The biosimilar market, especially in the United States, is in its infancy, with the first biosimilar approval in 2015. There are considerable differences and some similarities between the generic and biosimilar markets. Many barriers make biosimilar entry more difficult than was the case for generics. Some are the high cost of research and development (R&D); FDA approval, including manufacturing site acceptability; originator response; litigation, especially involving patents; stakeholder education; required postmarketing vigilance (phase 4); the lack of automatic substitution at the pharmacy, and biobetter development.

Biosimilars cost more to develop and this process takes much longer than for generics. Biosimilar 

 costs between $100 million and $200 million and takes from 8 to 10 years.

The long time for development means that returns have to be substantial to cover the interest cost. For example, Celltrion has 

 $112 million in the development of the infliximab biosimilar Remsima, which references Remicade. Amgen spends around $200 million on average on R&D for each biosimilar. Their complexity makes expertise in manufacturing important. Companies experienced in biologic manufacturing will have a learning curve advantage that translates into a cost advantage and makes entry risky for new or startup firms. Although some successful entrants into biosimilars may be small or startup firms, most are likely to be large biopharmaceutical companies that have successfully launched reference products. For example, Pfizer and Amgen are biosimilar entrants.

Initially, the first biosimilar for each reference product has entered at around a 15% discount from the list price. Samsung launched the second infliximab biosimilar at a 35% discount and Pfizer, the first to market with an infliximab biosimilar, lowered its price to match. Although generic drug launches tend not to force price decreases from originators, the opposite is the case with biologics. Generally, the reference product has already achieved a return on its investment during the time of intellectual property protection. It is still making a profit at the lower price, because it needs only cover its marginal costs.

Biosimilar firms will enter only if they believe they can get a return on investment. Too high initial discounts could discourage future entry into the biosimilar market. For example, in Norway there have been discounts of around 70%. One could see short-run benefits of lower prices, but fewer entrants and thus higher prices in the long run.

Given the market opportunity, there is expected to be an influx of biosimilars. For example, Coherent Market Insights 

 that the global biologic market will exceed $456.8 billion by 2027, up from $255.2 billion in 2019. US biologic sales in 2018 were $125.5 billion, up 9.5% from 2017, according to an IQVIA 

. In 2018, biosimilars had captured about 12% of the total spending on biologics, according to the same report. Some biologics have sales of over a billion dollars with some over $10 billion. Indeed, the world’s largest revenue-producing drug is the biologic Humira with sales of almost $19 billion in 2019.

Many firms are making huge investments in biosimilars. It is estimated that over 500 biosimilars are in development with over 200 being publicly 

Not surprisingly given sales of Humira, 8 adalimumab biosimilars have had patent settlements but none will enter US market until 

, and many more are in development. At least 8 different biologics have a minimum of 20 biosimilars in development.

If, for example, 19 biosimilar producers entered for a specific reference product and each company shared the market equally along with the originator, each company would get 5% of the market. Based on a $1 billion market prior to entry and an estimated 40% price discount, the annual revenue would be $31.6 million for each biosimilar company. Such a small annual revenue would make recoupment of investment difficult. Further, in most cases the biosimilars capture only a small part of the market. Also, originators are developing second-generation biologics that could make biosimilars obsolete for first-generation biologics.

The difficulty and risk of entry into the biosimilar trade is indicated by some notable exits. Merck KGaA (separate from Merck & Co) sold its biosimilar unit and departed the biosimilars business in 2017. Allergan has decided to leave the biosimilar market after it finishes the 4 cancer biosimilars that it is developing with its partner Amgen. Momenta has 

 that it is dropping all of its biosimilars except for an aflibercept candidate (M710, Eylea). Pfizer will 

In 2016, Epirus, a biosimilar upstart, filed for Chapter 7 bankruptcy. In 2018, Merck paid $155 million plus interest to get out of its 

 with Samsung Bioepis to develop an insulin glargine biosimilar to reference Lantus. Baxalta discontinued its development of biosimilars when it was purchased by Shire in 2016. Oncobiologics restructured and renamed itself Outlook Therapeutics and now has just a bevacizumab formulation under development, although it intends to seek FDA approval for that as a novel product.

Each company must determine what its biosimilar portfolio should be or whether it should even enter the market. Businesses that choose to enter should probably enter with more than 1 biosimilar. The more biosimilars in a portfolio, the greater is the investment needed, but the risk is lower. The greater the revenue

reference biologic, the greater the probability of more competition. The more companies that enter, the greater will be the price discounts. Some may want to enter smaller revenue markets, which could potentially be more profitable because of less competition. A combination of entering small

 medium, and large biologic revenue markets may be the best strategy. 

