Tony Hagen is senior managing editor for The Center for Biosimilars

Editor's note: This is part 1 of a series on biologics patents and biosimilars.

The biosimilars pathway in the Biologics Price Competition and Innovation Act (BPCIA) was created to address the needs of biosimilar applicants and speed their products to market for the benefit of patients, but is the pathway working?

Panelists at the Festival of Biologics USA meeting said some tinkering may be necessary to optimize the patent resolution process (aka patent dance) in the BPCIA, particularly when it comes to understanding processes and intellectual property related to manufacturing.

The BPCIA was created in 2010 by legislative fiat, but “whether it’s working or not depends on what expectations you have of the system and how you expected it to work over time,” said Hans Sauer, vice president for Intellectual Property at the Biotechnology Innovation Organization. “The BPCIA as it’s currently interpreted and implemented is perhaps not quite what I and others expected when it was first passed.”

Compared with the 1984 Hatch-Waxman Act for simple molecule chemical compounds (generics), there are more moving parts to the BPCIA. During the patent dance, biosimilar developers and originator companies come to the fence to decide where potential intellectual property infringements may occur and attempt to resolve those issues prior to the biosimilar being launched. It’s one of the vital organs of the BPCIA.

“The patent dance is working for people who chose to use it, right? And it’s not working if litigants make different choices. Does that mean it’s a train wreck? I don’t know,” Sauer said. “I think we see a greater diversity of corporate behavior, of litigation behavior, than certainly what we see in the small molecule space. If you have an expectation that this is supposed to work like the Hatch-Waxman system for small molecules, it does not. It’s certainly working for litigants who have come out on top and who end up getting out of the system what they want, but for the other guys, it’s usually not working.”

The beauty of the patent dance is its flexibility, said Timothy “Tim” J. Shea Jr, biotechnology intellectual property expert and director of Sterne Kessler Golstein and Fox of Washington, DC. “It’s not a one-size-fits-all, as maybe we are more likely to see under Hatch Waxman, and so we see a lot of different strategies in terms of the patent dance and other aspects of the statute.” The BPCIA allows biosimilar applicants to choose the order of battles that are most important to them. “If there are certain patents that are going to drive the decision of whether to launch or when to launch, being able to focus on those early on, I think, is very positive,” he said.

But would more information on manufacturing patents and processes, disclosed earlier, help biosimilar applicants get more products to market faster and with less trouble? Legislation has been drafted to prompt more disclosure from reference product manufacturers to improve clarity and, ultimately, to make the marketplace more competitive. And in December 2020, the Biological Product Patent Transparency Act was signed into law, requiring originator product companies to promptly share relevant patent information with the FDA. Starting in June 2021, this disclosed information would automatically be entered in the Purple Book reference guide for the biologics industry.

However, the risk is that manufacturers burdened with greater disclosure requirements would be fearful of sharing manufacturing secrets and become less willing to innovate, panelists said. “These innovations are extremely valuable, not just to the biosimilar applicant but to the whole industry, and we want to encourage that,” Shea said. “I don’t like the idea of a kind of a draconian provision that just says all this must be disclosed.”

It’s also possible that disclosure requirements could make the process more confusing for the originator product companies, besides too revealing, Sauer said. “If I sit on a portfolio of alternative resins for chromatography columns, columns for purification, or alternative cell culture media that could be used, or others, which do I disclose? The ones that I use may not be the ones the biosimilar company ends up using."

Legislation has raised the specter that companies that fail to sufficiently disclose the patents they hold may lose the right to enforce those patents in the event of infringement. “List it or lose it propositions that we’ve seen throughout these bills have been our greatest concern,” Sauer said. Another reason originator manufacturers may be leery of disclosure laws is that the intellectual property may pertain to multiple products the company produces. Revealing information about one product may compromise another.

One way to enhance the information exchange might be to start the patent discussion earlier in the application process, even several years before anticipated approval and launch of a biosimilar, said Bruce Leicher, moderator of the panel and a strategic law advisor and adjunct processor in Biotechnology Law at the University of New Hampshire Franklin Pierce School of Law.

For that to work, the timing has to be right, said panelist David Korn, vice president of Intellectual Property and Law with PhRMA, a pharmaceutical industry trade association. “Is it that, at some point, it becomes too early to actually engage the full process and the back and forth, and if there are any changes after that, then it would seem like the whole thing needs to be restarted in order to get a true picture of the patents that are relevant to that particular biosimilar.”

Shea agreed that the timing should be worked out so that discussions over intellectual property occur when it’s relevant to have them. “I think you do want to be at a point where the process is fixed enough that it just really makes sense, otherwise it opens up all sorts of cans of worms in terms of being premature.” But an earlier discussion of relevant patents has the potential to “reduce the surprise element for the biosimilar applicant,” he said.

