Biosimilars wreak an all too familiar headache. What plan sponsors should know (Part 1 of 5).

Specialty biologic products have been a heavily discussed topic by plan sponsors. They are placed at the top of every specialty management agenda by plan sponsors. They keep some managers awake at night, while others are taking every possible step to prepare for the inevitable. All of this is happening for several obvious reasons. Specialty biologics:

• are associated with high cost;

• require special handling, administration, and management; and,

• may be indented for long term chronic management.

Due to the complexity, high cost, and long term use potential of biologics it is anticipated they will continue to be a top agenda item for plan sponsors for the foreseeable future. In 2017, the top 10 most expensive Medicare Part B drugs were all physician-administered biologics, with a total cost of over $13 billion(1). As biologics lose their patents, biosimilars, or “follow-on” biologics, are entering the market as cost saving alternatives. It is anticipated that the entry of biosimilars into the biologics market will increase market competition, and thus both reduce prices and improve accessibility.

However, biosimilars face various challenges and barriers to significant market share or clinical adoption. In addition, the current modest presence of biosimilars on drug formularies affirms that prescribing patterns are not reflecting a smooth transition as one typically sees from brand to generic. There are several reasons for this. In Part 1 of this biosimilar series, we focus the conversation on understanding the definition of biologics vs. biosimilars vs. interchangeables , and the key difference between them.

Part 1: What are Biologics and Biosimilars?

Number of FDA Approved Biosimilars: 2015-2020

Biological products are often large and complex drug molecules that may be produced through biotechnology in a living system, such as a microorganism, plant cell, or animal cell, and are often more difficult to characterize than small molecule drugs(2). Biologic drugs are developed through a complex biologic process, and generally require special delivery systems. In addition, compared to traditional drugs, biologic drugs are sensitive to environmental change and conditions. Therefore, biologic drugs require a more robust and rigorous production and distribution process. Commonly recognized biologic products include gene therapies, monoclonal antibodies and vaccines. Biologics are known for their high cost, with prices ranging from $1,000 to $2.1 million(3,4) per utilizing member per year. The Biologics Price Competition and Innovation Act of 2009 opened the door for cheaper, for equally effective biosimilar and interchangeable alternatives to reference biologics to enter the market.

Biosimilars or follow-on biologics, are products that are made after the reference biologic and are highly “similar” in safety, purity and potency, but have slight differences in clinically inactive components. Biosimilars typically enter the market after the reference biologic loses it patent protection, thereby allowing other manufacturers to produce the drug.

Currently, biosimilars are not considered interchangeable with the reference biologics. However, the FDA has added an additional definition of interchangeable products for biosimilars.

An interchangeable product is comparable to a biosimilar product but undergoes more rigorous testing to ensure it produces the same clinical outcomes as the biologic product (2).

A product that is considered interchangeable is a clinical alternative to the reference biologic. This allows for that product to be an approved interchangeable biosimilar without the need to counsel the prescriber. The requirements for interchangeable products include the following: the interchangeable product must result in the same clinical outcome in any patient, and does not cause additional risk to the patient if s/he is switched between the biologic and interchangeable product throughout the course of therapy. As of the publication of this post, there are no known interchangeable biosimilar products approved by the FDA(2).

In Part 2: Will discuss the various roadblocks biosimilar’s face for uptake in the marketplace.