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Keith Loria is a contributing writer to Medical Economics.
Just as we’ve seen the entire healthcare landscape change in 2020 because of COVID-19, the world of biosimilars is ever-changing.
Just as we’ve seen the entire healthcare landscape change in 2020 because of COVID-19, the world of biosimilars is ever-changing. There’s a lot to keep up with if healthcare executives are to stay on top of the latest advancements.
Chicago-based Lumere, a leading provider of evidence-based data and analytics solutions, has five suggestions for what healthcare executives need to know about the biosimilars.
They can improve budgets
In 2020, healthcare executives are seeing unprecedented pressure on their overall organizational budget from many directions. Samantha Bastow, Pharm.D., pharmacy solutions adviser for Lumere, says biosimilars can help.
“Between 2015 and 2017, hospitals experienced an 18.5% rate of growth in drug spending compared to an overall medical inflation rate of 6.4% for the same period,” notes Bastow. “Biosimilars can help alleviate some of the pressure by providing less expensive alternatives, especially for drug classes that are notorious for having high acquisition costs.”
A 2014 Perspective from the Rand Corporation projected that using biosimilars would lead to a $44.2 billion reduction in direct spending on biologic drugs from 2014 to 2024, or about 4% of the total biologic spending over the same period, with a range of $13 billion to $66 billion.
Biologics have a disproportionate effect on costs
Biologics are used by approximately 2% of the U.S. population, yet they account for almost 40% of the money spent on drugs overall. Thomas Henry III, MBA, RPh, CPh, clinical pharmacy advisor at Lumere, notes recent analysis of net price increases for three biologic products (filgrastim, pegfilgrastim and infliximab) showed mean annual net price increases over time of 5.1%, 7.5% and 6%, respectively.
“After the introduction of the first biosimilar for each respective originator product the list prices stagnated but, importantly, net prices dropped by annual rates of 7.7%, 7.4% and 13.6%, respectively,” he says.
Congress established an accelerated pathway to bring biosimilar medications to market
In 2009, Congress passed the Biologics Price Competition and Innovation Act. Over the past five years, 26 biosimilars have been approved by the FDA, including biosimilars for some of the biologic with the largest sales, such as Remicade, Humira, Herceptin, Rituxan, Avastin, Enbrel, Neupogen, Neulasta and Procrit.
“Executives should anticipate the number of biosimilars coming to market to increase in the coming years,” Henry says. “In fact, according to market analyses, the global biosimilars market is estimated to grow annually by 57% between 2018 and 2024. Based on a recent evaluation, Lumere found a subset of its client base has increased year-over-year spend on colony-stimulating factors biosimilars by 500% between January to September 2018 and January to September 2019. Meanwhile, spending on biologics decreased by 4% in that same period.”
Specialty pharmacy programs will be on the rise
In an era of biosimilar promise, Bastow notes healthcare executives should be mindful of the investments needed to keep up with the increasingly complicated and sophisticated specialty pharmacy market.
“To help patients gain access to high-cost medications, hospitals are rapidly hiring specialty pharmacists and technicians and are heavily investing in training and data systems to support these relatively new roles,” she says.
Scientific innovation is expanding the market
Biologic drugs are not new, but scientific breakthroughs are expanding the market. And with that expansion will come more opportunities for biosimilars and downward pressure they can put on costs.
“Biologics include well-established agents such as insulin, human growth hormone and red blood cell stimulating agents,” Bastow says. “While these agents have been available for decades, the medical community has developed an increased understanding of genetics and cellular processes in recent years.”
This has led to an exponential growth in identifying new targets and biologic drugs to target each step in the protein-production process. Henry says researchers have developed biologics with new targets for treating anemia, cystic fibrosis, growth deficiency, diabetes, hemophilia, genital warts, transplant rejection and cancer.
Keith Loria is a freelance writer in northern Virginia.