Ultimately, biosimilar developers ought to have a good sense of what information is needed to understand where infringements may lie, Sauer said. After all, they have developed their own manufacturing processes by the time they apply to the FDA for approval. “To my mind, the biosimilar developer is best positioned to know what to look for in the published patent literature and published application literature,” he said. 

“Why is it that we so persistently hear concern about the uncertainty that’s being caused by manufacturing patents?" he asked. "Is it that manufacturers keep getting new patents to improve manufacturing technology that pop out of the system when it’s too late? Is it that biosimilars are genuinely locked into a limited range of technologies, and they discover that all of this ends up being patented by someone?”

Articles

Festival of Biologics

More disclosures, earlier in the biosimilar application process, might lead to more competition in biologics, but panelists said this could go too far.

Panel: Should Biologics Manufacturers Have to Disclose More About Their Patents?

Investigators found inferior persistency among patients who used biosimilar vs originator forms of infliximab (Remicade) and epoetin alfa (Epogen/Procrit), although they said adherence was superior among patients on biosimilars included in the study, according to a poster presentation at AMCP 2021.

Investigators conducted a retrospective study using patient information culled from the Optum specialty pharmacy database, representing a 2-year period from January 2018 to December 2019. Investigators defined persistency as “continuation of treatment for the prescribed period” and adherence as the patient acting in accordance with prescription intervals and prescribed dosage.

The percentage of patients who remained on biosimilar infliximab dipped below 20% by the fifth prescription fill, whereas the percentage who remained on the originator product remained above 20% by at least the ninth fill, according to study authors.

The percentage who remained on epoetin alfa biosimilars dipped below 40% around the third fill, whereas patients on the originator did not dip below the 40% line until the fifth fill.

For patients treated with filgrastim and pegfilgrastim biosimilars, the persistency curves were slightly inferior to originator persistency, although these differences were not considered statistically significant. “Patients in reference drugs had higher persistence at every fill compared to biosimilars. However, significant difference in persistency was seen only between the Remicade and Epogen/Procrit groups,” the authors wrote.

However, when it came to adherence, patients in all therapy groups studied adhered better to biosimilars than reference products and had lower out-of-pocket costs if they used biosimilars, the authors wrote.

For example, adherence for patients on Inflectra and Renflexis, both biosimilars of Remicade, had 93% vs 90% adherence, respectively. The comparable figures for patients on filgrastim biosimilar (Zarxio) vs originator (Neupogen) were 81% and 60%; pegfilgrastim biosimilar (Udenyca, Fulphila) vs Neulasta, 93% vs 86%; and epoetin alfa biosimilar (Retacrit) vs originator (Epogen/Procrit), 88% vs 83%.

The largest per-fill out-of-pocket differences were seen for filgrastim biosimilars vs filgrastim originator ($102 vs $383) and pegfilgrastim biosimilars vs originator ($79 vs $376).

A higher incidence of adverse events was reported for patients on biosimilars for all groups except pegfilgrastim; however, investigators said they were unable to evaluate or categorize adverse events according to severity.

“The findings of this study reflect the positive real-world implications of utilizing biosimilars from a cost-adherence standpoint,” the authors wrote.

The data from the study were obtained from Optum and Avella Specialty Pharmacy, which was acquired by Optum in 2018. “Data collected from only 1 specialty pharmacy may not represent the general population in the United States,” investigators said.

Shah K, Lawler L. Real world evidence: impact of biosimilars on patient outcomes at a specialty pharmacy. Presented at: AMCP 2021; April 12-16, 2021. Accessed April 19, 2021. https://amcpannual2021.pathable.co/organizations/Yxzi8AFuWFPvqnPR2#/?limit=10&sortByFields[0]=isPinned&sortByFields[1]=lastActivityAt&sortByOrders[0]=-1&sortByOrders[1]=-1&uid=pAcLoMw6BXog7ypr6

AMCP: Academy of Managed Care Pharmacy

Weaker persistency and strong adherence were observed among patients taking biosimilar forms of epoetin alfa and infliximab, among others.

Study: Investigators Report Superior Adherence, Savings for Biosimilars

Magellan Rx Pharmacists Discuss Why All Biosimilars Are Not Added to Formularies 

Magellan Rx Pharmacists: Why Payers Should Be More Invested in Promoting Biosimilars

Magellan Rx Pharmacists: Current Biosimilar Market Trends in Oncology

Magellan Rx Pharmacists: What Disease States Have Better Biosimilar Uptake?

Magellan Rx Pharmacist: How to Encourage Payers to Prefer Biosimilars

Magellan Rx Pharmacists: Which Formulary Placement Is Most Beneficial for Biosimilar Uptake?

Magellan Rx Pharmacist: What Is the Cure for Rebate Addiction?

Magellan Rx Pharmacists: What the US can Learn from Europe's Biosimilar Industry

Magellan Rx Pharmacists: What Can Payers Do to Boost Biosimilar Uptake?

