After the Association for Accessible Medicines’ (AAM’s) Access! 2019 annual 

 came to a close last week, The Center for Biosimilars

 spoke with Christine Simmon, senior vice president of policy and strategic alliances, AAM, and executive director, AAM’s Biosimilars Council, to get her take on some of the outcomes of the meeting.

“I think one of the biggest takeaways from the meeting was the continuing importance of biosimilars. Of course, we had a dedicated biosimilars session, but biosimilars really came up in every session, and I thought that was very telling,” said Simmon.

The biosimilars session she referenced included a panel during which various biosimilar stakeholders and industry experts discussed how to identify and address “biosimilar shenanigans.” The opening presenter of the session, Carol Lynch, president of Sandoz US and head of North America, explained that data show that if all FDA-approved biosimilars had been marketed in a timely manner, Americans could have saved $4.5 billion.

Simmon touched upon this issue as well, stating that “There are significant concerns about the viability and ultimately the sustainability in the [United States].” Interestingly, Simmon noted that in her own discussions with meeting attendees, she “heard recognition from more people that the European successes around biosimilars—which are still very praise worthy&mdash;is evolving there to a sustainability issue as well.” She stressed that while the US biosimilar market has not nearly reached its peak, stakeholders need to start planning ahead for the sustainability of the market.

The importance of the biosimilars market, as well as the savings it could achieve for patients, was referenced also in the closing keynote address delivered by HHS Secretary Alex Azar. “Biologic drugs, today, represent almost 40% of prescription drug spending. The challenges are real, but so is the potential for competition and savings. Imagine doing to 40% of the pharmaceutical market just some fraction of what generics have already done to the other 60%,” said Azar. He went on to discuss how he intends to achieve these savings and increased uptake in biosimilars: pharmacy-level interchangeability.

Simmon explained that interchangeability has been a hot topic for AAM’s Biosimilars Council, too. “A major focus area for the council is educating around interchangeability and misinformation. Not even so much how to do interchangeability, but to some degree, I guess you could say the interplay between interchangeability designations and market uptake,” she said. “It’s another misconception—and we’ve heard this misconception among payers and physicians as well&mdash;that they’re waiting for interchangeability to really get on board with biosimilars.”

FDA has been working on finalizing a guidance around interchangeability and how biosimilar developers can achieve the designation. The guidance is expected to be released in the upcoming months.

After the Association for Accessible Medicines’ (AAM’s) Access! 2019 annual meeting came to a close last week, The Center for Biosimilars® spoke with Christine Simmon, senior vice president of policy and strategic alliances, AAM, and executive director, AAM’s Biosimilars Council, to get her take on some of the outcomes of the meeting.

AAM's Christine Simmon on Biosimilars Council Initiatives and Educating Around Interchangeability

Samantha DiGrande

Chad Pettit, MBA, is the executive director of global value access and policy for Amgen’s Biosimilars Business Unit. He develops global market access launch strategy for Amgen’s portfolio of 10 biosimilar medicines and leads on biosimilar policy matters in a new and rapidly growing segment of the industry. With his global perspective, Pettit is recognized as an expert on biosimilar commercialization and market access for biosimilars and the policy measures required to facilitate cost savings to patients and the healthcare system.

Chad Pettit, MBA

Rituximab induction therapy has the highest probability of cost effectiveness in treating newly diagnosed patients with asymptomatic advanced follicular lymphoma, according to a study published in the 

The researchers estimated the cost-effectiveness of an active treatment strategy with rituximab to watchful waiting. While a previous study analyzed treatment choices in the Canadian health care system, this is the first known UK model that investigates treatment approaches.

Patients included in the study had asymptomatic follicular lymphoma and were deciding between active treatment utilizing rituximab or watchful waiting. If a patient experienced a relapse after active treatment, then he or she would be given another chemotherapy regimen with or without rituximab or an autologous transplantation. A randomized trial of the 3 treatment choices demonstrated no significant difference in survival rates.

Watchful waiting, rituximab induction, and maintenance costs were estimated using dosages and unit costs from the British National Formulary (BNF). Patients who chose watchful waiting—54%&mdash;required new treatment within 3 years. Patients treated with rituximab induction had an 11% chance of needing continued treatment after 3 years, while 19% of patients who received induction with rituximab followed by maintenance needed new treatment after 3 years. Annual recurrence rates were converted to 22.8%, 6.7% and 3.9%, respectively.

At follow-up visits, patients underwent physical examinations in which clinicians assessed symptoms and performed tests, such as a full blood count, liver and renal function assessment, and immunoglobin profile. Patients who experienced a recurrence were generally treated with immunochemotherapy. Costs for these tests and procedures were sourced from the National Health Service Reference costs.

