Will biosimilars deliver on expectations?

January 6, 2018

This might be the year when it becomes clear, perhaps painfully so, whether or not biosimilars can deliver on cost savings expectations.

The biosimilars market began to pick up in 2017 as federal agencies offered more clarity about the emerging regulatory landscape and the FDA issued draft guidance on naming and interchangeability. Those regulatory clarifications will help bring the United States into the biosimilars era-if their manufacturers can seize sufficient market share, according to experts.

Until November 2017, Medicare Part B payment policy for biosimilars left manufacturers unclear as to how they would compete with reference biologics, says Amanda Forys, MSPH, Senior Director at Xcenda, a part of AmerisourceBergen.

CMS had indicated in 2016 that biosimilar products for a given reference biologic would all share a single billing code separate from the reference product, meaning that Medicare Part B would reimburse each biosimilar at the same rate-the average sales price for all products sharing that billing code plus 6% of the reference product’s average sales price, Forys says.

That would have been caused uncertainty in biosimilar pricing for providers compared to reference products and could have created challenges for pharmacovigilance, as biosimilars are not interchangeable with one another.  Together, these challenges could have significantly slowed provider uptake of biosimilars, she says.

But in November 2017, the CMS issued final rules for the Physician Fee Schedule and the Hospital Outpatient Prospective Payment System that instead establish unique billing codes for each biosimilar. The rules will take effect in 2018.

That decision will encourage competition in the biosimilars market and ultimately hasten patient access to less-expensive drugs, Forys says. “Where we still have a problem and need to think about the next step is Medicare Part D. Biosimilars do not count as branded products under the Medicare Part D program, which means manufacturers cannot participate in the coverage gap discount program, which provides patients discounts in the ‘donut hole’ [coverage gap].”

The FDA also released in 2017 draft guidance for establishing interchangeability, says Gary H. Lyman, MD, MPH, codirector of the Hutchinson Institute for Cancer Outcomes Research, Fred Hutchinson Cancer Research Center, and professor of medicine at the University of Washington School of Medicine, in Seattle.

To be deemed interchangeable with their reference biologics, biosimilars will have to meet additional regulatory requirements, including evidence that the product is expected to produce the same clinical results as the reference product and that the safety and efficacy effects of switching between reference biologics and the biosimilar product has been evaluated.

No biosimilars have yet been approved as interchangeable and that’s unlikely to change in 2018, Lyman suspects. But state governments will become bigger players in implementing biosimilar interchangeability, as more state legislatures weigh in on implementation of interchangeability for biosimilars prescribing.

“Thirty-five states already-and more to come-have preempted forthcoming federal rules on interchangeability, switching and notification,” Lyman says.

‘Landmark year’ for oncology biosimilars

Biosimilars began to move into clinical oncology in 2017, with the FDA’s first approval of an anticancer biosimilar for Avastin (bevacizumab). Mvasi (bevacizumab-awwb), is approved for treating metastatic colorectal and renal cell carcinoma, cervical cancer, glioblastoma, and non-squamous non-small-cell lung cancer, and will likely be available in 2018, says Lyman.

In May 2017, the FDA Oncologic Drugs Advisory Committee also recommended approval of an epoetin alfa biosimilar across all indications of reference biologics for treatment of anemia. Lyman says this will likely gain approval in 2018 or early 2019.

The FDA also approved biosimilars in 2017 for the tumor necrosis factor-alpha (TNF-α) inhibitors Renflexis (infliximab) and Cyltelzo (adalimumab) for Crohn’s disease, ulcerative colitis, rheumatoid arthritis, plaque psoriasis, psoriatic arthritis, and ankylosing spondylitis, Lyman says. The Cyltelzo biosimilar, Adalimumab-adbm, was also approved for juvenile idiopathic arthritis. The Renflexis biosimilar (infliximab-dyyb) was introduced in October 2016.

2018 will be another landmark year for oncology biosimilars, Lyman says. Biosimilar trastuzumab, rituximab, cetuximab, and other versions of bevacizumab are likely to gain approval in 2018 or early 2019.

“For the first time we will have biosimilar anticancer drugs and not just biosimilar supportive care agents like filgrastim,” he says.  

“Patients who are currently doing well on an originator biologic are likely to continue on that per patient and provider preference,” he says. “However, changes may be forced based on reimbursement or formulary restrictions even in the absence of an interchangeable label.”

Next: Cost impact

 

 

How costs will be affected

Ultimately, insurers and health systems will likely “drive the uptake” of biosimilars by restricting use of biologics via negotiated pricing, Lyman says. Biosimilars will likely enter the market priced at a 20 to 40% discount to their reference competitors, predicts Forys.

“I anticipate that the uptake of biosimilars in the U.S. will be more gradual than in Europe,” Lyman says of oncolytic biosimilars. “The U.S. healthcare system is far more independent, with the majority of cancer patients treated in the community.”

Some clinicians will be uneasy with newly-approved biosimilars compared to the original reference biologics.

And, as anticancer biosimilars launch, patients and oncologists are going to be “very, very concerned” about substituting branded oncolytics, considering the life-and-death stakes, says Ambrose Carrejo, PharmD, national pharmaceutical contracting leader at Kaiser Permanente.

Many branded biologics have strong patient copay assistance programs in place, he says.

Lyman agrees. “There will likely be concern about switching from previously approved biologics of known safety and efficacy to new biosimilars approved with much less clinical data supporting efficacy and safety along with extrapolation of approval to other indications with little or no data provided,” he says. There will be concerns about possible rare or delayed toxicities, so postmarketing surveillance will be “critical” for clinical acceptance.

“We need to be able to identify and track different forms of biologics [and] biosimilars in practice and identify unusual or delayed toxicity or loss of efficacy,” he says. “It is also critical that providers be notified when a patient is switched from a reference product to a biosimilar, or between biosimilars.”

If biosimilars do become well-accepted, the savings could be profound. A recent analysis by the Rand Corporation suggests that biosimilars could cut healthcare spending in the United States by more than $50 billion over the coming decade.

Not everybody is as optimistic, however.

“How will biosimilars affect costs overall? They may not, is my concern,” Carrejo says.

He points to the recent Remicade (infliximab, J&J) biosimilar Inflectra (infliximab-dyyb, Pfizer) as one sign of potential trouble ahead.

Inflectra has been trying to capture market share from infliximab and Pfizer has filed suit against J&J in federal court over allegedly suppressing price competition from biosimilars using exclusionary contracts.

Pfizer launched Inflectra in 2016 at a 15% discount compared to Remicade’s price. But a year later, Inflectra had captured only 2.3% of infliximab volume, according to a 2nd quarter investors’ call.

If that’s the market share biosimilars manufacturers can look forward to, Carrejo says, “one can imagine that they are going to take their football and go home-that, you know, there’s just no money in biosimilars,” he says. “That would be catastrophic. How else are we to create competition in this branded arena and prevent or mitigate some of the pricing actions that have been going on year over year over year in the form of multiple price increases, double-digit, with no added innovation or added value in that product? In my mind, that would just be a shame if the robust biosimilars market that we dreamt of, came and went before prices were affected.”