Magellan Rx Pharmacist: Cost Savings Potential if Oncology Biosimilar Utilization Increased

Videos

Rebecca Borgert, PharmD, BCOP, and Jim Rebello, PharmD, from Magellan Rx Management talk about how market trends, payer formulary decisions, and international successes are shaping today's biosimilars industry.

Magellan Rx Pharmacists Explore the Payer Perspective on Oncology Biosimilars

Using commercial and public payer data, investigators observed that payer utilization management policies such as step therapy contributed to a sizeable movement toward biosimilar use, according to a poster presentation at AMCP 2021.

“Payers equipped with proactive utilization management strategies for oncology biosimilars were able to capitalize on early utilization shifts to the less expensive biosimilar products,” the authors concluded.

They conducted a retrospective claims analysis for patients with cancer enrolled in commercial and Medicare plans between June 2019 and June 2020. They evaluated the transition to biosimilars from 3 originator products Avastin (bevacizumab), Herceptin (trastuzumab), and Rituxan (rituximab).

The authors of the study also found that, in some cases, physicians were ahead of the curve in prescribing biosimilars and switching patients from originator products to biosimilars, meaning payer coverage preferences did not force them.

Additionally, physicians in private practices were twice as likely to independently switch patients to biosimilars than their counterparts in outpatient hospitals (279 vs 131 switches, respectively, for 5374 prior authorizations).

The study also included a model of savings that could be achieved from biosimilar use based on the utilization and pricing data included. For example, use of originator bevacizumab was associated with an extra $35.6 million in spending compared with use of bevacizumab biosimilars, based on overall costs of 20,076 claims.

The comparable excess spending for trastuzumab originator was $11.7 million for 25,511 claims and $19.9 million for rituximab originator based on 9275 claims.

However, they cautioned that “true savings” could not be determined because variable rebate arrangements between payers and manufacturers made it challenging to calculate.

The study evaluated formulary policies across 16 commercial and 12 Medicaid Advantage plans, and investigators said 30% of those plans had policies that preferred biosimilars, 4% of them had non-preferred coverage, meaning originator biologics had to be used first, and 66% covered biosimilars and originators equally, or “on par.”

Biosimilar utilization actually surpassed the use of innovator brands by the first quarter of 2020 (51%), roughly half a year after the beginning of the study period.

Fowler A, Borgert R, Polson M, et al. The emergence of therapeutic oncology biosimilars: payer’s perspective. Presented at: AMCP 2021; April 12-16, 2021. Accessed April 15, 2021. https://amcpannual2021.pathable.co/organizations/AETMfk4CdeFgWTR4v

Study authors measured savings, conversions to biosimilars, and payer policies for 3 originator brands 

Study: Step Therapy Contributes to Biosimilar Utilization 

A New York state Medicaid biosimilar preference initiative was successful in significantly boosting biosimilar use over 2019, according to a poster presentation at AMCP 2021.

For example, from the second to fourth quarters of 2019, the total percent utilization of infliximab (Remicade) biosimilars went from 59% to 78%; filgrastim (Neupogen), 87% to 94%; pegfilgrastim (Neulasta), 70% to 89%, and epoetin alfa (Epogen), 51% to 86%, investigators said.

Although they are as safe and efficacious as originator brands, and often cheaper, biosimilars in New York state cannot be automatically substituted at the pharmacy counter for originators, so provider prescriptions are required for them to be used. It was therefore necessary to bring providers on board with the biosimilar preference plan to get them to help make the conversion to biosimilar use, the investigators said.

The state Medicaid plan launched a concerted effort 6 months prior to launch of the plan to communicate with providers and share information on biosimilar equivalence to reference products. In addition, a pharmacy team reached out to providers to promote the authorization of biosimilar use among plan beneficiaries who were already receiving originator biologics.

According to the poster information provided, use of the 4 originator drugs was at or close to 100% of total utilization prior to the start of the program in the first quarter of 2019. Use of all originator brands dropped below 25% of total utilization by the fourth quarter of 2019. Conversely, biosimilar use for these 4 drug types exceeded 75% of total utilization by the end of that year.

The year-long rise in biosimilar use was steep, not gradual. Biosimilar use as a percent of total utilization exceeded 50% by the second quarter of 2019, investigators said.

“The upward trend in the utilization of the biosimilar vs reference products show that a provider-focused strategy with a phased approach was successful,” the study authors said.

Among the strategies employed to make the biosimilar promotion plan successful were not only provider outreach and communication, but also the establishment of biosimilar preferences in clinical criteria and reconfiguration of the medical and pharmacy benefit. As part of the latter, coding was adjusted to reflect biosimilar preferences and formulary documents and authorization grids were updated.

The outreach effort included communications to 1560 hematologist/oncologists, 378 rheumatologists, 1498 gastroenterologists, 823 nephrologists, and 805 dermatologists. A retrospective claims analysis was used to determine how rapidly the conversion from reference products to biosimilars occurred.