If the grand biosimilar experiment succeeds, competition will lead to lower prices and increase access. If biosimilar competition does not work, the result may be price controls. This could decrease the incentive to innovate and lead to fewer new drugs being developed.

In the United States, many stakeholders are serious about controlling health care costs. Payers are promising tough negotiations for expensive drugs. Also, as physicians and patients become more familiar and comfortable with biosimilars, these should do better. All the factors point to a highly competitive market, but it will take some time to develop. Historically, the EU generic market was not as strong as the comparable US market, so we might expect greater biosimilar uptake eventually in the United States.

Biosimilars and biologics are highly similar so there is not much difference, if any, in therapeutic effect. Mature markets will have 5 to 6 biosimilar competitors, with most being well-established, branded companies. Many biosimilars will not succeed. In the next 5 years there should be significant growth in the biosimilar market, considerable price discounts, and increased access. There may even be more new biologics as originators lose revenues and must innovate.

The biosimilar market is headed for a fork in the road, and the road taken will lead to savings and access or less competition and stiffer regulation.

Expect Shakeout Amid Biosimilar Market Growth

Joseph P. Fuhr, PhD

Robert Califf, MD, received Senate approval today to become FDA commissioner in a 50-46 vote, in which 6 Republicans supported him and 5 Democrats voted against his confirmation.

 1 senator who has been opposed to the nomination instead voted “present,” out of deference to colleague, Senator Ben Ray Lujan of New Mexico, who is recovering from a stroke.

Califf, a highly cited cardiologist and a founder of the Duke Clinical Research Institute, has recently served as a senior advisor to Verily and Google Health. He led the FDA during the final 11 months of the Obama administration, but his path confirmation this time has been rocky since he was nominated in November 2021. As recently as Friday, Senator Joe Manchin, D-West Virginia, 

 calling on Biden to withdraw Califf’s nomination. Manchin castigated Califf’s ties to the pharmaceutical industry and the FDA’s approval of 5 new opioids during his previous tenure as commissioner.

Joining Manchin in voting against Califf were fellow Democrats Senators Richard Blumenthal of Connecticut; Maggie Hassan of New Hampshire, and Ed Markey of Massachusetts, along with Bernie Sanders, I-Vermont.

Califf’s nomination also drew opposition from most Republicans, including antiabortion advocates who scrutinized his record on easing access to abortion medications. However, 6 Republican senators voted to confirm Califf’s nomination: Roy Blunt of Missouri, Richard Burr of North Carolina, Susan Collins of Maine, Lisa Murkowski of Alaska, Mitt Romney of Utah, and Pat Toomey of Pennsylvania.

The FDA has lacked a permanent, Senate-confirmed commissioner since Stephen Hahn, MD, left the role on President Donald Trump’s last day in office. Long-serving FDA official Janet Woodcock, MD, had been acting as commissioner for more than a year, but her tenure brought controversy, notably the approval aducanumab (Aduhelm) for Alzheimer disease. Woodcock had called for 

 of the administration’s actions in its relationship with the manufacturer, Biogen.

In addition, Califf will need to guide the FDA through the ongoing COVID-19 pandemic—including the decision on whether to authorize a vaccine for children under 5 years—and a host of other pressing issues, including e-cigarette marketing applications.

, 3 former FDA commissioners and a former CMS official urged the Senate to confirm Califf, writing that "it is long past time to have confirmed leadership at the FDA." Former commissioners Scott Gottlieb, MD, and Mark McClellan, MD—who served in Republican administrations—along with Obama administration veterans Margaret Hamburg, MD; and Andy Slavitt, former acting CMS administrator and member of President Biden's COVID-19 response team last year, said that Califf can "hit the ground running" to deal with the country's urgent, unmet health needs.

The Association for Accessible Medicines (AAM) had previously announced support for Califf when Biden announced the nomination in November, saying the group and its member companies “stand ready to work with Dr Califf and the entire FDA team to ensure America’s patients have timely access to safe, effective and quality generic and biosimilar medicines.”

In a 50-46 vote, the Senate confirmed Robert Califf, MD, as President Biden’s FDA commissioner. The agency has been without a permanent leader for more than a year.

Califf Wins Narrow Senate Vote for Second Turn as FDA Commissioner

Christina Mattina

As US lawmakers and regulators focus increasing attention on the problem of high drug prices, the rollout of biosimilars—and specifically interchangeable biosimilars&mdash;represents a key aspect of reducing nearly a quarter of the country’s pharmaceutical spend. The FDA’s recent draft guidance on 

 received considerable attention from industry stakeholders, with more than 50 comments submitted by the close of the FDA comment period.

