With Payers Under Pressure, Biosimilars Must Demonstrate Their Value

In recent years, payers in Europe have been increasing their scrutiny of new therapies as increasingly high-cost drugs come to the market. And while the United States does not have the same cost constraints as the single-payer health systems, it too faces heightened pressures to lower costs in order to afford innovative therapies.

At the SMi 9th annual conference on Biosimilars and Biobetters, held September 26-27 in London, United Kingdom, Omar Ali, BSc(Hons)Pharm, DipClinPharm, University of Portsmouth, said that, in Europe, high-cost drugs to treat hepatitis C marked a turning point at which payers realized that promising cures were hollow victories if using them came at too high a price for the health system to afford. The United States, he added, is following suit, with the Institute for Clinical and Economic Review (ICER) gaining traction with its health technology assessments.

Read more about ICER assessments.

As a result of skyrocketing prices, payers have become a more crucial part of the decision-making landscape, and this fact has ripened the climate for drug developers—including biosimilar makers—to craft a compelling case for why their products bring value to the healthcare system. “We’re seeing a movement from volume to value…as drug pricing goes higher, this will become more critical.”

Ali explained to attendees that, in the United Kingdom’s National Health Service (NHS), in cases in which gain-sharing agreements are not in place, switching to a biosimilar may not allow a hospital to share in savings, and thus presents no incentive for physicians to switch their patients. In order to find traction, then, biosimilar developers may need to differentiate themselves in multiple ways. First, they will need to differentiate themselves in terms of price to be included in a tender, but second, they will also need to provide value-added offerings to convince a payer that it is worthwhile to switch patients.

Ali used the real-world example of 2 biosimilar infliximab companies, one of which offered the NHS a shallow discount, differentiating its product by offering added items including dose-banded infusion bags with its product. The other product developer offered no such items, but gave a deeper discount. Different regions of the country adopted different biosimilars in order to choose the product that best addressed their most pressing needs.

In the run-up to biosimilar adalimumab, Ali sees the NHS preparing for “a battle, like never seen before,” in getting the greatest value for its funds spent on the therapy. “I’ve never seen such a coordinated manner in which this is being put forward,” he said, explaining that the health system has prepared guidance on choosing the best-value adalimumab once competition arrives in October 2018, formulary committees are now in place, gain-shares have been established, patient information has been is prepared, and a toolkit for best-value biological implementation is ready for use. Once biosimilars become available, real-time tracking of uptake will be provided by the NHS, and support services with patient homecare will be ready. “We’ve never seen [it] this orchestrated, like a battle call,” he said.

In order for biosimilars to compete within this new context, innovative ways of thinking about contracting may be called for. Said Ali, value-based contracts may provide a useful opportunity for smaller players to gain a foothold in the NHS.

Ali described a case in which UCB, makers of certolizumab pegol (Cimzia) approached an NHS region with a proposal in which the health system would prefer its drug and only pay for the drug product in patients with rheumatoid arthritis (RA) who responded to the therapy, knowing that approximately 70% of patients would not show an adequate response.

UCB allowed the payer to determine its own metric for response—which was agreed to be 3 months plus 1 day of therapy, illustrating an assumption that nonresponders would discontinue treatment before that time.

While the NHS as a whole was enthusiastic about the prospect, individual physicians pushed back against a limit to their choice. Thus, the NHS agreed with prescribers to allow for increased biologic access in RA if providers agreed to use certolizumab pegol in the first line, allowing them to prescribe the drug to patients with moderate and severe RA. Recognizing the clear value to their patients, prescribers agreed, and as a result, certolizumab pegol has gained 75% of the new market for RA, and quickly.

Biosimilar developers could adopt such an approach to incentivizing the use of their product in ever-crowded playing fields, though reference product sponsors are using the same tactic, he cautioned. Harvard Pilgrim has entered into a contract with Amgen that will allow the insurer to pay less for the reference etanercept (Enbrel) if patients score below certain levels based on clinical criterial that will be measured by an algorithm. In return Harvard Pilgrim will exclude biosimilar competition from its formulary.

However, value-based contracts could provide meaningful opportunities for players who are new to busy markets and who may not have a major differentiator for their offering. In fact, he said, they may even help to edge out the competition.