Biosimilars could reduce overall spending on biologic products by $54 billion from 2017 to 2026, according to new research from the Rand Corp.
Given the level of uncertainty surrounding the biosimilars market, however, the range of savings could be as low at $24 billion or as high as $150 billion.
“Because of limited U.S. experience with biosimilars, the key assumptions on market share and biosimilar prices are ‘best guesses’ based on anecdotes or professional opinion,” Andrew Mulcahy, PhD, a health policy researcher at Rand, and his colleagues, wrote in a perspective report.
There are currently three biosimilars on the market, including one product that is a biosimilar to filgrastim and two that are biosimilar to infliximab. Two other biosimilar products, one for adalimumab and one for etanercept, have received approval from the Food and Drug Administration, but neither has been made available for sale yet.
“Whether actual cost savings end up above or below our baseline estimate hinges in large part on whether manufacturers continue to have a business case to invest in developing and marketing biosimilars,” the authors noted, citing a number of areas, including intellectual property litigation, payment, price competition, nonprice competition from reference biologic manufacturers, naming convention, and interchangeability.
Getting over these hurdles could require legislative or regulatory solutions.
“The pervasive uncertainty in the U.S. biosimilar market – including questions as to whether the market will be sustainable and lead to cost savings, as intended – presents two choices for policymakers,” Dr. Mulcahy and his colleagues wrote. “One strategy is to let the market continue to develop under current policies,” with stability coming from experience.
The alternative could be policy levers to “help steer the U.S. biosimilar market more quickly to a sustainable, competitive state,” they continued. “For example, regulators at the FDA could experiment with new approaches to provide stronger, earlier signals through guidance documents or other mechanisms on expectations surrounding interchangeability and other topics.”
The FDA appears to be moving on the latter. In an Oct. 23 blog post, FDA Commissioner Scott Gottlieb, MD, and Leah Christl, PhD, associate director for therapeutic biologics in the office of new drugs at the FDA’s Center for Drug Evaluation and Research, outlined a number of recent tools to help biosimilar adoption. The resources provide basics such as the basic definition associated with biosimilars (i.e., what is a biosimilar and a reference product, and what it means to be interchangeable), the standards of approval that biosimilars must go through, and easily accessible information on what the FDA is using to review biosimilarity.
“Next, FDA plans to embark on additional research with health care professionals to learn more about the types of information prescribers need to properly communicate with their patients about biosimilars,” Commissioner Gottlieb and Dr. Christl wrote. “An increase in market competition, offered by a growing complement of biosimilars, may lead to meaningfully reduced costs for both patients and our health care system.”
The Centers for Medicare & Medicaid Services also plays a role in developing policy to spur biosimilar adoption, Dr. Mulcahy and his colleagues wrote. They note work being done by the Medicare Payment Advisory Commission on recommendations that could address payment for physician-administered biosimilars under Part B, as well as incentives in the Part D prescription drug program to steer patients and providers toward lower cost biosimilars when appropriate.
“Beyond FDA regulation, payment, and coverage, both government and industry could play a role in educating patients and providers about the potential cost savings from biosimilars, much like both groups have done for generic drugs,” they stated. “While our study does not address whether policy action is needed now, it is likely that the answer will become clearer over the next 1 to 3 years as the market continues to develop.”