As one of the few specialties to prescribe and administer biologic therapies, the American College of Rheumatology (ACR)—a professional association that represents the nation’s rheumatologists, rheumatic disease researchers, and other rheumatology health leaders&mdash;believes the draft guidance strikes the appropriate balance of ensuring safety and transparency while also bringing new therapies to the market as efficiently as possible. From the ACR’s perspective, this balance will be key to increasing biosimilar utilization and competition in the marketplace while simultaneously driving down the cost of these therapies for patients.  

Biologics are a life-changing treatment option for millions of Americans who live with debilitating rheumatic diseases such as rheumatoid arthritis and psoriatic arthritis, helping patients manage pain while also slowing disease progression and preventing disability. Although highly effective, biologics are also extremely expensive, causing frustration for both patients and rheumatologists alike. After all, 

what use is a life-changing drug if a patient cannot afford it? 

The cost challenges associated with access and adherence to biologic therapies is the primary reason the rheumatology community has welcomed the advent of biosimilars. The ACR believes the introduction of safe and effective biosimilars will be critical to increase competition and drive down costs in the biologics marketplace. 

However, the clear need to bring new therapies to market must not supersede safety and efficacy. Prescribing doctors need to be assured of the scientific validity of the criteria being used to label a biosimilar as “interchangeable” with a biologic. We also need to have confidence that it is safe to prescribe the lower-cost alternative in place of the reference product and that switching back and forth between the 2 will not produce dangerous side effects or cause the drug not to work. 

The safety stakes are high and the ACR commends the FDA’s leadership in developing appropriate draft guidance that addresses 2 important issues:

The draft guidance would require manufacturers to use robust switching studies to determine whether alternating between a biosimilar and its reference product impacts drug safety or efficacy. Such studies are vital—they help deliver a clear understanding of what patients are likely to experience with changing formularies in a multi-payer, multi-state, and ever-changing market.

Access to, and trust in, the data from such studies will undoubtedly inform prescribing doctors’ treatment decisions and increase our confidence in switching a patient from a reference biologic to an approved biosimilar therapy.  As such, the ACR strongly advocates for data that are accessible on the interchangeable drug’s label via text or hyperlink. Moreover, we believe the FDA should require manufacturers to monitor the effects of biosimilars after they have been licensed for use. These data should then serve as the basis of any postmarketing labeling changes.

The ACR supports the FDA’s plan to use distinguishable and meaningful suffixes, which would help minimize the inadvertent or inappropriate substitution of biosimilars that have not been determined to be interchangeable. Distinct, memorable names and clear labeling is critical to decrease substitution errors and ensure pharmacovigilance. That’s why we believe the FDA can take even further steps to ensure clear labeling practices. 

Detailed labeling and dispensing guidance would help ensure that a drug’s status of interchangeability is visible to both doctor and patient. The ACR recommends that: 

Each biosimilar label indicate not only whether a drug is biosimilar 

Clinical data for biosimilars be included on FDA labels 

Specific guidance be adopted to prevent the inadvertent substitution of a non-interchangeable biosimilar.  

These steps would ensure that physicians and patients are fully informed.

The ACR is eager to see the draft interchangeability guidance finalized and that the FDA is given additional resources to hire experts, issue additional guidance, and expedite the review and approval of new biosimilar drugs. By continuing to emphasize safety and efficacy, the FDA will ensure that US patients reap the many benefits of biosimilars.

Biosimilar Interchangeability Draft Guidance Strikes the Right Balance Between Speed and Safety

Angus Worthing, MD, FACR, FACP, is a practicing rheumatologist at Arthritis & Rheumatism Associates in Washington, DC, and vice president of the Alliance for Transparent and Affordable Prescriptions, a coalition of patient and provider organizations working to lower prescription costs and make treatment more accessible.

Angus Worthing, MD, FACR, FACP

 that it plans to spin off Sandoz, its generics and biosimilars division, into a new publicly traded, standalone company.

In a statement, Novartis said the plan seeks “to maximize shareholder value by creating the number one European generics company and a global leader in biosimilars, allowing Novartis shareholders to participate fully in the potential future upside,” for both Sandoz and Novartis Innovative Medicines.

Sandoz will be incorporated in Switzerland and listed in Swiss Exchange, SIX, with an American Depositary Receipt (ADR) program in the United States, the statement said. Novartis officials said they expect the plan to be tax neutral; while subject to market conditions, tax rulings, and shareholder approvals, it is expected to be complete in the second half of 2023.

