Biosimilars May Play an Important Role in Achieving ACA Reform Goals, but Challenges Remain

In a paper published in Cancer Care Management and Research, researchers examine the progress that the United States has made toward reforming healthcare since the passage of the Affordable Care Act (ACA) in 2010, with a particular focus on the role that biosimilar products may play in achieving the ACA’s 3-fold goal of increasing access to treatment, controlling costs, and improving patient care.

The report’s authors note that since the implementation of the ACA:

• Approximately 20 million Americans have gained health insurance coverage.
• The United States has experienced a sustained period of slow growth in healthcare spending per enrollee.
• Cost reductions have been appreciable in Medicare and Medicaid.
• Medicare spending has declined per beneficiary.
• Improved health outcomes have demonstrated improved quality of healthcare delivery.
• Accountable Care Organizations (ACOs), groups comprising physicians, hospitals, and other providers seeking to deliver coordinated care to Medicaid beneficiaries, have been established.

The authors note a lack of comprehensive data on health outcomes before and after the ACA’s implementation, however. They also highlight the fact that, though insurance coverage has grown, the level of individual coverage remains low. Out-of-pocket (OOP) costs have increased, and the expanded coverage of high-risk patients has resulted in cost increases. Furthermore, the future of the ACA is in flux in the current US administration, though the report’s authors suggest that the ACA’s aims of expanded coverage, controlled costs, and improved care quality are likely to endure under any new legislation.

Regardless of whether the ACA is repealed or replaced, the authors note, the affordability of biologic products is of high concern to the US healthcare system. Biologics demonstrate significant improvements in patient care, and can help prevent expensive interventions and produce lower costs overall. However, biologic products are also more expensive and more difficult to manufacture than small-molecule drugs, a fact that can increase treatment costs. Biosimilars—which are highly similar to their reference products and which can achieve equivalent therapeutic results at a lower price point—have the potential to control the costs of biologic therapies.

While uptake of biosimilars in the United States has been slow to start, the United States may follow European examples of strong cost savings; biosimilars could, the authors say, save the US healthcare system $44.2 billion between 2014 and 2024. The report’s authors also suggest that the reductions in healthcare costs to payers will in turn lower premiums and reduce OOP costs for patients, with a subsequent increase in patient access and greater patient adherence to treatment protocols.

However, biosimilars face substantial barriers to provider uptake in the US marketplace. One industry-sponsored survey shows that some clinicians were reluctant to switch from a reference product to a biosimilar, especially in cases of rheumatologic and immunologic disorders. Many professionals noted that they would require long-term evidence on safety and immunogenicity of biosimilars before considering using such agents to treat chronic disorders. With respect to the treatment of acute diseases, however, many clinicians felt that biosimilars would increase patient access to a broader range of appropriate treatments at a controlled cost.

Biosimilars also face financial disincentives to adoption; in oncology, for instance, physicians and institutions may choose to use reference products because of their higher markup. Hospitals often profit from administering expensive infusion medicines because the markup of an infused product is greater in an inpatient setting than in a physician’s office. This practice may result in a disincentive to prescribe biosimilar products in order to take advantage of greater potential profit. However, new value-based reimbursement models, such as the Oncology Care Model, reduce incentives for clinicians to use higher-cost reference products and encourage providers to contract with biopharmaceutical manufactures, a practice that could push providers to adopt lower-cost biosimilars.

Medicare reimbursement policies may also affect biosimilar uptake when monoclonal antibody biosimilars (etanercept and adalimumab) enter the US market; while currently approved biosimilars are covered under Medicare Part B benefits, new biosimilar products will be covered under Part D, and will be subject to the so-called “donut hole” or coverage gap (during which enrollees will pay 45% of the discounted price for branded drugs). This may result in cheaper biosimilars representing higher OOP costs for patients. In order to incent patients to adopt biosimilars, patients may need to realize some of the expected savings from biosimilars through lower OOP costs. Avalere Health suggests that the United States either require manufactures to provide discounts for biosimilars for patients affected by the Part D coverage gap, or create a formulary tier for biosimilars that would represent reduced cost-sharing for patients.

Payers, too, see uncertainties in the potential for cost savings presented by biosimilars. They are concerned that financial incentives may lead to overuse of biologics and biosimilars, resulting in increased aggregate costs for treatment even as unit prices for drugs drop.

Other market access barriers to biosimilars include the speed of the regulatory approvals process, the amount of litigation undertaken by manufactures of reference products, the readiness of stakeholders to adopt biosimilars, and the level of provider education about biosimilars. Post-approval safety studies and real-world data collection, the report’s authors say, will be necessary to instill clinical confidence and to measure the impact of wider access to biologic treatments.

The report’s authors conclude that, while the ACA has achieved some of its goals, the United States will need to implement new solutions to address rising healthcare costs in the face of growing demand. Increased use of biosimilar products is one such method, the authors write, to expand patient access to treatment, to reduce the costs of prescriptions, and to improve the overall quality of patient care.