The 15 percent discount is the same price gap set when Zarxio was launched in Europe in 2009, although the discount in Europe has since widened to an average of around 20 to 30 percent.
Insurers hope biosimilars will eventually cost the public 40 percent to 50 percent less than the original brands.
Neupogen is a $1.2 billion-a-year medicine for Amgen that boosts white blood cell counts to fight infections in cancer patients. The majority of its sales are generated in the United States.
An even bigger prize lies in the development of copies of multibillion-dollar antibody drugs for the treatment of diseases like cancer and rheumatoid arthritis, where Sandoz and rivals are also working to bring products to market.
Express Scripts, the largest manager of drug benefit plans for U.S. employers and insurers, has estimated the United States could save $250 billion between 2014 and 2024 if 11 of the likeliest biosimilars reach the market.
Specialists Lack Confidence in Biosimilars
Physicians wonder about the efficacy of biosimilars and worry about the fine print in drug substitution laws, according to a survey by Quantia, an online discussion platform for about 225,000 doctors.
The survey of 300 primary care physicians (PCPs) and specialists finds that while 94% of all physicians appreciate the value of biosimilars, only 17% of specialists who treat patients with biologics would be willing to use biosimilars, citing a general lack of awareness about the drugs even among specialists who currently prescribed biologics. Only 12% of specialists are confident that biosimilars are as safe as the original biologic; 22% are “not at all confident” that that is the case, according to the survey, which was conducted in March.
In addition, “prescribing specialists’ main questions and concerns about biosimilars are related to regulations for prescription drug substitution (24%) and understanding best practices for evaluating when to prescribe a biosimilar vs. branded therapy (21%),” the survey states.
It was an easier path for generics vs. brand-name small-molecule drugs, the authors argue. Biosimilars are more chemically complex and more vulnerable to microbial contamination.
Also in play: A changing employment model thanks to provider consolidation that makes physicians harder to reach and restricts their decision making. Researchers say that 70% of physicians “now practice within an organized system,” citing an October 2014 report that Quanita did with Capgemini Consulting.
Pharmaceutical sales representatives have a more difficult time tracking down these doctors. Communication between the leaders of the hospital or practice and the physicians in the trenches might not go as smoothly as when doctors owned their own practices.
Still, the survey reinforces the notion that specialists should be the first to give biosimilars a close inspection, because “they are 120% more likely to already prescribe biologics than PCPs and 47% more aware of biosimilars, and therefore likely to represent the majority of biosimilar early adopters….”
Educational efforts should also focus on nurse practitioners and physician assistants who may not prescribe biosimilar “but who will nevertheless be a core part of the care team treating patients taking these therapies,” according to the survey.
U.S. biosimilar market to grow to $11 billion by 2020
The U. S. has lagged behind the rest of the world as far as biosimilars are concerned. Biosimilars have on the market in Europe since 2006 and they are commonly in China, India, and South Korea.
But the FDA approved the first biosimilar, filgrastim-sndz (Zarxio), on March 6, 2015, and now analysts are busy predicting how large the U.S. market will be.
A recent report by Market Search Reports Inc. says the sales revenues in the U.S. for biosimilars will increase from $1.9 billion this year to $11 billion in 2020. According to a press release about the report, largest markets for biologics are Europe, Japan, and the U.S., so they are likely to the largest markets for biosimilars.
The report says biosimilars now account for just 0.5% of the revenues for biologics worldwide. That could grow to 10% but that growth is contingent upon strong market in the U.S., the report says.
MarketandMarkets also came out with a report on biosimilars market recently. As described in a press release, the report puts the current global market at $2.29 billion and estimates the CAGR at 22.1% for the forecast period (not specified in the press release).
Unresolved issues of interchangeability, naming conventions, and indication extrapolation will shape the size of the U.S. market. But the MarketandMarkets report notes that in Europe a major factor has been budgetary pressures to control health care costs.
The same might be true in the U.S.
With Medicaid expansion, ACA subsidies, and the aging of the baby boomers into Medicare, public payers are responsible for an increasing share of the health care dollar. They should have an incentive shop for the best value, which would seem to include biosimilars.
Physicians familiar with biosimilars but can’t name one
Most physicians are aware of biosimilars, but ask them to name one and many come up short, according to a survey of 300 specialists and primary care physicians conducted by QuantiaMD, an educational website for physicians.
The survey results, as published in Medical Marketing and Media, show that 78% of the doctors who answered questions about biosimilars were familiar with the term.
Far fewer—just 38%—could name a biosimilar that’s both a candidate for FDA approval and relevant to their patients. Only 33% could name any kind of biosimilar.
Why the ignorance? It’s actually completely understandable. Biosimilars aren’t part of day-to-day medicine yet. The FDA has approved just one biosimilar, filgrastim-sndz (Zarxio), a medication that helps cancer patients fight off infections. The reference product is Amgen’s Neupogen.
QuantiaMD winnowed the original 300 physicians polled into a smaller group of 120 “prescribing specialists”—physicians most likely to prescribe biosimilars.
A relatively small minority (17%) of the prescribing specialists said they were very likely to prescribe biosimilars while a sizable majority (70%) said weren’t sure or were only “somewhat likely” to write a biosimilars script.
Relatively few—just 12%—of the prescribing specialists are “very confident” that biosimilars are as safe as the reference product.
Gastroenterologists willing but wary of biosimilars
How physicians view biosimilars is one of the wildcards that will determine how popular the drugs become.