As a standalone company, Sandoz will be able to focus its existing biosimilars pipeline of more than molecules. In the statement, Novartis said it aims to become “a focused innovative medicines company with a stronger financial profile and improved return on capital.”

“Our strategic review examined all options for Sandoz and concluded that a 100% spinoff is in the best interest of shareholders,” said Joerg Reinhardt, Chair of the Board of Directors of Novartis, in the statement. “A spinoff would allow our shareholders to benefit from the potential future successes of a more focused Novartis and a standalone Sandoz, and would offer differentiated and clear investment theses for the individual businesses.”

Vas Narasimhan MD, CEO of Novartis, said, “For Novartis, the separation of Sandoz would further support our strategy of building a focused innovative medicines company, with depth in 5 core therapeutic areas, and strength in technology platforms. 

In addition, both companies would be able to focus on maximizing value creation for their shareholders by prioritizing capital and resource allocation, employing separate capital structure policies, and increasing management focus on their respective business needs.”

The 5 core therapeutic areas are hematology, solid tumors, immunology, neuroscience, and cardiosvascular medicine.

According to Novartis, Sandoz generated $9.6 billion in 2021 and served more than 100 markets globally, with a strong presence in Europe as well as in the United States. Sandoz plans to continue investment in the key biosimilars, antibiotics and generic medicines.

The move will create Europe's largest generics company.

Novartis to Make Sandoz a Stand-alone Company

The Center for Biosimilars

As the coronavirus disease 2019 (COVID-19) pandemic spreads, it will continue to affect the biopharmaceutical industry. Biosimilars are no exception, and the effect on their uptake and adoption will be multifaceted. Here are several ways that biosimilars are most likely to be influenced by COVID-19:

Inaccessibility of healthcare providers (HCPs) and other medical decision-makers:

 currently, COVID-19 is setting the priorities for most HCPs and hospital decision-makers: take care of affected patients, navigate the evolving COVID-19 coverage and payment landscape, and maintain an adequate supply of beds and personal protective equipment. During this time, institutions may lack the bandwidth to continue to evaluate complex biosimilar-related decisions and may stick to the status quo, the reference product, or the existing preferred biosimilar product until the dust settles. This will slow down biosimilar uptake across the board. As providers defer to their status quo therapy options to avoid unnecessary disruption, uptake of the 8 therapeutic oncology biosimilars 

 in the United States so far may be particularly hard hit.

Repurposed contracting and promotional activities: 

although many regular account manager activities have been disrupted by social distancing measures, contracting can be conducted effectively via digital media. This is especially true for biosimilar manufacturers with existing relationships or customers interested in immediate cost-saving opportunities who are not yet preoccupied with managing COVID-19. Many financial decision-makers (pharmacy directors, medical directors) are postponing contracting discussions. Account managers can now focus on bringing accounts on board for biosimilars and leave “pull-through” sales activity for later. Also, manufacturers that are preparing to launch biosimilars during this quarter or the next may decide to postpone marketing or do a soft launch, which would entail supplying product, leveraging digital or nonpersonal channels, and contracting via tele-detailing. This could affect biosimilars such as Merck's trastuzumab and bevacizumab biosimilars, Ontruzant and SB8, respectively, which are lined up for launch over the next 2 quarters.

COVID-19 is causing a dramatic mismatch of supply and demand that manufacturers are struggling to forecast. On the supply side, manufacturing and supply chain processes in hubs such as China, India, and the United States are being disrupted due to global lockdowns. On the demand side, conflated factors make demand difficult to predict. On one hand, patients delay seeking treatment, particularly for less convenient administration methods such as infusions, which can lead to lower patient volume and overall demand. On the other hand, stockpiling and demand for subcutaneous or oral formulations may cause a spike in demand for certain products despite decreasing patient volume. In February 2020, the FDA 

 the first case of a shortage of a drug due to coronavirus. Although all manufacturers are working to mitigate the risk of supply shortages, biosimilar manufacturers that rely on facilities in Europe and Asia may be particularly at risk on the supply side (

Delays in biosimilar approvals and clinical trials: 

most clinical trials are likely to be delayed due to challenges managing protocols, deprioritization in favor of more immediate acute care needs, and patients’ inability to travel to appointments. Beyond the logistics and prioritization challenges, manufacturers run the risk of trial participants contracting the disease, which leads to 

 on how to manage clinical trials during the pandemic. All of the above-mentioned complicating factors are likely to undermine Prescription Drug User Fee Act/Biosimilar User Fee Amendments dates for biosimilars with approval decisions scheduled by the end of 2020 (

Increased budget pressure can accelerate postcrisis biosimilar usage: 

Without a doubt, the current situation is putting significant budget pressure on the health system, with many providers 

 copays, coinsurances, and out-of-pocket costs due to COVID-19. Although the broader impact on the economy and health system is still unclear, what is certain is that after the crisis, providers will actively look for ways to compensate for the extra expense they are incurring now, and it will be more important than ever for biosimilars to deliver on their promise to bring savings to the healthcare system. In the meantime, it will be important to monitor what manufacturers of reference products and biosimilars do to help support providers as this situation evolves.