Explaining the desire to switch to lower-cost biologics, such as biosimilars, the authors wrote that although biologics are valuable for treatment of patients with complex and chronic health conditions, “these medicines come with a high cost, creating challenges for both the patient and the payer.”

Huang D, Sikder A, Banbaji F, Felton C, Patel A, Moncayo E. Conversion from the reference product to the biosimilar: experience of a New York state Medicaid plan. Presented at: AMCP 2021; April 12-16, 2021. Accessed April 14, 2021. https://amcpannual2021.pathable.co/organizations/DgLQkoXaW5MohLp7H#/?

New York Medicaid achieved 78% to 94% biosimilar utilization for 4 originator brands during a focused effort in 2019. 

New York Medicaid Ramps Up Biosimilar Use

Based on the success of a biosimilar switching program, Nedzad Pojskic, PhD, MSc, vice president of Pharmacy Benefits Management for Green Shield Canada, detailed why payers should become bigger advocates for biosimilar uptake, at the Festival of Biologics USA meeting.

Canada ranks third in the world in per capita spending on drugs ($1012 vs $1324 in Switzerland and $1457 in the United States), he said, explaining the need for biosimilar savings.

“I think it's really important to recognize that as payers in this country, we have to be explicit around being leaders in educating various stakeholders, whether they be physicians, other sorts of players in the system, patients, or those in leadership roles, to support a viable biosimilar market and to move forward,” said Pojskic.

 have begun executing biosimilars switching initiatives, Pojskic noted that Green Shield Canada was the first payer to have a policy that preferred biosimilars to originators.

Under the program, patients with a number of rheumatic conditions are either started on or switched to biosimilar versions of infliximab, etanercept, and rituximab, whose respective originator brands are Remicade, Enbrel, and Rituxan. Other biosimilar switches are expected with future program expansions.

Pojskic said that, for him, one of the most important lessons to come out of implementing a biosimilar transition program such as this was that payers are the real “gatekeepers” to biosimilar uptake.

“Evidence has shown us time and again that when payers allow open access to an originator and a biosimilar with no preferential policies for biosimilars, the uptake naturally flows to the originators….However, with more aggressive policies that target a sustainable biosimilar market and the uptake of biosimilars in preferential fashion, we start to see payers being a really important part of this equation,” he said.

When biosimilars and originators are treated equally on the formulary, patients and providers flock to originator products because they have historical comfort with using the dominant brands. As a result, biosimilar uptake occurs very slowly, Pojskic said.

So far, Green Shield Canada’s program is a success, generating an average of $8500 in savings per member annually.

Of the patients involved in the program, 55% transitioned to a biosimilar and 14% stayed on the originator but were billed for the price of the biosimilar, which resulted in reduced costs, Pojskic noted.

Pojskic also said that Green Shield Canada made it a priority to work with patients to ensure comfort with biosimilar switching, and this was successful. He reported that patients understood and were receptive to the change, had talked with their physicians about transitioning, and appreciated the support and aid given by nurses.

The Canadian health care system primarily functions as a Medicare-like structure that covers most aspects of hospital and physician care. However, pharmaceuticals are different in that they are funded both privately and publicly. Canada spent $39.8 billion on drugs in 2018, and of that, $12.30 billion and $14.33 billion was privately and publicly funded, respectively, and out-of-pocket costs for pharmaceuticals were $13.10 billion, Pojskic said.

The share of total pharmaceutical costs generated by biologics spending 

 year-over-year, from 20% in 2015 to 24.7% in 2019. Pojskic said that

number to grow as more biologics enter the market.

As biosimilars have entered the market, discounts from originator costs have ranged from 17% for filgrastim biosimilars to 50% for some infliximab biosimilars, he said 

Canada is one of the largest purchasers of originator infliximab, but at the end of 2018, uptake of infliximab biosimilars was only at 8% of total use, slightly above the United States (7%) but significantly trailing Norway (98%), Poland (96%), the United Kingdom (92%), Austria (89%), and Italy (79%), according to Pojskic’s presentation.

everal factors pose barriers to biosimilar uptake in Canada:

There are no interchangeability policies (pharmacists cannot simply substitute biosimilars without physician approval)

Payer policies offer reimbursement for biosimilars without making them preferred products

Switching to biosimilars was not encouraged until recently

Originator manufacturers interfere with biosimilar uptake

Pojskic said a major hurdle that had to be overcome when implementing the biosimilar transition program was addressing the common concern that there is not enough evidence to support the safety of biosimilar switching.

To combat this, Green Shield Canada produced a systematic review of studies showing that switching between originators and biosimilars was safe and effective. The review encompassed 178 studies, of which 140 were based on real world evidence, and included data on 21,000 patients and 10 biologic agents.

“There's plenty of evidence to support biosimilar transitioning and it all points in exactly the same direction. We knew that this evidence was more than enough to safely engage in biosimilar transitioning and to create a program,” said Pojskic.