Quality of life was measured based on an unpublished Oxford Outcomes study used in the National Institute for Health and Care Excellence (NICE) technology. The researchers assumed that there was no quality of life benefit for patients using watchful waiting compared to rituximab treatment, as it is potentially beneficial to treat the disease than wait for symptoms to arise.

The data show that rituximab induction alone is the most cost-effective approach in treating asymptomatic follicular lymphoma. While treatment outcome was improved when induction of rituximab was paired with rituximab maintenance, the value of the treatment was worth less than the cost. Watchful waiting was deemed the least cost-effective approach in treating advanced follicular lymphoma.

Some study limitations that the authors noted include the uncertainty around treatment in subsequent therapy lines, the unpublished quality of the life study on which researchers formed their model, and the unmeasured cost of possible reduced immunoglobulin levels in a patient when treated with rituximab.

“The results of the base case analysis suggest that rituximab induction alone is the most cost-effective strategy to adopt in patients with asymptomatic follicular lymphoma,” the 

. “This result was shown to be robust in [1]-way and probabilistic sensitivity analyses.”

Prettyjohns M, Hoskin P, McNamara C, et al. The cost&#8208;effectiveness of immediate treatment or watch and wait with deferred chemotherapy for advanced asymptomatic follicular lymphoma. 

. 2018;180(1):52-59. doi: 10.1111/bjh.14990.

Rituximab induction therapy has the highest probability of cost effectiveness in treating newly diagnosed patients with asymptomatic advanced follicular lymphoma, according to a study published in the British Journal of Haematology.
 

Rituximab Induction Is Cost Effective for Asymptomatic Advanced Follicular Lymphoma

Kaitlynn Ely

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

, the US Senate made Robert F. Kennedy Jr the nation’s top health official as secretary of HHS.

 The vote comes after intense confirmation hearings and tense committee votes in which it appeared some Republicans were struggling with the choice, but the majority party has now thrown their support behind the longtime vaccine skeptic, critic of processed foods, and initiator of the Make America Healthy Again agenda.

The lone Republican holdout was Sen Mitch McConnell (R, Kentucky), a polio survivor who has taken issue with Kennedy’s decades of opposition to vaccines. McConnell has also voted against confirming some other nominees in the new administration, including Tulsi Gabbard as director of national intelligence and Pete Hegseth to lead the Department of Defense.

President Donald Trump’s initial announcement of Kennedy as his pick to lead HHS was met with both 

 Proponents are enthusiastic about his pledges to promote healthier foods, tackle pollution, address root causes of chronic disease, and ban prescription drug ads. Mainstream public health voices, however, have raised concerns about his long history of false statements about vaccines and touting of raw milk and unproven COVID-19 “cures.”

After a rocky path to confirmation, the Senate on Thursday made Robert F. Kennedy Jr the nation’s top health official as secretary of HHS. | Image credit: Lila Patel - stock.adobe.com

The path to Kennedy’s confirmation was rocky, with Democrats drawing attention to his 

, which included stakes in lawsuits against vaccine makers including Merck.

 He resigned from his nonprofit, Children’s Health Defense, which is known for its antivaccine efforts, and during the confirmation hearings agreed to 

 in fees from litigation against Merck over the human papillomavirus vaccine.

, Kennedy maintained that he is not antivaccine, but rather calling for greater transparency around the safety and effectiveness of vaccines.

 Still, he pushed back on widely accepted meta-analyses that show the safety of vaccines and instead cited papers with 

 purporting to show associations between vaccines and neurodevelopmental disorders.

 during his hearings also garnered criticism.

 He acknowledged not yet having a specific plan for aligning Medicare and Medicaid funding structures, and at times appeared to 

, including making the incorrect statement that Medicaid is “fully paid for by the federal government.”

 He also painted a picture of Medicaid as having premiums and deductibles that are too high; premiums and deductibles are 

 although enrollees report barriers to accessing care, such as 

Both Democrats and Republicans took issue with Kennedy’s shifting stances on abortion, which were rehashed throughout the confirmation hearings.

 Democratic senators brought up that as recently as March 2024, he had said he supported a woman’s right to choose abortion “throughout the pregnancy,” and accused him of ceding his beliefs for political gain. Meanwhile, some conservatives including former Vice President Mike Pence aimed to 

 but Republican senators largely did not press the issue during the hearings. When questioned about abortion by Democrats, Kennedy 

: “I agree with President Trump that every abortion is a tragedy. I agree with him we cannot be a moral nation if we have 1.2 million abortions a year. I agree with him that the states should control abortion.”

During the hearings, Sen Bill Cassidy (R, Louisiana) asked Kennedy tough questions about his history of vaccine skepticism and embrace of flawed science claiming links between vaccination and autism.