There are additional aspects of the pandemic that will affect both biosimilars and reference products alike, such as ensuring safe supplies of medicine in patients’ homes as we all observe social distancing. Patients, either on their own or in consultation with their HCPs, may start to make adjustments to treatment regimens to allow for less time in the hospital or the clinic, especially when it comes to biologics that suppress their immunity, as also recommended by 

Such recommendations, along with the already limited infrastructure, overburdened healthcare system, and social distancing policies will create a very difficult environment for biologics and biosimilars businesses in the short and medium term. However, companies can think strategically about how to create opportunities from these difficult circumstances, such as leveraging virtual technology for contracting discussions, stressing cost savings with cash-strapped customers, and improving patient-support wraparound services. These will help them set the stage for success in a post—COVID-19 world.

At the end of the day, the priority for everyone right now is protecting health and safety. Although biosimilar adoption and evolution to new treatment paradigms may stall, we firmly believe that health and safety are foremost in mind for providers everywhere.

Christina Corridon, MPH, MBA, is a principal in ZS’s Boston office and leads the firm’s biosimilar vertical. Scott Kniaz, MBA, is a strategy insights and planning manager in ZS’s Washington, DC, office. Will Gatziolis, MBA, is an associate principal in ZS’s New York office. Ross Shahinian is a strategy insights and planning manager in ZS’s New York office. Sandeep Sangwan, MPharm, is a knowledge management consultant in ZS’s New Delhi office.  All are key leaders in the ZS biosimilar vertical.

The coronavirus disease 2019 (COVID-19) effect on the biosimilar industry will be deep and lasting, causing not just approval and launch delays but profound structural changes in how business is done.
 

COVID-19's Multifaceted Effect on Biosimilars

Ross Shahinian

The rapid growth of prescription drug costs continues to be a great concern in health care. The increasing use of specialty drugs, which includes biologics and totaled $360 billion in 2019, is one of the main drivers of prescription drug spending in the United States.

 Biologics, used as primary treatment for various cancers and other serious conditions, represented only 2% of all US prescriptions in 2017, yet accounted for 37% of net drug spending.

Given the vast amount of health care resources consumed by biologics, biosimilars are increasingly gaining attention as a viable option. As stakeholders evaluate biosimilars and their promised benefits, here’s a look at what biosimilars are bringing to health care today and the progress made so far.

No Longer a Theory: Cost Reductions and Increased Access

Even though the US biosimilar market is still in the early stages, promising signs are emerging demonstrating that biosimilars can bring value to health care. The theory behind biosimilars is that, much like generic drugs, they promote competition by competing with reference biologics on price. This leads to lower prices, increasing access to life-saving drugs with minimized financial toxicity for patients.

Because US biosimilars are in their infancy, there are many unanswered questions. However, significant price reductions in the European Union were documented when biosimilars entered the market.

 Price reductions for epoetins in 2015 following biosimilar competition were substantial: 25% to 29% in Scandinavia, 39% in France, and 55% in Germany. Price reductions for the reference biologic and biosimilar filgrastim after the 2015 launch of a filgrastim biosimilar ranged from 14% in France to 27% in Germany.

 Because of the differences in market conditions, pricing, and governmental policies, the European data do not predict exactly what might happen in the United States. However, they do suggest price reductions in the same drug class can be expected as biosimilars are launched.

When the United States finally created the regulatory framework for biosimilars in 2009, the Congressional Budget Office estimated the sales-weighted market average discount on biosimilars would be 20% to 25% relative to reference agents―a high bar to reach, but hopefully one that is attainable.

The first US biosimilar, a granulocyte colony-stimulating factor (G-CSF) filgrastim, finally became available in September 2016, and data are clearly demonstrating significant cost savings. For example, for the fourth quarter of 2017, the payment limit for biosimilar G-CSF filgrastim was 28% lower than for filgrastim, based on CMS payment limits of average sales price (ASP) plus 6%.

