Dive Brief:
- The availability of biosimilars in the U.S. could save between $24 billion and as much as $150 billion on biologics spending over the next ten years, said a report from Rand Corporation. This could cut the spending on biologics by around 3%.
- Biologics are used in around 1-2% of patients in the U.S., but accounted for 38% of prescription drug spending in 2015, and 70% of the growth in prescription spending between 2010 and 2015.
- Challenges facing the biosimilars market over the next few years include uncertainties around intellectual property leading to delays entering the market; interchangeability impacting market share; and incentives and disincentives for prescribing biosimilars based on payment structures.
Dive Insight:
"Biologics account for the fastest-growing segment of prescription drug spending, but biosimilars have the potential to help slow some of the increase," said Andrew Mulcahy, lead author of the study and a policy researcher at RAND, a nonprofit research organization. "However, there remain many important industry, regulatory and policy decisions to be made that will influence whether such savings are realized."
Although biosimilars don't save as much as generics, which can cut the cost of an individual drug by more than 80%, their availability on the market leads to competition, which can drive price reductions. Improving access to safe and effective treatments also has potential to reduce overall healthcare spending.
"Action is needed now to support a competitive biologics marketplace that ensures the projected benefits outlined in the report materialize," said Sheila Frame, head of biopharmaceuticals in North America at Novartis' Sandoz, which helped fund the report.
To try to promote the use of biosimilars by physicians and therefore boost savings, the Food and Drug Administration has developed educational materials to help healthcare professionals understand more about the approval process for biosimilars, including the rigorous standards that biosimilars need to meet under the FDA's approval pathway.
"An increase in market competition, offered by a growing complement of biosimilars, may lead to meaningfully reduced costs for both patients and our healthcare system," wrote FDA Commissioner Scott Gottlieb and Associate Director for Therapeutic Biologics in the Office of New Drugs Leah Christi in an FDA blog on Monday.
"As with the significant savings that we've seen through the introduction of generic drugs in the United States, biosimilars could also lead to substantial savings, thereby potentially improving access and promoting better public health outcomes. Understanding the rigorous process FDA uses to evaluate biosimilars can help prescribers and patients maximize the benefits from these products," they added.
The FDA created a regulatory approval pathway for biosimilars in 2010. There are now seven approved biosimilars in the U.S.: Novartis AG's Zarxio (filgrastim-sndz); Pfizer Inc and Celltrion Inc's Inflectra (infliximab-dyyb); Novartis' Erelzi (etanercept-szzs); Amgen Inc's Amjevita (adalimumab-atto); Samsung Bioepis Co Ltd and Merck & Co Inc's Renflexis (adalimumab-abda); and Amgen and Allergan plc's Mvasi (bevacizumab-awwb).
While seven biosimilars have been approved so far in the U.S., the majority of these products have yet to reach the market because of ongoing patent battles within the legal system.