Patient access, health care cost reduction spur biosimilars development

Dennis R. Cryer
Dennis Cryer

The main rationale for regulations that encourage development of biosimilars is, in brief: biologics are expensive. Relative to the total market, biologics are a narrow class of drugs, yet in 2014 the biologics market was worth $179 billion, representing 23% of pharmaceutical expenditures worldwide and 9.3% of all health care expenditures in the U.S., according to the Biosimilars Forum.

Thus, the goal of biosimilar development is to spur competition in the biologics market and thereby reduce costs to the health care system and expand patient access to biological therapies. Much of these savings are expected to result from the reduced development and approval costs enabled by the abbreviated biosimilar development pathway enacted within the Affordable Care Act, which relies primarily on analytical data and extrapolation to indications without clinical trials.

In effect, biosimilars are expected to save the U.S. health care system an estimated $44.2 billion in direct spending on biologics between 2014 and 2024, according to researchers from the RAND Corporation. However, as the biosimilar market in the U.S. is relatively young, the overall cost-savings remain to be seen, according to Dennis Cryer, MD, co-convener of the Biologics Prescribers Collaborative.

“While biosimilars will likely provide significant cost-savings long-term, it will likely take several years and many more biosimilars to emerge on the market, to determine overall savings,” Cryer said on behalf of the collaborative.

Despite several recent regulatory approvals, Zarxio (filgrastim-sndz; Sandoz) has been the only biosimilar available in the U.S., having just hit the market in 2015. Inflectra (infliximab-dyyb; CT-P13, Celltrion), reportedly becoming available in late November 2016, is the second.

Therefore, real-world cost-savings data in the U.S. are currently limited, according to Angus B. Worthing, MD, FACP, FACR, of Arthritis & Rheumatism Associates; clinical assistant professor of medicine in the department of rheumatology at Georgetown University Medical Center; and chair of the Government Affairs Committee at the American College of Rheumatology.

Angus B. Worthing

“The only biosimilar in the U.S. so far is the filgrastim-sndz biosimilar to Neupogen, and its price came down 15%, according to approximately a year of data, and there just happened to be an equivalent planned discount for the Remicade biosimilar, Inflectra,” Worthing told Healio. These savings are relatively on target with initial estimates reported by the Federal Trade Commission in 2009 of a 10% to 30% discount, he noted.

“Considering the price for biologics are often very expensive, that [15%] lowered price does provide substantial cost-savings when looking at it as a whole,” Cryer said.

However, with limited real-world data in the U.S., the conversation is limited to “the potential for savings in the U.S., whereas Europe is already realizing the savings,” Worthing said.

Real-world European pharmacoeconomic data

Indeed, substantially more data on the real-world pharmacoeconomic impact of biosimilars have been reported in Europe, where biosimilars have been on the market for more than a decade.

Data from a pair of cost-utility studies of CT-P13 — approved as a biosimilar to infliximab by the European Medicines Agency in September 2013 and marketed in Europe as Remsima — were recently presented at United European Gastroenterology Week, and demonstrated real-world cost savings and the potential to increase patient access to this therapy.

One compared the cost-effectiveness of biosimilar infliximab to the originator and other anti-TNFs in patients with luminal Crohn’s disease across nine European countries, including Belgium, France, Germany, Hungary, Italy, the Netherlands, Spain, Sweden and the U.K. The researchers used a Markov model to analyze cost-effectiveness from a third-party payer perspective over 5 years, and found that the biosimilar was superior to the originator in all countries evaluated, and was also superior when used in an infliximab-adalimumab-vedolizumab sequence.

The other study showed total cost savings from the same agent ranged from 1.35 million euros in Germany to 5.97 million euros in Spain in 2015, and the latter results suggest the biosimilar could expand access to an additional 1,085 patients per year, according to a press release from Celltrion.

However, while real-world studies show the implementation of biosimilars has led to a 30% to 50% reduction in the cost of biologics overall in Europe, these data do not easily translate to the U.S. health care system, according to Stephen B. Hanauer, MD, AGAF, FACG, the Clifford Joseph Barborka Professor of Medicine in the division of gastroenterology and hepatology at Northwestern University Feinberg School of Medicine.