Similar results have been demonstrated across The US Oncology Network, a network of more than 1350 independent physicians who deliver value-based cancer care in the community setting. The ASP trend for G-CSF biosimilars over a 3-year period clearly shows substantial cost savings compared with the reference product, based on CMS data for the Oncology Care Model (Figure 1).

The declining ASP trend for G-CSF over this same 3-year period resulted in a progressive increment in savings.

If the results seen so far in the United States and Europe hold true, as more biosimilars enter the US market, price reductions in the same drug classes will happen. Examples of this are already emerging. Commercial payers and pharmacy benefit managers in the United States are leveraging the competition from the few biosimilars in the market to negotiate lower prices on biologics in the same class and, in some cases, prefer one product over another.

The potential for biosimilars to deliver cost savings appears to be significant. The 

 utilized 2016 sales data from a large selection of biologic drugs to project potential savings from biosimilars over a 10-year period, concluding “…biosimilars would lead to a $44 billion reduction in direct spending on biologic drugs from 2014 through 2024, or about 4% of total biologic spending over the same period, with a range of $13 billion to $66 billion.”

 The study noted the savings potential will be affected by various evolving features, such as payment rates, litigation, competition, and interchangeability.

In addition to cost savings, biosimilars add value through increased access for patients. According to the European data, a substantial increase in use of therapeutic biologics and biosimilars occurred when a biosimilar entered the market, with the increase being attributed to reduced costs driven by competition.

An analysis for the Biosimilars Council projected 1.2 million US patients could gain access to biologics by 2025 due to increasing biosimilar availability.

Based on the data, women, lower-income patients, and the elderly would benefit more than others, although all individuals with health insurance would profit by having more treatment options.

Many originator biologics will lose exclusivity over the next 5 years, generating projected savings of $78 billion as biosimilars enter the market.

 As several long-awaited therapeutic biosimilars for cancer finally launch, patients will have more treatment options and the potential for more affordable care. However, these benefits will be realized only if more stakeholders embrace biosimilars.

Progress so far has been slow. For instance, it has taken 5 years for the first US filgrastim biosimilar, Sandoz’s Zarxio, to achieve a 32% market share.

 Unfortunately, biosimilars do not take off quickly, mainly because displacing products that are firmly entrenched in the market is not easy (Figure 2).

Those of us involved in biosimilar development, including the Center for Biosimilars®, are collaborating and working hard to drive better education for all stakeholders, especially physicians, because they play a key role in recommending and prescribing biosimilars for their patients. There is much work to be done, as demonstrated by a recent physician survey in which 74% of respondents indicated “physician confidence” was one of the biggest barriers to biosimilar adoption.

 It will be critical to help providers understand the vital role biosimilars can play in achieving success with value-based care. Even in the face of declining ASPs, providers can succeed in the value-based world by utilizing biosimilars that hold down costs while increasing access.

Preparedness Can Overcome Operational Hurdles

Successfully integrating biosimilars into a cancer practice requires careful preparation. This is especially critical for the therapeutic biosimilars that are now emerging, because they impact virtually all aspects of the practice. Strategies must be defined to ensure the delivery of high-quality care and operational efficiency. Practices can begin by examining various biosimilar brands and then refining their choices. Technology and workflow tools should be modified to minimize errors, and processes should be developed for updating providers and staff as the biosimilar market evolves.

Operational excellence and clinician and patient confidence can be achieved by developing strategies that integrate biosimilars with each phase of the patient journey, including diagnosis and treatment selection, insurance authorization, patient education, treatment scheduling, treatment admixture, and finally, treatment administration. Careful planning and execution of each phase will ensure a seamless patient experience, resulting in satisfied patients and secure reimbursement. It also is critical to educate all staff, including prescribers, revenue cycle employees, nurses, pharmacists and admixture personnel, so they understand the role they play in delivering quality care when a biosimilar is involved.

With health care transitioning away from fee for service—style practice, the future looks bright for biosimilars. Because they can increase access and decrease costs, biosimilars are poised to play a vital role in value-based care. As patients take on an increasing share of rising health care costs, biosimilars may become a valuable tool in minimizing financial toxicity while maintaining quality of care and stretching limited health care dollars. With the advent of coronavirus disease 2019, stakeholders may enthusiastically embrace biosimilars as they pursue ways to curb costs. Empowering the value biosimilars bring to health care just might be a big part of the solution everyone is seeking.

