5 hurdles facing biosimilar developers
This feature is part of a series focused exclusively on biosimilars. To view other posts in the series, check out the spotlight page.
With four biosimilars approved in the U.S., it's still the early days for the copycat biologics, but interest in the space is growing as companies increasingly see the value that they can add to the market. There is a simplified regulatory pathway and several companies like Merck & Co, Pfizer, Amgen and Samsung Bioepis are building up biosimilar pipelines. Yet, legal challenges, education and reimbursement could impact the future of these drugs. Here are five obstacles that biosimilar developers have to navigate:
1. Pricing pressures
The pricing environment has reached a fever pitch, with public backlash to dramatic price increases dominating the headlines for the last year. Generics revolutionized the way drugs were sold in the U.S., offering an 80% to 90% discount to branded drugs. Now, consumers and payers are hoping that biosimilars could do the same for high priced biologics. Yet, Pfizer priced its Remicade (infliximab) biosimilar Inflectra (infliximab-dyyb) at only a 15% discount – raising the issue of whether biosimilars will have their desired impact on the market.
2. Legal battles
With the advent of the biosimilars pathway created by the Biologics Price Competition and Innovation Act (BPCIA), a host of litigation has sprung up around biosimilars. AbbVie and Amgen are battling it out over Amgen's copycat of the blockbuster Humira (adalimumab). While Amjevita was approved in September 2016, Amgen has indicated that legal proceedings could delay launch until 2018.
Amgen is on the other side of the courtroom in several other legal battles. The big biotech is fiercely defending the patents for Epogen, Neulasta and Neupogen. Although some of the litigation has been ongoing for more than two years, Amgen was unable to delay the launch of Sandoz's Neupogen (filgrastim) biosimilar Zarxio (filgrastim-sndz).
Even though price levels are still being worked out, biosimilars are expected to be lower-cost alternatives to their reference products. Some pharmacy benefit managers have indicated that they will favor biosimilars on their national formularies. But reimbursement could get tricky – particularly in the clinical setting.
Places where drugs are infused by a nurse or physician typically use a complicated reimbursement formula based on average sales price. CMS implemented a modified formula for biosimilars and is testing other modifications. There has been some pushback from both reference product developers and biosimilar developers about CMS using codes that don't specifically identify the maker of the product.
While the industry has been talking about – and been excited about – biosimilars for the last several years, there is still a lot of education that has to be given to both physicians and the public.
Earlier in 2016, the Food and Drug Administration hosted several advisory committee meetings to talk about biosimilars. Unlike most meetings that focus on the data surrounding a specific product, the panels involved a lot of basic questions about biosimilarlity and interchangeability.
The tenor of the meetings further highlights the lengths that biosimilar sponsors will have to go to in order to inform the consumer about the benefits and safety of biosimilars.
Like the reference biologics that they copy, biosimilars are derived from living cells with inherent variability and therefore are incredibly complex to manufacture. For this reason, these drugs are considered similar and not identical or interchangeable like generic drugs.
This also makes the manufacturing process very costly and is why biosimilars are not as discounted as generics.
Yet, manufacturing issues have plagued the drug industry this past year. While this has not yet impacted biosimilars, the copycats will eventually face more of the same challenges as the rest of the industry as biosimilars expand.
Follow Lisa LaMotta on Twitter