A new report from IMS Institute for Healthcare Informatics finds that biosimilar acceptance will grow and drive change in the healthcare system.
By 2020, biosimilars will drive notable change in health system costs, access and competition, according to a new report.
“Delivering on the Potential of Biosimilar Medicines: The Role of Functioning Competitive Markets,” from the IMS Institute for Healthcare Informatics, found that biosimilars will start competing with original biologics that have current sales of $50 billion annually.
Greater acceptance of biosimilar drugs in a growing number of therapy areas and an active pipeline of 56 new products in clinical development will deliver total savings of as much as $110 billion to health systems across Europe and the U.S. through the next four years, according to the report.
“If priced right, biosimilars can bring overall healthcare costs down,” says Managed Healthcare Executive Editorial Advisor Joel V. Brill MD, chief medical officer, Predictive Health LLC. “Competition should help to drive value.”
The extent that these biosimilars provide savings opportunities will depend on policy and implementation approaches that so far have varied across the European Union (EU), according to the report. Stakeholder education and incentives will play an important role in ensuring biosimilars deliver their full potential as these drugs make their way to the United States.
“Biosimilars should introduce competition into the marketplace just as generic products have,” says Jim Smeeding, president of TPG National Payor Roundtable, of the TPG Family of Companies. “While we all know that biosimilars are not exact copies as with generics-the same effectiveness as the originator product is what is being tested and licensed for biosimilars.”
With many large manufacturers in this market, including Amgen, Sandoz, and Pfizer, there will be competition on packaging and in contract bundling leading to overall reductions in price, according to Smeeding.
“Once FDA and CMS give final guidance on pricing and labeling the hope is to at least slightly bend the curve on overall pharmaceutical costs,” he says. “These products have significant intricacies in manufacturing and a large investment so overall costs reduction will not mimic the generic price drops but will still offer significant savings.”
Study key findings
Other IMS Institute study findings include:
• Variations across the EU in payer policy approaches limit the opportunity for biosimilars. Across Europe, payers have adopted a variety of approaches to encourage physicians to prescribe biosimilar medicines, motivate manufacturers to participate in the market, and provide adequate clinical evidence to support the prescribing of these treatments. Not all stakeholders are using competition to maximize in a sustainable way the benefits offered by biosimilars. According to the report, Germany educates physicians and implements measures designed to stimulate biosimilar prescribing. Austria, however, subjects biosimilars to mandatory price reductions that may force manufacturers out of the market-has had the opposite effect, resulting in reduced access to some biosimilar products.
• Biosimilar use in the EU and U.S. may yield total savings of $56 billion to $110 billion over the next five years. By 2020, eight major biologic drugs are expected to lose exclusivity protection, including treatments for autoimmune disorders and diabetes. By opening markets to biosimilar competition, healthcare systems could realize a 30% reduction in price per treatment day compared to originator biologics. The extent of actual savings will depend on policy decisions made and actions taken around incentives, education and pricing.
• Patient access to biologic treatments has grown by as much as 100% following the availability of biosimilars. In the EU, the use of erythropoietins (EPOs), granulocyte-colony stimulating factors and human growth hormone have all risen following the launch of biosimilar versions. This increase was heavily driven by the availability of biosimilars, as well as other factors such as expanded indications. In markets where access to these molecules was previously restricted, including Romania, Bulgaria, and the Czech Republic, average uptake of EPOs increased by more than 250% following the introduction of biosimilars. The greater use of biologics following the introduction of biosimilars can be attributed to their lower cost, as well as revisions to treatment guidelines that reflect improved cost effectiveness.
• Intensifying competition and greater choice are expected as new biosimilars reach the market. According to the report, about 30 companies are actively developing biosimilar medicines for launch and are pursuing biosimilar versions of 16 distinct molecules that will lead to greater competition by 2020. Biosimilars in development are for versions of infliximab, etanercept, rituximab and adalimumab.
• Capturing the benefits of biosimilar drugs requires a balance between controlling price and ensuring a sustainable, competitive marketplace. A narrow focus by payers on price alone risks constraining the longer-term opportunities for savings. This would make the biosimilars market less attractive for manufacturers-reducing incentives to invest in the development of subsequent waves of biosimilars. A balanced approach that incorporates education of physicians, patients and payers, and includes appropriate incentives for physicians and manufacturers, will help ensure that the benefits of biosimilars are fully realized, according to the report.
The study was funded by Novartis.