockbuster drug Herceptin (trastuzumab) to drive utilization to a product that is not facing biosimilar competition.

As you might imagine, this creates a complex landscape for prescribers, who now need to be acutely aware of the particular criteria and formulary requirements of their patients' plans when selecting between reference and biosimilar products. Similarly, organizations may look to these newer, higher cost brand products as a means of maximizing revenue, provided they are covered by patients' plans.