1. Statista. Prescription drug expenditure in the United States from 1960 to 2020. Accessed June 15, 2020. 

https://www.statista.com/statistics/184914/prescription-drug-expenditures-in-the-us-since-1960

2. Roy A. Biologic Medicines: The biggest driver of rising drug prices. 

https://www.forbes.com/sites/theapothecary/2019/03/08/biologic-medicines-the-biggest-driver-of-rising-drug-prices/#553ba24918b0

3. Patel KB, Arantes LH, Tang WY, Fung S. The role of biosimilars in value-based oncology care. 

4. Mulcahy AW, Hlavka JP, Case SR. Biosimilar cost savings in the united states initial experience and future potential. 

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6075809/

5. Biosimilars in the United States: Providing more patients greater access to lifesaving medicines. The Biosimilars Council. 2017. Accessed June 15, 2020. 

http://biosimilarscouncil.org/wp-content/uploads/2019/03/Biosimilars-Council-Patient-Access-Study.pdf

6. McGowan S. 5 years of biosimilars in the US: what have we learned? 

. January 29, 2020. Accessed June 15, 2020. 

https://pharmaphorum.com/views-analysis-market-access/5-years-of-biosimilars-in-the-us-what-have-we-learned/

Biosimilars Bring Value to Health Care

Tommy Pourmahram

Jim Hassard is a senior vice president at Coherus BioSciences. An experienced biopharmaceutical marketing executive, he has served in senior roles with Schering-Plough Canada, Amgen, and Medivation. Jim holds an MBA from Nova Southeastern University and a bachelor's degree in pharmacology from the University of Toronto.

Jim Hassard, MBA

Our health care spending as a country is more than any other country in the world (including all developed countries) both in total cost and on a per capita basis as well as percentage of gross domestic product. However, outcomes are not matched compared to spending and in some cases our health care system underperforms other countries.

In 2022, our health care spending rose to $4.5 trillion in health care and is projected to increase even further, to nearly $6 trillion in 2027.

 Rising health care costs not only poses a threat to sustainability, but also increases risk of outcomes due to increase in financial toxicity. The US biologics market has grown 12.5% annually on average over the last 5 years on an invoice-price basis, faster than nonbiologics. In 2021, the United States spent $568 billion on medicines including $260 billion on biologics. Spending on biologics comprise 46% of total pharmaceutical spending but only 2% of total prescriptions.

Thus, understanding and creating competitive markets in biologics would facilitate addressing multiple challenges emanating from ever escalating drug prices particularly in biologics market. Entry of biosimilars in 2015 in US health care (almost a decade after European Union in 2006) has a potential to save close to $181 billion provided appropriate assimilation through multiple tiers from manufacturers of biosimilars, smoother regulatory approvals, provider acceptance and payer and pharmacy benefit manager (PBM) cooperation.

Congress passed the Biologics Price Competition and Innovation Act (BPCIA) 2009, creating a pathway for biosimilars entry and approvals in the US. Biosimilars have no clinically meaningful differences in safety, purity, or potency. They must undergo the same rigorous standards set forth by the FDA for reference biologics. However, they have enormous potential to address financial toxicity at an individual level, insurance level and health care system level as whole. Biosimilar competition may help decrease reference product pricing. Due to archaic implementation system though it took almost 6 years from the passage of the BPCIA in 2009 the first biosimilar approval happened in 2015. Despite slower initial uptake, biosimilar launches in the last 5 years have generally been more successful than earlier. This fact raises hopes that savings and patient access could increase substantially.

While uptake of biosimilars has not been equal amongst all specialties, oncology has led the adoption of biosimilars the most. Pegfilgrastim and epoetin alfa biosimilars, both launched in 2018, have seen moderate uptake achieving 37% share of molecule volume in the first 3 years. Pegfilgrastim biosimilar share has continued to rise slowly. The 3 other molecules with biosimilar launches in 2019—bevacizumab (82%), trastuzumab (80%), and rituximab (67%)—achieved significant uptake within the first 3 years. Oncologists have paved the way for successful integration of biosimilars.

In 2023, a major shift happened in the biosimilars market with the launch of the biosimilars for some of the most widely used drugs in the world. It is well documented that biosimilars can dramatically reduce health care costs. Savings from biosimilar adoption could range from $38.4 billion to $124.5 billion from 2021 to 2025, according to a 2022 study.

 Biosimilars cost an average of 30% less than reference biologics—a critical factor given that biologics represent 2% of all US prescriptions but nearly 40% of net drug spending.

However, despite huge success in the oncology biosimilars arena, the adoption of biosimilars in other medical specialties has not been a huge success. Infliximab has seen the lowest adoption of biosimilars, with volume share at 3% after 1 year and rising slowly to 13% after 3 years.

