Report Details Challenges Facing the US Biosimilars Market

A new report, prepared by Matrix Global Advisors for the drug maker Boehringer Ingelheim, says that unless the US biosimilar market makes progress in addressing a number of barriers to biosimilars, these cost-saving products will not reach their full potential.

According to the report, 15 of the 20 top-selling biologics in the United States will be exposed to competition after losing patent protection by 2020, and $37 billion of US spending on biologics will be at risk of competition between 2019 and 2022. However, potential risk does not necessarily mirror actual competition; just 12 US biosimilars are approved to date, and only 4 are launched.

Click to see a chart detailing US biosimilar approvals.

Furthermore, the United States faces unique challenges to biosimilars that are not observed elsewhere. First, the authors note, is the challenge posed by the “complex, opaque contracting practices brand biologics manufacturers pursue” that can limit the price advantage of a biosimilar entering the market. The report points to Pfizer’s charge that Johnson & Johnson has engaged in unfair contracting practices that have effectively excluded biosimilar infliximab from formularies as an example of such practices. Furthermore, the report states that “There also have been suspicions that brand biologics manufacturers are using a tactic known as counter-detailing, by which they send representatives to physicians to raise doubts about biosimilars.”

Before a biosimilar can even reach such a stage, however, its manufacturer faces the hurdles posed by high development costs—approximately $100 to $200 million per product—and considerable uncertainty about risks and costs related to regulatory approval and market access. Pricing products, too, poses a challenge, as discounts appear to be linked with market share, but experience with the 4 launched biosimilars is limited.

On the policy front, the authors say that “discouraging” CMS policies during the early years of the biosimilars pathway impacted developers’ decision making, delays in FDA’s publication of relevant guidance has contributed to regulatory uncertainty, and patent litigation has delayed market entry. Notably, the report calls state laws on biosimilar substitution barriers to uptake: “While these law [sic] ostensibly encourage substitution, many actually throw up impediments like requiring that doctors and patients be notified when a substitution occurs, a requirement not necessary for small-molecule drugs.”

Stakeholder education, too, says the report, is a substantial barrier. In addition to a lack of provider and patient education on biosimilars, employers who select health plans for their workers may also lack awareness about biosimilars. Those who are aware may be uncertain as to how to achieve savings through these products.

The report suggests that, to overcome these hurdles, payers should adopt long-term thinking on negotiations; institute policies (including tiering) that will encourage biosimilar use; and create incentives for providers, pharmacies, and patients to gain experience with biosimilars. Employers should analyze reference product utilization to identify cost-saving opportunities, educate employees, and require biosimilar coverage in contracts. Policy makers should ensure fair competition and promote biosimilars as safe and effective, and Congress should limit “frivolous” patents on drugs. Finally, manufacturers should offer competitive terms and favorable pricing, and provide education to patients and providers.

“Biosimilars offer incredible health and economic opportunities in the United States, but unless substantial barriers are surmounted, these opportunities will not be fully realized,” conclude the authors.