What is a biosimilar?
With numerous specialty drug patents expiring in the next five years, manufacturers are readying new biosimilars for introduction into the market. By 2020, 12 biologic products with global sales of more than $67 billion could face biosimilar competition.
Patient advocates and payers anticipate biosimilars will foster competition and deliver increased savings from negotiated discounts. Competition between a biologic drug and a biosimilar is much more likely to resemble brand-to-brand competition than it is to resemble the dynamics of brand-to-generic competition.
Savings estimates range from $44 billion to as high as $250 billion over the first ten years that biosimilars are available to patients. The Congressional Budget Office estimated that biosimilars would initially be priced about 25 percent below their brand-name counterparts and after several years of competition would be priced as much as 40 percent below the reference product, saving the federal government nearly $6 billion over ten years.
More recent analyses estimate the cost of biosimilars to be around 20 percent lower than that of branded biologic therapies. Nevertheless, this remains a significant reduction since many biologics command hundreds of thousands of dollars for annual treatments.
A biosimilar is a biologic product that is approved and judged by the FDA to be highly similar to another FDA-approved biologic product (known as a reference product) and has no clinically meaningful differences in terms of safety and effectiveness from the reference product. Only minor differences in clinically inactive components are allowable in biosimilars
The Patient Protection and Affordable Care Act (Affordable Care Act), signed into law in 2010, amends the Public Health Service Act (PHS Act) to create an abbreviated licensure pathway for biologics that are demonstrated to be “biosimilar” to or “interchangeable” with an FDA-licensed biologic.
This pathway is provided in the part of the law known as the Biologics Price Competition and Innovation Act (BPCI Act). Under the BPCI Act, a biologic drug may be demonstrated to be “biosimilar” if data show that, among other things, the product is “highly similar” to an already-approved biologic.
Currently, only one biosimilar has been approved in the U.S., with others working their way through the approval pathway.
An interchangeable biologic drug is biosimilar to an FDA-approved reference product and meets additional standards for interchangeability. An interchangeable biologic may eventually be substituted for the reference product by a pharmacist without the intervention of the health care provider who prescribed the reference product.
At this point however, no biosimilars have been designated as interchangeable in the U.S. Work is underway to enable this process, but there is much to be done before this happens.
Americans rely on strict oversight by the FDA to ensure the safety of biosimilars. The FDA has made it clear that approved biosimilars, like all traditional and biologic medicines, must be held to a very high standard and that interchangeable biosimilars will meet additional requirements in keeping with BPCIA provisions.
FDA applies to the biosimilar approval process the same “highly similar” analytical standards applied to all biologic approvals. This standard is conceptually the same standard currently applied to brand biologics undergoing manufacturing changes—a showing of similarity between batches of active ingredients before and after the change. This enables the FDA to conclude that batches have no clinically meaningful difference, and that they retain the same safety as the product before the change was made.
Patients, doctors, and others can be assured that biosimilars will be safe, effective, high quality alternatives to costly brand biologic drugs. Similarly, before interchangeable products are available to patients, they will pass extensive tests to ensure they have the same high levels of quality, efficacy, and safety as the original drug.
Biosimilars now are available in more than 60 countries around the world. As governments cope with aging populations and an increase in chronic disease, the demand for affordable biologic alternatives has continued to grow. The introduction of safe and effective biosimilar therapies into markets around the world has proven to reduce healthcare costs while delivering lifesaving treatments to patients in need.
In the European Union, the European Medicines Agency (EMA) laid out a framework for developing and marketing biosimilars in 2004. Since then, 19 biosimilar drugs have been approved and used by patients. Total sales of biosimilars in the EU approached an estimated $500 million through 2014.
Since they were introduced, biosimilars have been used broadly throughout the EU. Cost savings in Europe from biosimilars is estimated to range from $16 billion to $43 billion by 2020.
While there are many similarities between the U.S. and EU approval processes, the EMA has not yet created a designation for interchangeable biologics.
Resources & References
- The Next Frontier for Improved Access to Medicines: Biosimilars and Interchangeable Biologic Products. The Biosimilars Council, a division of GPhA. April 2015.
- PCMA Statement on the FDA Advisory Committee’s Vote to Approve the First U.S. Biosimilar. PCMA. January 2015.
- White Paper: How FDA Can Increase Competition Among Brand, Generic and Specialty Medications. PCMA. November 2014.
- Brill, A. Considerations of the FDA’s Impact on Competition in the Drug Industry. Matrix Global Advisors. November 2014.
- Health Care Advisory: Update on Biosimilar Reimbursement Pathways: CMS Guidance and Outstanding Issues. Alston & Bird LLP. July 2015.
- Biosimilar Competition in the United States: Statutory Incentives, Payers, And Pharmacy Benefit Managers. Health Affairs. February 2015.
- Biosimilars. U.S. Food and Drug Administration. 2015.
- Biologics: Bigger and More Complex (infographic). OptumRx. 2015.
- Biosimilars: Life in the Slow Lane? OptumRx. 2014.