 Cassidy, a physician, admitted that he was grappling with whether to advance Kennedy’s nomination, but ultimately decided to 

 to the full Senate vote, stating, “With the serious commitments I’ve received from the administration and the opportunity to make progress on the issues we agree on, like healthy foods and a pro-American agenda, I will vote yes.”

Now, with Kennedy officially confirmed to head HHS, he will be handed a portfolio of thorny issues ranging from compliance with 

 to overseeing the administration’s policies on 

 and more. His tenure as HHS secretary portends a status quo shakeup that will be closely watched by both sides of the aisle.

US Senate 2025-02-13. C-Span. Accessed February 13, 2025. 

https://www.c-span.org/event/us-senate/us-senate/430935

Joszt L. Support and skepticism emerge as reactions to Robert F. Kennedy Jr’s HHS nomination. 

. November 15, 2024. Accessed February 13, 2025. 

https://www.ajmc.com/view/support-and-skepticism-emerge-as-reactions-to-robert-f-kennedy-jr-s-hhs-nomination

Bonavitacola J. Kennedy reveals key decisions in ethics report as confirmation hearing looms. 

. January 23, 2025. Accessed February 13, 2025. 

https://www.ajmc.com/view/kennedy-reveals-key-decisions-in-ethics-report-as-confirmation-hearing-looms

Jewett C, Craig S. Kennedy says he will not keep fees from HPV vaccine litigation. 

. January 30, 2025. Accessed February 13, 2025. 

https://www.nytimes.com/2025/01/30/health/rfk-jr-hpv-vaccine-lawsuits-fees.html

Steinzor P. 5 key takeaways from RFK Jr’s confirmation hearings. 

. January 31, 2025. Accessed February 13, 2025. 

https://www.ajmc.com/view/5-key-takeaways-from-rfk-jr-s-confirmation-hearings

Steier J. Anatomy of a failure: why this latest vaccine-autism paper is dead wrong. Unbiased Science. January 25, 2025. Accessed February 13, 2025. 

https://theunbiasedscipod.substack.com/p/anatomy-of-a-failure-why-this-latest

Grossi G. RFK Jr fails to offer a clear Medicaid, Medicare strategy. 

. January 29, 2025. Accessed February 13, 2025. 

https://www.ajmc.com/view/rfk-jr-fails-to-offer-a-clear-medicaid-medicare-strategy

Cost sharing. Medicaid.gov. Accessed February 13, 2025. 

https://www.medicaid.gov/medicaid/cost-sharing/index.html

Hest R. Assessing physician acceptance of Medicaid patients using State Health Compare. State Health Access Data Assistance Center. August 25, 2022. Accessed February 13, 2025. 

https://www.shadac.org/news/14-17-physician-Mcaid-SHC

Stolberg SG. Pence wages lonely crusade against Kennedy as abortion opponents avoid fight. 

. January 24, 2025. Updated January 31, 2025. Accessed February 13, 2025. 

https://www.nytimes.com/2025/01/24/us/politics/pence-kennedy-abortion.html

Watch: ‘every abortion is a tragedy,’ RFK Jr says. PBS. January 29, 2025. Accessed February 13, 2025. 

https://www.pbs.org/newshour/politics/watch-every-abortion-is-a-tragedy-rfk-jr-says

Munz K. RFK Jr confirmation for HHS secretary advances to full Senate after committee votes. 

. February 4, 2025. Accessed February 13, 2025. 

https://www.ajmc.com/view/rfk-nomination-advances-to-full-senate

Grossi G. FDA quietly removes draft guidance on diversity in clinical trials following executive order on DEI. 

https://www.ajmc.com/view/fda-quietly-removes-draft-guidance-on-diversity-in-clinical-trials-following-executive-order-on-dei

Bonavitacola J. Americans claim health care access is top priority in public health. 

. February 6, 2025. Accessed February 13, 2025. 

https://www.ajmc.com/view/americans-claim-health-care-access-is-top-priority-in-public-health

Steinzor P. Trump reverses some Biden drug pricing initiatives, potentially impacting Medicare costs. 

. January 22, 2025. Accessed February 13, 2025. 

https://www.ajmc.com/view/trump-reverses-some-biden-drug-pricing-initiatives-potentially-impacting-medicare-costs

Klein HE. FTC report highlights prescription drug price markups by PBMs. 

. January 14, 2025. Accessed February 13, 2025. 

https://www.ajmc.com/view/ftc-report-highlights-prescription-drug-price-markups-by-pbms

The Senate voted 52-48 to confirm Robert F. Kennedy Jr as secretary of HHS, setting up the vaccine skeptic to carry out major changes in pursuit of his Make America Healthy Again agenda.

Robert F. Kennedy Jr Confirmed as HHS Secretary, Nearly Along Party Lines

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.

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