The introduction of lower cost biosimilars has led to declines in overall molecule costs per unit of biologic and/or biosimilar. This has over time, driven down costs for originators as well.

Biosimilars were one of the first realistic alternatives that would allow the provision of appropriate affordable care to tens of millions of Americans in multiple ways from reducing out-of-pocket costs to impacting financial toxicity in a positive way. We all have a collective responsibility of embracing, adapting, and administering biosimilars to address issues from the ecosystem level, from the individual patient to the health system across the country.

As we continue to see widening gaps in access to care increasing risks to bankruptcies due to debts arising out of medical care, innovative approaches for acceptance, assimilation, and adoption of biosimilars is a must to reduce disparities. Financial toxicities are very well recognized cause of adverse outcomes where a patient may prefer food over expensive drugs. Biosimilars offer a realistic option at multiple levels as a solution.

Unlike Europe, where biosimilars were first approved in 2006 and have become a household entity, entry, introduction, and assimilation of biosimilars in the therapeutic armamentarium has not been without challenges. First, even after passage of BPCIA it took almost 5 years to introduce the first biosimilar. Then there was a struggle between biosimilars and biologics where a legislative push took place to lump all biosimilars in one J code (which would have led to downward spiral of average sales price eventually triggering premature failure).

I was very heavily involved in supporting biosimilars as chairman of biosimilars committees for Community Oncology Alliance and the Association of Community Cancer Centers. I reached out to the Office of Management and Budget Office under Director John Michael "Mick" Mulvaney and the White House office supporting initiative to create unique Q codes which eventually happened. Then, I took a personal initiative to start writing, publishing, and educating my colleagues about the role of biosimilars at individual level and in value-based care.

While Medicare beneficiaries with cancer and supportive drugs in cancer saw quick uptake reducing out-of-pocket costs, with rising number of beneficiaries who are now on Medicare Advantage plans and Managed Care Organizations managing Medicaid Benefits, have not yielded full benefit of adoption of biosimilars due to some of occult policies by the PBMs advising insurance plans. PBMs have started creating favorites and preferred lists, restricting coverage to 1 biosimilars (and frequently, the most expensive) placing unnecessary burden on providers to succumb to pass on higher out-of-pocket costs to consumers and patients once again risking financial toxicities. Nevertheless, hope is eternal and eventually payers and law makers will realize the obstacles to fair and just place for biosimilars in day-to-day use and unfair practices will be corrected.

CMS. National Health Expenditures: 2022 Highlights. 2023. Accessed March 1, 2024. https://www. cms.gov/files/document/highlights.pdf

2)Biosimilars in the United States 2023-2024: Competition, savings and sustainability. IQVIA. January 31, 2023. Accessed March 1, 2024.

3) Mulcahy A, Buttorff C, Finegold K, et al. Projected US savings from biosimilars, 2021-2025. 

. 2022;28(7): 329-335. doi:10.37765/ajmc.2022.88809

4) New Report finds biosimilars could save states billions of dollars annually. Biosimilars Forum. October 2021. Accessed March 1, 2024. 

https://biosimilarsforum.org/2021/10/13/new-report-finds-biosimilars-could-save-states-billions-of-dollars-annually/

5)HHS Inspector General report: Biosimilars could generate significant Medicare Part D savings. Biosimilars Forum. March 2022. Accessed March 1, 2024. 

https://biosimilarsforum.org/2022/03/31/hhs-inspector-general-report-biosimilars-could-generate-significant-medicare-part-d-savings/

Kashyap Patel, MD, CEO of Carolina Blood and Cancer Care, a member of the Community Oncology Alliance, and member of The Center for Biosimilars® Advisory Board, glances back at the development of the biosimilar industry and the last 5 years of progress.

The Role of Biosimilars: Advancing Access, Financial Health, and System Sustainability

Kashyap Patel, MD, is the managing partner at Carolina Blood and Cancer Care and has been with them since its inception in 2004. Dr Patel received his medical degree from Thomas Jefferson University Hospital, has authored several research articles regarding melanoma, and is board certified in hematology, oncology, and internal medicine.

Kashyap Patel, MD

The Senate voted 94-5 in favor of the 21st Century Cures Act, the sweeping bill that will fund National Institutes of Health research, mental illness and substance abuse treatment, and FDA reform. Senator Lamar Alexander, R-Tennessee, called the bill’s passage “a Christmas miracle…that will help virtually every American family.”

The legislation now heads to President Barack Obama, who has vowed to sign it into law as soon as it reaches his desk.

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