Future Biosimilars Will Be a Risky Business, Says Norway's Steinar Madsen, MD

During the BioTech Pharma third annual Biosimilars and Biologics Summit, held March 21-22 in Porto, Portugal, Steinar Madsen, MD, director of the Norwegian Medicines Agency (NoMA) and self-described “spiritual father” of the NOR-SWITCH study, gave a presentation on the sustainability of the biosimilars market in Europe.

Madsen began by reminding the audience that only 8 European nations have full access to biologics; in Eastern Europe and in the United Kingdom, he said, there is low or even no access to some products. In Norway, biosimilars are a part of the government’s strategy to ensure equal access to drugs independent of patients’ personal resources or location of residence, and “that’s what I work for,” said Madsen, in driving the lowest possible drug prices, the use of cost-effective medicine, and allowing room for innovation.

One avenue by which Norway is able to keep its costs low is through price regulation; prescription drugs’ maximum allowable prices are recalculated annually, and approximate 30% to 90% price reductions are instituted when generic drugs are on the national automatic substitution list.

Early on in its biosimilars experience, Norway sought to make use of the automatic substitution list to produce savings for filgrastim; in June 2010, NoMA added Tevagrasim (sold in the United States as the follow-on tbo-filgrastim) to its list as automatically substitutable for brand-named filgrastim, Neupogen. Amgen immediately sued NoMA, and the court agreed that there was not a legal basis for allowing biosimilars to be treated in the same manner as generics. However, said Madsen, given that substitution is a “very powerful tool” in the Norwegian strategy to keep cost low, he expects a change in the pharmacy law, allowing for the automatic substitution of biosimilars, to be put in place in 2019 or 2020.

Madsen also sees the tide—in Europe and beyond—turning toward switching to biologic products that provide the best value and that win national tenders. He highlighted the Dutch national authority’s reversal of its 2010 negative recommendation on switching to a 2015 positive recommendation, an Australian 2015 recommendation of pharmacy-level switching, and the FDA’s 2017 draft guidance on interchangeability as signs that switching is becoming more widely accepted. Such acceptance will be crucial for biosimilars to gain market share in inflammatory diseases, multiple sclerosis, and diabetes, which (unlike oncology biosimilars that typically have a shorter duration of use) have a high dependence of switching for uptake.

Crucially, said Madsen, in nearly 13 years of experience with switching between reference products and biosimilars—and even among biosimilars—no unexpected problems have arisen. “Switching is no problem. You have to realize that.”

The cost savings that Norway has been able to achieve with its willingness to switch among biosimilars is reflected in its experience with biosimilar infliximab; in 2014, Remsima won the infliximab tender with a 39% discount; the next year, it won again, this time with a 69% discount. Inflectra beat Remsima in 2016 with a 61% discount, and Remsima only regained its tender win by offering an “extremely large” undisclosed discount in 2017.

Similarly, among bidders in the rheumatoid arthritis (RA), ankylosing spondylitis, Crohn disease, and psoriatic arthritis indications, AbbVie had to drop its prices by 80% in order to win tenders in each indication against biosimilar infliximab (Remsima) and etanercept (Benepali).

While reports of AbbVie’s deep discounts spurred fears of a race to the bottom on price, Madsen pointed out that a single gram of monoclonal antibody may be produced for as little as $30; production costs enable discounts of up to 85% without eliminating profits. “They’re not selling with loss, that’s for sure,” he said.

These aggressive price drops have had a substantial impact not only on the healthcare system, but also on patients; today, said Madsen, it’s possible to start patients with inflammatory diseases on biologics without first using steroids of conventional disease-modifying drugs because “it doesn’t cost anything anymore. We think we can cure RA by starting a biological early in the course of the disease.”

Looking ahead, in order for reference biologics to compete with biosimilars, innovator sponsors will have to aggressively drop their prices, as has been the case with AbbVie and Humira, and it remains an open question whether biosimilars will be able to drop their own prices low enough to retain a competitive edge. However, Madsen does not see biobetters—improved reference biologics—as having a substantial role to play in the developing market, because a biobetter’s maker will have a challenging time justifying a higher price in health technology assessments.

Today’s biosimilar prices, Madsen said, are “now in generic territory,” and the consequences of such deep discounts will likely continue to result in switching, even among therapies (such as switching between adalimumab and etanercept on the basis of cost). He also predicted that there will be fewer innovator drugs in the rheumatology space, unless they are vastly innovative in approach (such as chimeric antigen receptor T-cell therapy for RA), because biologic treatment is now so affordable.

Another result of generic-level discounts, however, will be to make biosimilar development even more laden with risk, said Madsen. “Will future developments of biosimilars be a risky business? Yes, definitely.” Given that innovator companies—which by European law must be allowed to participate in tendering activities—can afford to drop their prices significantly enough to keep biosimilars from gaining market share, Madsen said, biosimilar developers should be aware that innovators can wipe out biosimilar businesses in the snap of a finger.