To overcome provider and patient preferences for brand originators, there has to be more of an incentive to use biosimilars, explains Nedzad Pojskic, PhD, MSc, Green Shield Canada.

Green Shield Canada: Preferential Status Is Vital to Biosimilar Uptake

Providers and health care institutions are going to need a lot more real-world data on how patients respond to various biosimilars and switches between biosimilars and reference products, according to a varied panel of private practice, academic hospital, and group purchasing organization experts in a discussion at the Community Oncology Alliance virtual Community Oncology Conference 2021.

“If we can solve the issue of real-world evidence and data and supply that, I think that will support the use of biosimilars moving forward,” said Sandeep Parsad, PharmD, MBA, BCOP, assistant director of pharmacy at University of Chicago Medicine (UCM).

Providers are going to need convincing, particularly as the choices among biosimilars become more numerous, the panel said. In the oncology space, biosimilars as therapeutic drugs are fairly new, although in supportive care these have been used much longer. And it is often stated that oncologists, especially, become more circumspect in the disease setting about the choice of agents, preferring to go with a well-established originator brand that both they and the patient may have come to trust. To encourage more switching to biosimilars, more evidence is going to be the tool for that, said E. Randolph “Randy” Broun, MD, a blood and marrow transplant specialist with Oncology Hematology Care (OHC), of Cincinnati, Ohio.

“I think data are really lacking in this area. Physicians are going to want data to understand that these truly are biosimilars that are interchangeable and they’re not shortchanging their patients by doing this, even under pressure from payers,” he said.

There’s an important distinction to be made, he said. At his practice, at least, biosimilars are a concept that physicians are very familiar with and they now use these agents in many settings and are comfortable with them. But their confidence in biosimilars can be strained when multiple versions of a single reference product start to appear and they are tasked with making the right choices for their patients.

“Once we have 8 different Herceptins (trastuzumab), are they all the same? Is it reasonable to simply pull a different one off the shelf for a patient who got something different 3 months ago? That will be a barrier, I believe. And you’re only going to solve that with a lot of data that are very convincing that these things are perfectly interchangeable,” Broun said.

Cardinal Health has recognized the value in using biosimilars, as their discounts, particularly when many are available on the market, can be significant, and became proactive with its participating physician practices to cultivate an understanding of these agents that would translate into greater use, according to Sonia T. Oskouei, PharmD, BCMAS, DPLA, vice president of Biosimilars for Cardinal Health.

Parsad said the same goes for her institution. “We took a very purposeful approach to meeting with physicians and nursing staff to talk about the regulatory requirements for approval and demonstrate how biosimilars are similar to reference products, how they have a high standard for safety and quality,” she said.

When it approves a biosimilar, the FDA certifies that it is as safe and effective as the original biologic, and that it has been rigorously evaluated, but the FDA doesn’t give it automatic interchangeable status, meaning pharmacists would be free to substitute the biosimilar with a reference product without informing the physician. Additional requirements are needed for that. It has been hard to explain to physicians that that shouldn’t stop them from prescribing biosimilars, Parsad said. “We felt that was a bit of a bump for us. This is what I’ve heard as well with other colleagues around the country, that physicians do prefer that they are informed when there is a decision whether we should switch or not from the reference product to the biosimilar. But I feel like it went fairly smoothly once there was this very open dialogue.”

It was more of a challenge to develop policies about switching from reference products to biosimilars and in what instances this should occur, she said. A lot of issues arose, such as whether patients should be asked for fresh consent before they are prescribed a biosimilar after having been on a reference product, and if a patient’s condition is stable on a reference product, is it really wise to “rock the boat” and prescribe a biosimilar? And further, following a new diagnosis of metastatic disease, should patients be started on a biosimilar instead of the reference product?

“We had to really work through this saying this is something that we believe as an organization. We believe in the literature, we believe in the data, and we would like to move forward. So, we’ve gotten past that hump,” Parsad said. 

All that said, UCM still wants to see more real-world evidence that shows biosimilars can stand the test of time outside of clinical trials performed in limited numbers of patients for the purposes of FDA approval, she said.

Oskouei agreed. “The conversation has definitely evolved with a desire for more real world evidence and studies around biosimilar to biosimilar switching. With 5 trastuzumab biosimilars on the market now for example, and more in the pipeline, this dynamic is becoming something that providers must navigate.”

At OHC, providers are now using biosimilars in practically 100% of situations when it comes to trastuzumab, rituximab, and supportive care products, such as growth factors for the control of neutropenia in patients treated with chemotherapy products, Broun said. But the practice has found it more manageable to administer a single brand of biosimilar overall except in instances where payers demand something different. “Actually, the ones that give us the most trouble as far as the payers are concerned are the growth factors. Every insurance company seems to have their favorite [pegfilgrastim], and so we stock 3 or 4 of those and we have to sort of interchange them.” 

