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A recent series in Health Affairs questioned whether competition from biosimilar medicines is a viable path to providing relief from expensive biologic treatments for patients and the U.S. health care system. While its authors do not dispute that FDA-approved biosimilars are safe, effective and competitively priced medicines that increase patient access to more affordable life-saving therapies, they nevertheless conclude biosimilars are a failure and instead propose price controls on a brand biologic after its patents expire to drive down costs rather than foster market-based competition.
Yet, the authors neglect important progress made by biosimilars and downplay policy opportunities to further maximize the possibility of biosimilars in the United States. Most concerning is the proposal to abandon the model for biosimilar development and market access envisioned by Congress. This would reduce incentives for both competition and innovation, with negative consequences for America’s patients.
Today, specialty drugs and biologics are the most rapidly growing segment of increasing brand-name prescription drug costs in the U.S. According to IQVIA, these classes account for 49 percent of spending but only 2.2 percent of the total prescriptions.
Estimates from recent economic studies put the projected savings from $44 billion to as high as $250 billion over 10 years, and $378 billion over 20 years. Experts agree on the transformative potential and significant savings from biosimilars. A study done by Avalere Health found that the availability of biosimilars could increase overall access to biologic medicines by an additional 1.2 million patients.
With stakes this high, we agree with former Food and Drug Administration (FDA) Commissioner Scott Gottlieb’s admonition: “It’s far too early to throw in the towel on biosimilars.” Accordingly, it is important to debunk some of the key arguments against biosimilars.
The authors correctly note that it took time for the FDA to establish its regulatory pathway and for sponsors to develop and submit applications. But as of this writing, FDA has approved 19 biosimilar medicines for use by patients. FDA continues to work with sponsors and has publicly noted that there are more than 70 development programs underway.
And rather than demonstrating limited price discounts, early signs confirm the potential for robust price competition among biosimilar medicines. Currently marketed biosimilars average a 47 percent list price discount for patients and the U.S. health care system, living up to the promise to offer more competitively priced options. This competitive pricing has led to several major payors and pharmacy benefit managers preferring biosimilars over their brand counterpart. A recent study from Magellan found that preferring just one biosimilar over the brand product saved its health plan members 34 percent on prescription drug costs for that category.
The U.S. filgrastim market illustrates the potential for this competition. The first competitor to Amgen’s branded filgrastim (Neupogen), Teva’s Granix, entered the market in 2013 after Neupogen enjoyed a 16- year monopoly. Within six months, Granix wrestled 25 percent of the market from Neupogen and reached a 40 percent discount from the brand. When the second competitor entered the market two years later, Zarxio from Sandoz, savings only increased. After six months, Zarxio was priced at 60 percent off the brand Neupogen. Today, Zarxio holds more than 50 percent of the market at a 67 percent discount. Relief for patients has continued with Pfizer’s Nivestym, which entered the market in October 2018.
As we have seen firsthand in the EU, research advances have yielded safe and effective biosimilars that increase the quality and length of patients’ lives. Biosimilars approved for use in the EU have an estimated combined 700 million patient days of clinical experience in markets around the world, demonstrating their safety, efficacy and quality. Cost savings in Europe from biosimilars is estimated to range from $16 billion to $43 billion by 2020.
While there remain significant challenges to successful development of a robust biosimilars market in the United States, the good news is that most of these can be surmounted by informed policymaking by FDA, CMS and Congress. Opportunities to foster patient access to biosimilars include ensuring that FDA’s naming policy supports biosimilars, addressing brand company spread of misinformation on biosimilar safety and efficacy, aligning payer and provider incentives to encourage early adoption of biosimilars, and ending brand patent gamesmanship.
Biosimilars are already delivering on their promise of safety, efficacy, competition, savings and access. Abandoning these medicines now means leaving patients with fewer treatment options at a higher cost. It’s bad advice that warrants a second opinion.
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