Not so fast! Biosimilars face anemic adoption. What Plan Sponsors Should Know (Part 4 of 5).

Part 2: Success and Barriers to Biosimilar Uptake

To keep up with the fast growth of biologic products, biosimilars have been developed and approved at an accelerated rate. According to an IQIVIA report, in 2020, 64% of the biologics market or $135 billion in drug spend, are molecules with potential future biosimilars. To date, there are 35 molecules with biosimilars that have been launched, approved or in development(1).

An example of successful biosimilar uptake is filgrastim. The biosimilars currently account for 80% of market share. However, it took 6 years to achieve that level of uptake. Biosimilar manufacturers have refined their approach in the recent years to be more competitive at launch. For example, the 3 most recently launched biosimilars bevacizumab, trastuzumab and rituximab achieved 42%, 38% and 20% market share respectively in 2019. It is estimated that these biosimilars will exceed 50% within 2 years of market entry. This is substantially higher than previous biosimilar launches and on par with the adoption rates in Europe (1).

Although the future may look promising, biosimilar uptake is also facing various barriers, which explains the slow adoption in the U.S. than other countries.

The first barrier is the delayed establishment of an evaluation and approval system. The FDA finalized guidelines and requirements for biosimilar approval in 2015 and the first approval was Zarxio in 2015. Comparatively, Europe had already established a biosimilar evaluation system for almost 10 years. This delay has significantly limited the entry of many biosimilars to the market.

Another key issue has been patent litigations. For example, Erelzi was approved by the FDA in August 2016 as a biosimilar to Enbrel for the treatment of rheumatic and autoimmune diseases. However, the launch of Erelzi has been delayed due to patent protection of Enbrel until 2029.

The third barrier is due to formulary preferences for biologics over biosimilars. Dependent on their contracts and rebates with manufacturers, a payer may decide to place biologics as preferred products over the biologics (2).

Different from generic drugs, the price reduction impact of biosimilars is also much lower. Market entry of generic drugs may cause brand name drugs to reduce their price to 70%, while the originator biologics may only reduce the price of the biologic by 15% in response to the competition with the biosimilar products.

While there are still challenges to biosimilar uptake, the next five years are expected to see an almost five-fold increase in cost savings as more biosimilars launch and existing biosimilars achieve more penetration.