Biosimilars: The price is not right
A recent medwireNews Hot Topic Review in Medicine Matters rheumatology nicely summarizes the recent emergence of biosimilars in rheumatology . Biosimilars are biologic drugs that are similar to the branded medication already licensed for use, but differ from generic agents because as biologic products they are not exact replicas of the reference product and instead have slight variations. These biologic differences have required new regulatory processes to establish whether or not there are any significant differences in structure, function, efficacy, and safety.
The emergence of several biosimilars in rheumatology has led to published consensus-based guidelines for their use . These guidelines optimistically express that the collective goal of biosimilars is to make available alternatives to previously patent-protected biologic medications which have been established as effective, sometimes dramatically effective, in multiple rheumatologic conditions over the last twenty years, but which have high costs. Cheaper versions of these drugs would potentially increase their availability to all appropriate patients. In another review of rheumatologic biosimilars, Dörner et al. claim that biosimilars in rheumatology would “remove the current inequality in their use.”  Obviously, the hope is that these products would minimize the financial burdens of biologic agents for the individual patients as well as healthcare systems in general.
Biosimilars first emerged in the field of oncology with similar optimistic assumptions. A 2014 report from the Rand Corporation estimated that in the US oncology biosimilars would achieve a $44.2 billion in savings from 2014 to 2024 . Several recent reviews regarding biosimilars in oncology, however, have suggested that the early assumptions regarding cost savings may have been overly optimistic [4,5]. Some of these lessons are very relevant to what has occurred in rheumatology.
Particularly in the US, the relative price of biosimilars in rheumatology has usually been between 75-85% of the price of the branded versions of the drug . The resulting relative cost savings are probably not sufficient to significantly alter the overall availability of biologic agents. There may be many reasons to explain the relatively high prices of biosimilars. They must be obtained from biologic sources using complex manufacturing processes which can be fraught with instability and difficulties. Required preclinical studies on the biosimilars include structural analyses, functional assays, and pharmacodynamic studies. Required clinical studies are expensive, with head-to-head comparisons of biosimilars with the originator products to show a high degree of similarity in structure, function, efficacy, safety, and immunogenicity. These studies, however, are not as exhaustive as those required to research, develop, study, and bring the originator biologic products to the marketplace. In addition, the regulators have allowed for extrapolation across different indications without the need for expensive clinical trials to prove efficacy and safety for each indication, saving significant amounts of time and money. As rigorous as the regulatory processes are for biosimilars, certainly more rigorous than those for the production of a generic drug, they do not seem to be a sufficient explanation for the costs of the drugs.
Barriers to entry into the marketplace may also contribute to the relative cost of biosimilars. Regulatory market uncertainties and legal hurdles for these agents were probably more complicated than anticipated. The Biologics Price Competition and Innovation Act of 2009 mandates market exclusivity for 12 years for biologics following US Food and Drug Administration (FDA) marketing approval . During this period the FDA is prohibited from approving biosimilar applications which include clinical trials involving the reference drug, essentially limiting biosimilar testing. Aggressive patent strategies to protect the bio-originator products have also allowed pharmaceutical companies to deter competition . The US has the largest market for biologics but also the highest prices, and it is not an unjustified assumption to suggest that unusual market forces have been at play.
Very importantly, the relative prices of certain biosimilars, particularly in the US, were dramatically affected by the acceleration in the price of the branded drug in the years prior to the introduction of the biosimilar. The conspicuous example in oncology was the drug Gleevec which had seven price increases from its $70,000 per year cost during the past two years of patent protection . In rheumatology, the price of Humira has increased eight times, by 73%, in the three years parallel to the anticipated emergence of the first Humira biosimilar . If the cost of a biosimilar is calculated as a percentage of the original biologic at the increased price, then any true cost saving is relatively small.
Competition in the biosimilar market was anticipated to help lower prices. The manufacturing of biologics, however, may not come from generic pharmaceutical companies who are not equipped to produce biologics, but instead from the dominant branded biologic manufacturers . When a few such companies control manufacturing, competitive pricing efforts are unlikely to succeed. A recent review of the costs of biosimilars cited a US major producer of branded biologics which received FDA approval for a biosimilar of infliximab and set the initial price at 15% of the originator compared to a 45% discount for biosimilar infliximab in the EU .
Currently, biosimilars must be prescribed by physicians. There are no biosimilars considered interchangeable with the originator drug, and automatic substitution is prohibited. This severely limits the impact of pharmacy substitution, which is an essential driver of generic drug use that is credited at saving billions of dollars in the US health care system [4,5]. This regulation may severely limit biosimilar market share and negatively affect pricing.
Cautious rheumatologists and their patients may simply assume that the newer biosimilars are inferior or conclude that there is insufficient evidence to support equivalent efficacy and safety between the originator biologic and its biosimilar, with both ideas leading to less usage of the latter. Whether or not more data regarding the real-world efficacy and safety of biosimilars will result in a significant increase in usage remains uncertain. Regardless, recent history suggests that increased market penetration does not necessarily lead to a decrease in drug pricing; in fact, the result is often the opposite.
Cost savings from biosimilars are currently limited by these and other complicated factors [4,5]. The initial optimism of significant decreases in prices and increases in availability for biosimilars may not be realized, certainly not until there is more published evidence and experience supporting their use, accompanied by the probable need for significant changes in specific relevant policies and regulations. The cost of biosimilars is still too high and seems likely to remain so into the near future.
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- Barnard C. Biosimilars: the story so far. Available at https://rheumatology.medicinematters.com/biosimilars/infliximab-biosimilar/biosimilars-the-story-so-far/15303020. [Accessed 16 March 2018].
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- Dörner T, Strand V, Cornes P et al. The changing landscape of biosimilars in rheumatology. Ann Rheum Dis 2016; 75(6):974-982.
- Yang YT, Chen B, Bennett CL. Biosimilars-Curb Your Enthusiasm. JAMA Oncol 2017. 3(11):1467-1468.
- Bennett CL, Sartor OA, Armitage JO, et al. Biosimilar and generic cancer drugs unlikely to bend cost curve in the United States. Lancet Oncol 2017. 18(1):22-23.