Stephen B. Hanauer, MD
Stephen B. Hanauer

“In Europe, the national health systems purchase the drugs, and so they are able to influence the cost more so than in the U.S.,” he said. In effect, “this is not going to mean a 30% to 50% reduction in cost to patients. It is going to end up being a reduction in the cost to the insurance companies and to the pharmacies who will be able to purchase [biosimilars] at a lower cost from the originator compound, and secondarily, that should allow more patients to have access to these drugs.”

Worthing agreed that we can expect the cost-savings to the U.S. system to be more modest than Europe’s because of our different health care systems. One major difference from the way Europe has implemented biosimilars is the separate designation for interchangeability in the U.S., for which the FDA issued draft guidance in January 2017.

Cost-savings of interchangeable products

These separate criteria for interchangeability, which must demonstrate the safety of alternating back and forth between biosimilars and reference products, seem to be an appropriate way to reduce costs while also prioritizing patient safety in the unique context of a multiple-payer system, according to Worthing.

“Whereas the single-payer can mandate all patients to switch from the reference biologic to the biosimilar in Europe, by contrast the FDA has set up a system in which patients may not be switched automatically if a follow-on drug is approved as a biosimilar,” he said. “In the future, pharmacists will be able to substitute biopharmaceuticals that are proved to be interchangeable. The pathway for proving interchangeability proposes clinical trials to study pertinent safety and efficacy endpoints after switching patients back and forth three times between originator and biosimilars (ie, A-B-A-B). This mimics the way patients can be expected to use biosimilars in a multipayer, multi-formulary marketplace like the US. However, the FDA has not finalized the pathway yet.”

For now, however, pharmacists’ inability to automatically switch biosimilars like they can with generics contributes to the relatively modest cost-savings of biosimilars, he added.

“If I write a prescription for a brand name drug, Lipitor for example, the pharmacist can switch the drug to atorvastatin, the generic equivalent approved by the FDA, and this is regulated state by state,” Worthing said. “The ability for the pharmacist to switch without a new prescription coming from me ... initially reduced the price, I think in that case, by 90%. For biologics, however, pharmacists will not be given the ability to substitute ... to a biosimilar, [because] at this point, we do not have any interchangeable drugs in the biologic space. Just that difference alone reduces the market forces of switching and the ability to reduce the price.”

Despite regulations that currently restrict nonmedical switching of reference products and biosimilars, Worthing said many physicians worry about the possibility that insurance companies, through certain incentives, could create their own system of nonmedical switching.

“Rheumatologists are quite concerned ... that the entity paying for [the biologic], the insurance company, or the entity managing that transaction, the pharmacy benefits manager, will effectively switch patients or incentivize switching by changing their formularies so that they will not cover the biologic reference product, but will only cover biosimilars,” he said. “In that situation, the mechanics of it would be that the doctor prescribes the drug, the pharmacy informs the doctor it is not covered, and then the doctor would have to write a new prescription for the biosimilar, because he or she would be worried the patient would not be able to stay on the drug that they are taking. We are worried about that, because it effectively creates a system of switching when we have not studied it yet, and we anticipate that patients will have to switch back and forth as they move from one insurance company to another when ... moving over state lines or switching jobs, as people do. We are hoping that this so called nonmedical switching will not affect our patients. My personal view, however, is that it will be reassuring to see the data proving biosimilar safety and efficacy from the kinds of switching trials proposed in the FDA interchangeability pathway. Manufacturers who provide data about switching will likely be rewarded with increased market share and improved prescriber confidence about interchangeability.”

Aside from the issue of interchangeability and nonmedical switching, another more fundamental difference between biosimilars and generics are their respective development costs. While the regulatory pathway for biosimilars may be abbreviated, it is still quite rigorous, and the overall cost savings to the health care system may therefore be more modest than those seen from conventional generics, some have argued.

“For comparison purposes, it typically costs $100 million to $200 million and requires 8 to 10 years to develop a biosimilar product, while it takes $1 million to $5 million and 3 to 5 years to develop a traditional generic drug,” Cryer said.