It would be nice if payers were more lenient about the choice of biosimilars, panelists said. For example, Parsad noted that the administrative work that goes into payer authorizations could be used on something more beneficial, such as patient education and support. “We’re dealing with it as best we can, but it’s unfortunate,” she said.

These issues resemble growing pains for a relatively new option in medicine that is already proving its value, said Kathy Oubre, MS, CEO of Pontchartrain Cancer Center in Louisiana, who served as panel moderator. “The US market is still in its infancy. We just need to let it mature. Biosimilars have been, at least for our organization, a great way to help provide some cost savings to the system and to the patient.”

Community Oncology Alliance

Next-stage biosimlar acceptance will stand on the strength and availability of real-world data as more of these biologics are launched, a Community Oncology Alliance (COA) conference panel said.

COA Panel Says Confidence Rests on Real-World Data

Are we there yet with biosimilars? That’s often the back-seat perspective, but this negativism is really based on “fiction” and biosimilars are rapidly gaining ground, according to Ted Okon, MBA, executive director of the Community Oncology Alliance, which advocates on behalf of community-based, nonhospital oncology clinics.

Misconceptions about biosimilars are numerous, Okon said, listing them at the recent Festival of Biologics 2021 biosimilars conference:

Physicians won’t prescribe them because they’re not as efficacious as originator products or the doctors make more money on the most expensive products

Biosimilar naming suffixes and CMS coding for them are stifling growth

Biologics are “natural monopolies” that shut out biosimilars

There have been repeated calls from the Drug Pricing Lab at Memorial Sloan Kettering Cancer Center in New York to regulate the prices of originator drugs rather than trying to make biosimilar competition do the work of trimming the soaring costs of biologics, but Okon said there’s no justification for even considering throwing in the towel on biosimilars. “I think this is just not based in fact, it’s not workable, and it’s complete fiction,” he said.

Peter Bach, MD, MAPP, and Mark R. Trusheim, MSc, 

 requiring “that biologic drug manufacturers lower their prices to affordable yet still profitable levels when their market exclusivity expires.”

Okon in his talk said that proposed policy was “price fixing” under a disguise. “I just want to say that price fixing has never worked in the long-term history of humanity,” Okon said.

Such theories and “fictions” about biosimilars distract from the true facts of the case, Okon said. “The biosimilar market is growing. Yes, it’s taking a while, but it’s growing.” Although the United States is behind Europe in terms of biosimilars approved and launched, the FDA continues to add more approvals each year—29 since 2014—and 73 additional biosimilar candidates are in clinical trials and/or under FDA review, Okon said.

Physicians continue to prescribe more biosimilars, and price competition is improving. “At COA we have a biosimilars committee, and they are committed to the growth of biosimilars. There is price competition and the market could be stronger and produce more savings,” he said.

Hospital Incentives Undermine Biosimilar Progress

However, one place that biosimilars could be absorbed and appear to be snubbed instead is in the hospital community, where financial incentives are heavily weighted in favor of biologic reference products, which means biosimilars in many cases are not even considered, Okon said. He quoted from a January 2021 report from Bernstein, the financial advisory firm, which used a recent federal drug price disclosure mandate to probe what insurers are paying hospitals for the use of reference biologics.

For example, UT Southwestern Medical Center receives $17,241 from Cigna for administering a dose of the Neulasta originator brand of pegfilgrastim, whereas Aetna pays UT Southwestern $6474 per dose. Humana pays Wake Forest Baptist Medical Center $4370 for a dose of the Prolia originator brand of denosumab, whereas United Healthcare pays Wake Forest $2209, according to the Bernstein report. As these data show, because compensation levels can sometimes be high, 30% to 43% of hospitals only carry the innovator products, Okon said 

Okon said the average markups over average selling prices on biologics are 250% although the markups are often much higher, as indicated by the Bernstein information, especially if the drugs are acquired through the 340B drug price subsidy program, which is intended to improve access to drugs for patients. Providing a scenario, Okon said it’s possible for a hospital to be paid almost $8000 for a drug whose wholesale cost is $4500, with the payer being charged over $8000 and the patient paying over $2000 out of pocket.

“You can see, especially with 340B, it makes drugs very, very economically attractive, and as a result, biosimilars are not attractive to use.”

Citing information from IQVIA, Okon said the US market for biosimilars stands at $4 billion annually. Okon called that “amazing growth.”

Growth trajectories for filgrastim biosimilars have been slow but market share growth curves for more recent biosimilars for other products, including bevacizumab, trastuzumab, epoetin, and rituximab, have been very steep, Okon noted. Similarly, price declines due to biosimilar competition are becoming steeper, too.

“It’s very, very interesting. It just took more competition,” he said.

There are culprits holding back the growth of biosimilars, he added. These include patent battles and restrictive deals that favor innovator products. Pharmacy benefit managers and payers are responsible for the latter, he said.

