HomeHealth Care NewsLower Cost Biologics Face Obstacles, Says Biosimilars Group

Lower Cost Biologics Face Obstacles, Says Biosimilars Group

Generic drug and manufacturers of biosimilars opposed to the drug-price provisions of the Inflation Reduction Act (IRA) continue to push cost-saving reforms.

The IRA takes government regulation of the drug market in the wrong direction, the Biosimilars Council and its parent trade organization, the Association for Accessible Medicines (AAM), said on passage of the bill by the U.S. Senate.

“The Senate has chosen to replace competition—the only proven way to provide patients relief from high brand-drug prices—with a flawed framework for government price-setting that will chill the development of, and reduce patient access to, lower-cost generic and biosimilar medicines,” said the AAM, in a press release, on August 7.

Similar, Not Identical

Biologics are produced in living organisms, can be costly to develop and manufacture, and cannot be replicated as “generics,” like small-molecule drugs that are usually taken orally.

Biologics include hormones, vaccines, insulin, monoclonal antibodies (mAb), and certain cancer therapies. Biologics are mostly administered by injection or infusion, rather than swallowed like tablets or capsules.

A biosimilar is an FDA‐approved biologic product that is functionally/clinically equivalent to the original, reference biologic. Unlike generic drugs, biologics are complex, and biosimilars are not molecularly identical.

‘Create More Competitive Markets’

In 2007, Congress passed the Biologics Price Competition and Innovation Act, allowing the licensure of biosimilars based on approved biologics.

Today, biologics account for almost half the market for medicines, comprising 46 percent of net U.S. pharmaceutical sales in 2018, according to the Foundation for Research on Equal Opportunity (FREOPP). Currently, more than 20 biosimilars are on the market at costs averaging 50 percent less than their reference biologic.

These products are having an impact on treatment costs, says Allen Goldberg, senior vice president of communications at AAM.

“Biosimilars are helping to create more competitive markets, which in turn, are leading to lower prices for these brand biologics as well,” said Goldberg.

“Through this market competition, biosimilars successfully contributed to $7.9 billion in savings in 2020 and more than $12.6 billion in savings over the last 10 years,” said Goldberg. “In just the past three years, we’ve seen biosimilars cut the growth of spending on oncology medicines in half.”

Overcoming Misconceptions

Acceptance of biosimilars has been a marketing challenge, says Goldberg.

“The single greatest obstacle to greater biosimilar adoption among patients has been the misconceptions surrounding their efficacy and safety,” said Goldberg. “Many patients have signaled these concerns with biosimilars and are choosing to purchase brand-name [reference] biologics at higher prices. Because biosimilars are not identical to their reference products, many may believe that these medicines are not up to the same standards.”

The rigorous approval pathway by the U.S. Food and Drug Administration (FDA) assures biosimilars “have no clinically meaningful differences from the reference product,” said Goldberg.

Furthermore, biosimilars have been used in Europe safely and successfully for more than a decade, says Goldberg.

Do PBMs Block Access?

AAM and the Biosimilars Council are fighting for a level playing field, and one obstacle has been pharmacy benefit managers (PBMs), says Goldberg.

“PBMs continue to restrict patient access to lower cost biosimilar alternatives and instead steer them toward brand biologics,” Goldberg said. “By doing this, PBMs are able to take in greater profits from more expensive medicines under the current rebate structure.”

Despite the challenges, the market for biosimilars is growing, says Goldberg.

“As more biosimilars continue to reach the market, going forward, we expect savings to increase,” said Goldberg.

Biosimilars now account for more than 30 percent of the total market for biologics and are projected to provide $133 billion in savings by 2025, according to data compiled by IQVIA, a market research firm.

Virtual Promotion

The Biosimilars Council has launched a “Biosimilars Patient Resource Center,” a website that explains the FDA approval process and provides patient testimonials. The website also promotes patients meeting with a pharmacist before a doctor visit to learn about biosimilar options.

Such consultations can significantly increase the number of patients who opt for biosimilars, according to a study published in Joint Bone Spine in May.

“Despite several studies proving the efficacy and safety of biosimilars compared with original drugs, switching to a biosimilar remains challenging when the decision is at the discretion of physicians with mandatory consent from patients,” write the study authors. “Educating patients about biosimilars seems important to increase the prescription rate of biosimilars,”

Substitution Proposal

Bipartisan legislation introduced by Sens. Maggie Hassan (D-NH), Tim Kaine (D-VA), and Susan Collins (R-ME) would allow for interchangeability between biologics and some biosimilars in the FDA review process and require biologic makers to share information about market releases.

While the bill and the efforts of the Biosimilars Council are a step in the right direction, more reform is needed, says Gregg Girvan, a resident fellow at FREOPP.

“These are rather modest proposals that probably won’t move the needle much in driving greater biosimilar adoption in the United States,” said Girvan. “Part of this is because patients are shielded from the true cost of drugs through third-party payment of health benefits.”

Intellectual property protection for new biologics is more extensive than for brand-name drugs facing generic competition, says Girvan.

“Laws in the United States afford biologics a longer exclusivity period granted by the FDA than small molecule drugs,” said Girvan. “In short, we need to reform our patent laws, align biologics laws with those for small molecules, and allow automatic substitution at the pharmacy level.” (See related commentary, page 14)


Ashley Bateman (bateman.ae@googlemail.com) writes from Virginia.

Joe Barnett (JBarnett@heartland.org) is a senior editor at The Heartland Institute.


Ashley Bateman
Ashley Bateman
Ashley Bateman is a policy reform writer for The Heartland Institute and contributor to The Federalist as well as a blog writer for Ascension Press. Her work has been featured in The Washington Times, The Daily Caller, The New York Post, The American Thinker and numerous other publications. She previously worked as an adjunct scholar for The Lexington Institute and as editor, writer and photographer for The Warner Weekly, a publication for the American military community in Bamberg, Germany. Ashley earned a BA in literature from the College of William and Mary.


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