In addition, payers have expressed concerns that drug companies’ price hikes of originator products in anticipation of competition from biosimilars may be further eroding overall cost-savings to the health care system. The Wall Street Journal recently reported, for example, that AbbVie has raised the price of Humira by 73% over the past 3 years, and that payers expect the biosimilars that come to market when its patent expires later this year to cost about what the originator cost before the price hikes.

“We are definitely seeing that the era of biosimilars, from the creation of the pathway in 2010 until now, is costing the system money instead of saving the system money,” Worthing said. “For example, with Remicade ... the price in that 6-year period has increased about 70%, whereas the biosimilar Inflectra will come out at a 15% discount, so from that perspective the system is costing us money thus far.”

It may take multiple biosimilars of multiple originator drugs to spur enough competition to result in a net cost-savings to the health care system, Worthing said. Now, “with a unified government with the Republicans’ appreciation for market-based solutions, I am anticipating that we may see some action on this, perhaps with more support of the FDA in their guidance and approval process, so the 60 plus drugs in the pipeline can come out and reach the marketplace in a safe and effective manner.” by Adam Leitenberger

Disclosures: Worthing reports he is a consultant for AbbVie. Hanauer reports he has served as a consultant for AbbVie, Amgen, Boehringer Ingelheim, Hospira, Janssen, Merck, Pfizer, Samsung, Takeda and UCB. Cryer reports no relevant financial disclosures.

References:

Biosimilars Forum: Overview. Biosimilars Forum website. http://www.biosimilarsforum.org/sites/default/files/uploads/biosimilars_overview_032816opt_-_copy_0.pdf. Accessed November 28, 2016.

Han SH, et al. Abstract P0860. Presented at: United European Gastroenterology Week; Oct. 15-19, 2016; Vienna.

Paramsothy S, et al. Gastroenterology & Hepatology. 2016;12:741-751.

Rencz F, et al. Abstract OP146. Presented at: United European Gastroenterology Week; Oct. 15-19, 2016; Vienna.

Rockoff JD. Knockoffs of biotech drugs bring paltry savings. The Wall Street Journal. May 5, 2016. http://www.wsj.com/articles/knockoffs-of-biotech-drugs-bring-paltry-savings-1462458209. Accessed November 28, 2016.

 

Dennis R. Cryer
Dennis Cryer

The main rationale for regulations that encourage development of biosimilars is, in brief: biologics are expensive. Relative to the total market, biologics are a narrow class of drugs, yet in 2014 the biologics market was worth $179 billion, representing 23% of pharmaceutical expenditures worldwide and 9.3% of all health care expenditures in the U.S., according to the Biosimilars Forum.

Thus, the goal of biosimilar development is to spur competition in the biologics market and thereby reduce costs to the health care system and expand patient access to biological therapies. Much of these savings are expected to result from the reduced development and approval costs enabled by the abbreviated biosimilar development pathway enacted within the Affordable Care Act, which relies primarily on analytical data and extrapolation to indications without clinical trials.

In effect, biosimilars are expected to save the U.S. health care system an estimated $44.2 billion in direct spending on biologics between 2014 and 2024, according to researchers from the RAND Corporation. However, as the biosimilar market in the U.S. is relatively young, the overall cost-savings remain to be seen, according to Dennis Cryer, MD, co-convener of the Biologics Prescribers Collaborative.

“While biosimilars will likely provide significant cost-savings long-term, it will likely take several years and many more biosimilars to emerge on the market, to determine overall savings,” Cryer said on behalf of the collaborative.

Despite several recent regulatory approvals, Zarxio (filgrastim-sndz; Sandoz) has been the only biosimilar available in the U.S., having just hit the market in 2015. Inflectra (infliximab-dyyb; CT-P13, Celltrion), reportedly becoming available in late November 2016, is the second.

Therefore, real-world cost-savings data in the U.S. are currently limited, according to Angus B. Worthing, MD, FACP, FACR, of Arthritis & Rheumatism Associates; clinical assistant professor of medicine in the department of rheumatology at Georgetown University Medical Center; and chair of the Government Affairs Committee at the American College of Rheumatology.

Angus B. Worthing

“The only biosimilar in the U.S. so far is the filgrastim-sndz biosimilar to Neupogen, and its price came down 15%, according to approximately a year of data, and there just happened to be an equivalent planned discount for the Remicade biosimilar, Inflectra,” Worthing told Healio. These savings are relatively on target with initial estimates reported by the Federal Trade Commission in 2009 of a 10% to 30% discount, he noted.

