Congressman Schrader Describes Frustration With Biosimilar Uptake

July 26, 2021

Biosimilar uptake could be more robust in the United States if the FDA can be convinced that biosimilars are worth the effort, according to Rep Kurt Schrader, D-Oregon.

Rep Kurt Schrader, D-Oregon, is hoping for a stronger embrace in the health care community of his bill to increase reimbursements for use of biosimilar agents. And more public enthusiam could persuade the FDA to approve more of these cost-saving biologics, he said.

Biosimilars are generally lower-cost agents that can be used in place of costly originator biologic brands, and Schrader and Rep Adam Kinzinger, R-Illinois, have introduced a bill for creation of an act called Bolstering Innovative Options to Save Immediately on Medicines Act (BIOSIM), which would stimulate the use of biosimilars by increasing the add-on incentive payment to physicians who prescribe them.

“I’m not entirely sure that we’re going to solve this with the incentive payment, but sometimes, as we all know, in real life you have to spend a little money to save a little money,” Schrader said in a recent webinar sponsored by Axios.

Biologics are a rapidly growing budget item in health care, and biosimilars of originator biologics hold the potential for reducing this cost. For example, a 2019 report from the Congressional Budget Office noted that 30% of net Medicare Part D and Medicaid prescription drug spending in 2015 was for specialty drugs, which include biologics, but this spending amounted to just 1% of total prescriptions for both government programs.

Currently, providers are reimbursed the average sales price (ASP) of the biosimilar and, in addition, receive 6% of the ASP of the originator brand that the biosimilar is based on. This is thought to ensure that it isn’t more profitable for them to prescribe the originator product rather than the biosimilar.

Schrader and Kinzinger’s bill is predicated on the assumption that raising the originator drug percentage add-on to 8% would serve as a greater incentive for use of biosimilars. Physicians sometimes contend that they do not receive the full add-on percentage and what they do receive does not cover their full costs of treatment.

Biosimilar ASPs are declining at the rate of 10% to 15% annually, which is a sign that competition from these products is resulting in savings for the health care system, but savings vary across the 7 types of biologics for which biosimilars are available in the United States, according to a recent Amgen report.

And costs of originator brands, despite biosimilar competition, often move downward only stubbornly. For example, since the inception of biosimilars for trastuzumab (Herceptin), the originator ASP has declined 5% or less by the end of the first quarter of 2021. By contrast, biosimilar discounts for trastuzumab had reached 30% or greater.

In his remarks, Schrader attributed such behavior to physician preference for prescribing well-established brands. “I’ll tell you that as a veterinarian in my previous career, I got comfortable with certain brand-name drugs that were the first to come to the marketplace. You don’t want to change what’s working for you. It takes a little push sometimes to get off using the medication or pharmaceutical agent you’ve used again and again, to get patients and your clients to try a different medication that might be the exact equivalent.”

Schrader described biosimilar uptake in the United States as disappointing compared with results in the European Union. He said a good public relations campaign could promote these agents and improve the savings. “It’s a paltry amount in the United States.”

He also noted that there have not been many biosimilar approvals by the FDA lately, which he said is contributing to the problem. In 2019, 10 biosimilars were approved, and in 2020 just 3 were approved. So far in 2021, none have been approved.

The reason for this falloff is that the FDA has been distracted by other concerns, but a PR campaign could help to persuade the FDA to divert more resources toward the review and approval of biosimilar applications, he said.

“As you start to get the pickup, then I think the FDA will start to prioritize even more [biosimilars] for availability in the marketplace. The FDA right now is a little understaffed. It has lots of obligations, and I think they’re doing a little triage within their own office as to which [projects] they’re going to put their manpower behind. I think that once we start getting some increased biosimilar uptake, we can then encourage the FDA to continue to approve more and more of these biosimilars,” Schrader said.

Congressman Schrader Describes Frustration With Biosimilar Uptake

Rep. Kurt Schrader, D-Oregon