Although there are problems that prevent biosimilars from getting to patients, the following actions could help to improve access and lower prices, Okon said:

Prioritize and streamline the FDA approval process for biosimilars

Eliminate rebate waivers for biologics, including biosimilars

Provide 340B drug discounts to patients, not hospitals

“The bottom line is this: the biosimilar market in the United States is growing and it’s producing savings,” Okon said. “Could it be growing more? Yes. Could it be growing faster? Yes. Could it be producing more savings? Yes. But the solution is not price regulating the market. That will destroy not only the biosimilars but also the biologics market.”

Calls for price regulation and lopsided incentives are threats to biosimilar progress, Community Oncology Alliance (COA) Executive Director Ted Okon argues.

COA's Okon Takes Aim at Biosimilar Misconceptions

Shanghai Henlius Biotech is one of many companies in China working to crack open the market there to biosimilar competition. However, Henlius stands out so far for some notable achievements, such as bringing the first biosimilar (rituximab) to market in China and achieving significantly rapid market penetration in the product's first several months of life. 

The company has bigger ambitions to achieve dominance not only in China but also on the world biosimilar stage, Ping Cao, company vice president of business development, explained at the recent Festival of Biologics USA meeting. 

Henlius was formed in 2010 and filed its first biosimilar investigational new drug application (HLX01, rituximab) with the Chinese National Medical Products Administration (NMPA) in 2011. The company opened its first Good Manufacturing Practices–certified factory in 2016, and HLX01 was approved in China in 2019, becoming the first biosimilar approved in China.

In July 2020, the company saw its trastuzumab biosimilar (HLX02, Zercepac) approved in the European Union. The same drug was approved a month later in China, and in December of 2020, Henlius succeeded in getting an adalimumab biosimilar (HLX03) approved in China, also.

The company decided that its first several biosimilars would be oncology products because of the relatively huge market for oncology treatment in China. That meant the company saw huge potential in rituximab, trastuzumab, and bevacizumab biosimilars. The company anticipates an FDA filing for its bevacizumab biosimilar (HLX04) in 2021.

It also anticipated strong growth for its adalimumab biosimilar, referencing the blockbuster Humira, which Cao said still has a relatively small share of the market for autoimmune diseases in China. “Autoimmune disease actually has a huge unmet need in China,” she said. Humira’s 2019 sales share in China vs its global penetration rate was 0.2%, and the estimated access rate (to adalimumab) in China in 2020 was 1.3% of patients vs a potential market of 6.7 million patients.

Global marketing of its biosimilars is an important element of the company’s growth strategy , but Henlius also wants to develop biobetters, drugs that are based on originator products but deliver better efficacy, improved safety, or other enhancements. Developing new biologics and combination therapies also is a targeted area for growth at Henlius, Cao said. 

Its second wave of biosimilar contenders may target the cetuximab (Erbitux, rectal and head and neck cancer), ramucirumab (Cyramza, solid tumors), pertuzumab (Perjeta, breast cancer), and denosumab (Prolia/Xgeva, bone loss) markets. Henlius has biosimilars of these drugs in phase 1 development currently.

The company is seeking a rheumatoid arthritis indication for its rituximab biosimilar and, if successful, this indication would make HLX01 a bio-innovative medicine because the reference product, MabThera, has not yet been approved for this indication, Cao said. China’s NMPA has accepted a new drug application for HLX01.

Under its current indications, HLX01 was a record breaker, taking 50% of market share for new patients treated within 5 months of launch in China and surpassing market share of the originator product, MabThera, after 14 months on market, Cao said.

Although the cetuximab product candidate remains in early stage trials, Henlius has already granted commercialization rights in China to Shanghai Jingze. The company has multiple nonbiosimilar product candidates in early-stage development and antibody drug combinations in mid- to late-stage development for cancer treatment.

HLX02 (trastuzumab) was the first China-made biosimilar to gain approval in Europe, Cao said. “It has been launched in the United Kingdom, Germany, Portugal, and Spain, and used in tier 1 hospitals of Europe,” she said.

Henlius is working to increase the scale of its manufacturing operations to support its global ambitions for sales growth. It has 2 plants currently: one in Xuhui and a second in Songjian, with a total installed production capacity of 44,000 L. Both of these factories were fitted out and made operational within the past 3 years.

In Sonjiang, Henlius has a third plant in development, which Cao said when complete would rank among the largest biologics production facilities in Asia for size. This plant following phase 1 of development would have 36,000 L of production capacity, which would be increased to 45,000 L later on. Henlius currently has a manufacturing staff of 758 employees, Cao said. “For biologics, the important thing is to reduce manufacturing costs. We have our own proprietary technology to enable this mission.”

The company has its own sales team in China and is looking for partners in the rest of the world. The China sales team numbered 400 full-time employees at the close of 2020 and is projected to reach 1000 full-time workers by the end of 2021. Henlius has established relationships with 2700 upper grade hospitals and 30,000 oncologists in China, Cao said.