“Considering the price for biologics are often very expensive, that [15%] lowered price does provide substantial cost-savings when looking at it as a whole,” Cryer said.

PAGE BREAK

However, with limited real-world data in the U.S., the conversation is limited to “the potential for savings in the U.S., whereas Europe is already realizing the savings,” Worthing said.

Real-world European pharmacoeconomic data

Indeed, substantially more data on the real-world pharmacoeconomic impact of biosimilars have been reported in Europe, where biosimilars have been on the market for more than a decade.

Data from a pair of cost-utility studies of CT-P13 — approved as a biosimilar to infliximab by the European Medicines Agency in September 2013 and marketed in Europe as Remsima — were recently presented at United European Gastroenterology Week, and demonstrated real-world cost savings and the potential to increase patient access to this therapy.

One compared the cost-effectiveness of biosimilar infliximab to the originator and other anti-TNFs in patients with luminal Crohn’s disease across nine European countries, including Belgium, France, Germany, Hungary, Italy, the Netherlands, Spain, Sweden and the U.K. The researchers used a Markov model to analyze cost-effectiveness from a third-party payer perspective over 5 years, and found that the biosimilar was superior to the originator in all countries evaluated, and was also superior when used in an infliximab-adalimumab-vedolizumab sequence.

The other study showed total cost savings from the same agent ranged from 1.35 million euros in Germany to 5.97 million euros in Spain in 2015, and the latter results suggest the biosimilar could expand access to an additional 1,085 patients per year, according to a press release from Celltrion.

However, while real-world studies show the implementation of biosimilars has led to a 30% to 50% reduction in the cost of biologics overall in Europe, these data do not easily translate to the U.S. health care system, according to Stephen B. Hanauer, MD, AGAF, FACG, the Clifford Joseph Barborka Professor of Medicine in the division of gastroenterology and hepatology at Northwestern University Feinberg School of Medicine.

Stephen B. Hanauer, MD
Stephen B. Hanauer

“In Europe, the national health systems purchase the drugs, and so they are able to influence the cost more so than in the U.S.,” he said. In effect, “this is not going to mean a 30% to 50% reduction in cost to patients. It is going to end up being a reduction in the cost to the insurance companies and to the pharmacies who will be able to purchase [biosimilars] at a lower cost from the originator compound, and secondarily, that should allow more patients to have access to these drugs.”

PAGE BREAK

Worthing agreed that we can expect the cost-savings to the U.S. system to be more modest than Europe’s because of our different health care systems. One major difference from the way Europe has implemented biosimilars is the separate designation for interchangeability in the U.S., for which the FDA issued draft guidance in January 2017.

Cost-savings of interchangeable products

These separate criteria for interchangeability, which must demonstrate the safety of alternating back and forth between biosimilars and reference products, seem to be an appropriate way to reduce costs while also prioritizing patient safety in the unique context of a multiple-payer system, according to Worthing.

“Whereas the single-payer can mandate all patients to switch from the reference biologic to the biosimilar in Europe, by contrast the FDA has set up a system in which patients may not be switched automatically if a follow-on drug is approved as a biosimilar,” he said. “In the future, pharmacists will be able to substitute biopharmaceuticals that are proved to be interchangeable. The pathway for proving interchangeability proposes clinical trials to study pertinent safety and efficacy endpoints after switching patients back and forth three times between originator and biosimilars (ie, A-B-A-B). This mimics the way patients can be expected to use biosimilars in a multipayer, multi-formulary marketplace like the US. However, the FDA has not finalized the pathway yet.”

For now, however, pharmacists’ inability to automatically switch biosimilars like they can with generics contributes to the relatively modest cost-savings of biosimilars, he added.

“If I write a prescription for a brand name drug, Lipitor for example, the pharmacist can switch the drug to atorvastatin, the generic equivalent approved by the FDA, and this is regulated state by state,” Worthing said. “The ability for the pharmacist to switch without a new prescription coming from me ... initially reduced the price, I think in that case, by 90%. For biologics, however, pharmacists will not be given the ability to substitute ... to a biosimilar, [because] at this point, we do not have any interchangeable drugs in the biologic space. Just that difference alone reduces the market forces of switching and the ability to reduce the price.”