Gastroenterologists are especially important group because anti-TNF biologics, infliximab (Remicade) and adalimumab (Humira) are commonly prescribed for inflammatory bowel disease.
When the American Gastroenterologist Association surveyed 180 of its members, it found a willing but wary attitude toward biosimilars.
Almost three-quarters (72%) of the respondents said they’d be likely to prescribe biosimilars when they become available, and half (49%) were enthusiastic, saying they were extremely or very likely to write a biosimilar script.
But the survey also show there’s a good deal of caution to the point of wariness among gastroenterologists.
By a large majority (80%), the respondents said they were concerned with “the level of clinical similarity in terms of effectiveness and safety to the reference biologic,” and two-thirds (67%) favored an FDA policy that would not allow “indication extrapolation.” With indication extrapolation, biosimilars can be used for indications that the reference drug has been approved for without being tested for those indications themselves.
More than half of the gastroenterologists (55%) believe that substitution of a biosimilars for its reference product should be permitted if the prescriber is notified and a third (35%) said they believe that pharmacy-level substitution should never be allowed.
Traceability key if biosimilars are to compete, cut costs
Generic versions of small molecule drugs have generated a trillion dollar-plus in savings, by some accounts. People who care about health care costs are hoping that biosimilars might also ratchet down the country’s health care bill by a notch or two—maybe not in that trillion dollar range but by enough to make a notable difference.
But obstacles loom in the way of a biosimilar windfall, as outlined today in an opinion piece in JAMA by Amitabh Chandra, director of health policy research at Harvard’s Kennedy School of Government, and Jacqueline Vanderpuye-Orgle, director of research operations at Precision Health Economics. They mention two. First, biosimilars are, in fact, merely similar to their brand-name counterparts, argue Chandra and Vanderpuye-Orgle, so they can’t necessarily be marketed as producing the same results as their referenced products. Second, the manufacturing process for biologics is complex—more complex than it is for small molecule drugs—and the costs are high, so entry into the market won’t be easy. Difficult market entry may mean less competition.
Lower your expectations, say Chandra and Vanderpuye-Orgle:
"The likely preference for the approved original biologic product (or reference biologic) and limited competition suggest that biosimilars will have less effect on the marketplace than generic products did for branded small molecule drugs."
And expect prescribing physicians to be wary of biosimilars:
"This unease [of prescribing physicians] with using biosimilars is likely large; amplified by risk aversion, status quo bias, and malpractice concerns given the unknown toxicity of the agents; and reinforced by financial considerations if payment to physicians is a fixed percentage of the price of the drug (as in Medicare Part B)."
But Chandra and Vanderpuye-Orgle build a case that at least some of the reluctance of physicians could be overcome—and the odds of biosimilars gaining a cost-saving foothold in the market improved—with “traceability,” which they defined as “the process of tracking a particular dose to a specific manufacturer, facility, and manufacturing batch.”
If biosimilars are traceable, any problems with variability or quality can be more easily investigated and identified, they assert. That might be a problem for a particular manufacturer but, the JAMA authors suggest, it could salvage the reputation of other biosimilars in the market and, perhaps, biosimilars in general.
Another plank in Chandra and Vanderpuye-Orgle’s traceability platform is that it would help with formulary design and cost-sharing because identifying a biosimilar as a biosimilar means it can be priced differently and offered on a different (presumably less expensive) tier than its brand-name counterpart.
Chandra and Vanderbuye-Orgle point to two ways that biosimilars could be made traceable. First, the product can be tagged with some kind of identifying code that comes after the name of the biologic; for example, Sandoz/Novartis’s copy of Amgen’s Neupogen is named, for now, filgrastim-sndz. (The FDA described that as a placeholder and is drafting a policy that will determine whether that kind of naming convention will be required.) Alternatively, National Drug Codes (10-digit numbers that identify the labeler, produce, and package size) could be used, although the authors note that pharmacists, not doctors, are familiar with National Drug Codes.
They don’t go into it, but the World Health Organization has proposed a four-letter identifier for biosimilars. The Pharmaceutical Journal , published by the Royal Pharmaceutical Society, the professional organization for pharmacists in Great Britain, described the WHO proposal this way:
"However, under the WHO naming proposal, the BQ [biological qualifier] would consist of a four-letter code suffix assigned at random, resulting in names such as ‘filgrastim-bcdf’ and ‘filgrastim-wxyz’. The code would also be attached to the manufacturing site where the biosimilar is made, which has been criticised by industry groups. For instance, a company could have two different codes for the same biosimilar product manufactured at two different sites."
Chandra and Vanderpuye-Orgle float the idea of using postmarket surveillance to decide how biosimilars should be named and made traceable. Names that distinguish the biosimilar from the reference product would be used at first. Data from postmarket surveillance would then be used to determine if the biosimilar was, for practical purposes, bioequivalent to its reference drug. If it were, then shared names could be used.
Chandra and Vanderpuye-Orgle’s takeaway is the importance of postmarket surveillance . They point to the experience in Australia as instructive. After epoetin biosimilars were allowed on the market there, almost all (95%) of the adverse events could be attributed to particular manufacturers. But when biosimilars to filgrastim were sold, just 55% of the adverse events could be traced to particular manufacturers. The difference was that filgrastim biosimilars had an identical naming policy, whereas the epoetin biosimilars were subject to a distinguishable naming policy, according to Chandra and Vanderpuye-Orgle.