Shanghai Henlius Biotech began as a 2-person enterprise in 2010 and now has multiple oncology products in development and 3 biosimilars on the market. An executive discusses its business trajectory.

Shanghai Henlius Biotech Maps Out Its Biosimilars Future

It’s not easy to break into the insulin market, and for that reason the public should not expect a flood of insulin biosimilars producers, said a panel of experts on biologics manufacturing at the Festival of Biologics USA.

Insulin is a biologic that is very difficult to consistently produce at high purity in large volumes that would be necessary for distribution, and very few manufacturers have the resources to perfect this process and convince regulators that they can get it right, the panelists said.

Further, the United States is an intensely litigious country for biologics producers, and would-be biosimilar contenders may encounter a barrage of legal opposition from entrenched producers, they said. In the United States, Eli Lilly, Novo Nordisk, and Sanofi produce and distribute an estimated 90% of the insulin.

This relative monopoly has given rise to extraordinary inflation in the cost of insulin products. A report from Mayo Clinic in 2020 observed an 

 in the cost of a vial of Humalog (insulin lispro, Eli Lilly) between 1999 and 2019 ($21 vs $332, respectively).

The United States has attempted to clear a pathway for the introduction of insulin biosimilars. In 2020, the 

351(k) Biologics License Application process

 under the Public Health Service Act became available for insulins and growth hormones, allowing these products to be approved as biosimilars. 

There are no biosimilar insulins so far, although in mid-2020, Biocon and Mylan succeeded in getting an insulin glargine (Semglee) approved under the generic 505(b)(2) New Drug Application pathway and are seeking to have it designated a biosimilar. The panel discussion at Festival of Biologics USA included the participation of 

 vice president and head of Global Regulatory Affairs for Biocon.

Many companies have attempted to bring rival insulin products through the review process in Europe and have failed because the pharmacokinetics of these products are extremely difficult to match precisely with originator products, Ramanan said. “That’s barrier number 1. Barrier number 2 is we need to have economies of scale, and that requires a large capital investment, and not many companies have that to combine with the science. This limits the number of players that are coming in beyond the ones that are truly committed.”

Biocon is one of the success stories, having insulin products approved in more than 60 countries. “It took us a very long time, but now we have that institutional knowledge,” Ramanan said.

 an expert on pharmaceutical marketing who serves as a professor and chair of Brac University in Dhaka, Bangladesh, agreed that manufacturers have difficulty meeting the regulatory expectations for quality. “Regulators are encouraging companies to invest in continuous processing, so that would mean they have the technical mastery over the process. This is easier to say than to do,” she said.

Process validation is another source of regulatory rejections of insulin product applications, she said. Process validation refers to efforts to confirm that drug product of a standard quality can reliably be produced consistently over time.

Insulins are not complex drugs and, in fact, involve a simple amino acid sequence, Ramanan noted. “However, it is not easy to produce insulins of high purity at extremely large scale. That is what scientific capabilities require.” This makes producing insulin biosimilars a challenge, and it’s another reason why the market is not flooded with competitor products, Ramanan said. 

“It’s a production manufacturing challenge at scale. The world consumes many times more insulin than monoclonal antibodies,” which are the standard form of biosimilars commonly available in the United States, said 

 panel moderator and managing director of SBLehrer, an expert on biosimilar commercialization.

The insulin producer competition in the United States remains scanty, and for this reason, prices are unlikely to come down anytime soon, Ramanan said. Another structural problem in the marketplace is the heavy patenting that originator companies do to protect themselves against competition. “It prevents competition and it keeps the price higher for decades,” Kabir said. Multiple versions of insulin products are needed to really tamp down the price curve, she said.

“Due to the litigious nature of the US market, even before a company finishes a clinical study, there is litigation already ongoing,” said panelist 

ice president of Global Regulatory Affairs for Gan & Lee Pharmaceuticals USA

. Therefore, a company needs significant resources to endure these battles and finally get its product to market.

Despite the expansion of the 351(k) licensing pathway, US regulatory efforts to enlarge the insulin product pipeline have been “lagging,” Dave said. “The decision-making right now is really in the hands of the pharmacy benefit managers in the United States.”

Taking all structural conditions into account, Dave said he anticipates that only a “limited” number of companies will develop insulin biosimilars.

Even if the problem of too few competitors can be solved, there isn’t much hope for price reduction. The benefit for patients and health care systems from having insulin biosimilars will not be as dramatic as has occurred for generic drugs, where deep discounts have been achieved, Dave said.

Biosimilars involve costly biologics manufacturing, and biosimilar developers will not be willing to enter market at deep discounts to the originator products. Combining the scarcity of players in the market and the unwillingness to discount products, the problems of low competition and high prices are very likely to persist, he said.

For an article about legislation introduced to grant automatic interchangeability for insulins, click 

Insulin is not a complex drug, but churning it out in massive quantities at high levels of purity is one of the main hurdles inhibiting biosimilar competition, panelists said. 

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