Despite regulations that currently restrict nonmedical switching of reference products and biosimilars, Worthing said many physicians worry about the possibility that insurance companies, through certain incentives, could create their own system of nonmedical switching.

“Rheumatologists are quite concerned ... that the entity paying for [the biologic], the insurance company, or the entity managing that transaction, the pharmacy benefits manager, will effectively switch patients or incentivize switching by changing their formularies so that they will not cover the biologic reference product, but will only cover biosimilars,” he said. “In that situation, the mechanics of it would be that the doctor prescribes the drug, the pharmacy informs the doctor it is not covered, and then the doctor would have to write a new prescription for the biosimilar, because he or she would be worried the patient would not be able to stay on the drug that they are taking. We are worried about that, because it effectively creates a system of switching when we have not studied it yet, and we anticipate that patients will have to switch back and forth as they move from one insurance company to another when ... moving over state lines or switching jobs, as people do. We are hoping that this so called nonmedical switching will not affect our patients. My personal view, however, is that it will be reassuring to see the data proving biosimilar safety and efficacy from the kinds of switching trials proposed in the FDA interchangeability pathway. Manufacturers who provide data about switching will likely be rewarded with increased market share and improved prescriber confidence about interchangeability.”

PAGE BREAK

Aside from the issue of interchangeability and nonmedical switching, another more fundamental difference between biosimilars and generics are their respective development costs. While the regulatory pathway for biosimilars may be abbreviated, it is still quite rigorous, and the overall cost savings to the health care system may therefore be more modest than those seen from conventional generics, some have argued.

“For comparison purposes, it typically costs $100 million to $200 million and requires 8 to 10 years to develop a biosimilar product, while it takes $1 million to $5 million and 3 to 5 years to develop a traditional generic drug,” Cryer said.

In addition, payers have expressed concerns that drug companies’ price hikes of originator products in anticipation of competition from biosimilars may be further eroding overall cost-savings to the health care system. The Wall Street Journal recently reported, for example, that AbbVie has raised the price of Humira by 73% over the past 3 years, and that payers expect the biosimilars that come to market when its patent expires later this year to cost about what the originator cost before the price hikes.

“We are definitely seeing that the era of biosimilars, from the creation of the pathway in 2010 until now, is costing the system money instead of saving the system money,” Worthing said. “For example, with Remicade ... the price in that 6-year period has increased about 70%, whereas the biosimilar Inflectra will come out at a 15% discount, so from that perspective the system is costing us money thus far.”

It may take multiple biosimilars of multiple originator drugs to spur enough competition to result in a net cost-savings to the health care system, Worthing said. Now, “with a unified government with the Republicans’ appreciation for market-based solutions, I am anticipating that we may see some action on this, perhaps with more support of the FDA in their guidance and approval process, so the 60 plus drugs in the pipeline can come out and reach the marketplace in a safe and effective manner.” by Adam Leitenberger

Disclosures: Worthing reports he is a consultant for AbbVie. Hanauer reports he has served as a consultant for AbbVie, Amgen, Boehringer Ingelheim, Hospira, Janssen, Merck, Pfizer, Samsung, Takeda and UCB. Cryer reports no relevant financial disclosures.

References:

Biosimilars Forum: Overview. Biosimilars Forum website. http://www.biosimilarsforum.org/sites/default/files/uploads/biosimilars_overview_032816opt_-_copy_0.pdf. Accessed November 28, 2016.

Han SH, et al. Abstract P0860. Presented at: United European Gastroenterology Week; Oct. 15-19, 2016; Vienna.

Paramsothy S, et al. Gastroenterology & Hepatology. 2016;12:741-751.

Rencz F, et al. Abstract OP146. Presented at: United European Gastroenterology Week; Oct. 15-19, 2016; Vienna.

Rockoff JD. Knockoffs of biotech drugs bring paltry savings. The Wall Street Journal. May 5, 2016. http://www.wsj.com/articles/knockoffs-of-biotech-drugs-bring-paltry-savings-1462458209. Accessed November 28, 2016.

 

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