International research suggests that policies requiring nonmedical switches or automatic substitutions with biosimilars generally lead to rapid shifts in dispensing patterns and large cost reductions for public payers, but potentially increased costs related to health services utilization
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Study Models Biosimilar Savings in Ontario From Mandatory Switching
Authors of a new study estimated significant savings from biosimilars in Ontario based on deep price discounts and mandatory switching programs.
Ontario in early 2020 became the third Canadian province to begin switching patients on reference (originator) drugs to biosimilars; however, the move did not mandate switching all patients to biosimilars if they were already started on reference products. In a recent study, investigators estimated potential savings from stronger substitution policies.
Using pharmacy claims data for biologics reimbursed under provincial drug insurance, investigators modeled spending and patient utilization according to mandatory nonmedical biosimilar substitution and substitution for new users only. They also considered the availability of adalimumab and insulin glargine biosimilars based on price discounts as low as 25% of the reference product price, which they said was achievable based on studies of biosimilar adoption in other regions.
Their analysis covered the 2-year period from January 2018 to December 2019 and also forecast trends to December 31, 2020.
Findings
A mandatory nonmedical biosimilar substitution policy for inflammatory diseases would have affected 7209 patients during the 3-year period and saved $238.6 million. Had the substitution policy applied only to new users, 757 patients would have been affected and the savings would have been limited to $34.2 million. With the hypothetical availability of an adalimumab biosimilar, the 3-year savings under mandatory switching would have increased to $645.9 million, and 12,928 patients would have been affected, based on all biosimilars being priced at 25% of the reference product price.
Not including adalimumab biosimilar savings, the expansion of nonmedical mandatory switching to include an insulin glargine biosimilar would have saved $288.7 million, investigators said.
The importance of biosimilars—equally effective and safe as reference drugs—for savings and access to health care has long been recognized, but in Canadian provinces uptake of these agents has been tepid, and so in recent years British Columbia and Alberta, and now Ontario, have begun mandating that patients use biosimilars. The growth of use of biologics, among the most costly of drugs, also has driven this trend.
In 2018 biologics accounted for 1.5% of claims in Canadian public health programs, but 27.3% of drug costs. In Ontario, use of biologics increased 462% from 2010 to 2019, and public spending on biologics in the province was forecast to reach $1.4 billion by 2021.
“Although biologics are improving outcomes for patients, their increasing use and high costs threaten the financial sustainability of public drug programs,” authors of the study wrote.
The study included publicly funded prescriptions for infliximab, etanercept, and adalimumab for rheumatic conditions or inflammatory bowel disease (IBD). In their analysis of 2018 claims information, investigators found that 84.1% of users of etanercept and 86.7% of users of infliximab were treated with a reference product vs a biosimilar.
When it came to starting treatment for patients with rheumatic conditions or IBD, reference products still retained traction: 39.5% of patients starting etanercept and 59.8% of patients starting infliximab began with a reference product rather than a biosimilar.
Analysis
“Overall, the considerable cost savings and number of patients affected by the biosimilar policy changes examined in this study are within the range of estimates found in other jurisdictions, both nationally and internationally,” authors of the study wrote.
“International research suggests that policies requiring nonmedical switches or automatic substitutions with biosimilars generally lead to rapid shifts in dispensing patterns and large cost reductions for public payers, but potentially increased costs related to health services utilization,” they said.
An important factor when contemplating a switching policy is that manufacturers of reference products often provide funding for some patient care and medication administration costs, as well as co-payment assistance, investigators said. “Therefore, any policies introducing mandatory changes in therapy need to allow for scaling up of these services for the corresponding biosimilars,” they wrote.
Although Ontario public drug programs require that new users of infliximab and etanercept start on biosimilars, the reality is this policy is subverted by a hospital practice of starting patients on reference products that are obtained for relatively low cost.
“As our model indicates, considerable additional savings could be achieved if the intended new-user biosimilar policy was fully enforceable,” the authors wrote.
Adalimumab biosimilars became available in Ontario in February 2021.
Further Reading
In a recent study, investigators shed light on helpful practices and considerations for pharmacists when switching patients to rheumatology biosimilars.
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