The Economic Impact of Biosimilars

Ali McBride, PharmD, MS, BCOP, FAzPA, FASHP: Looking at biosimilars and the economic impact right now, it’s a valuable asset to the patient. One of the key important features is that we’re decreasing cost. Often we talk about high-cost therapies, we talk about utilization of high-cost therapies, because of the curative intent, because they improved outcomes, because of the variation on newer therapies coming into place, which are now establishing a new standard of care.

When biosimilars first were looking to the US market—really kind of obliging to the EU [European Union] data, which had been published for many years—we had seen the overall decreased costs. In some cases ranging from $50 billion to $250 billion in equal savings in the US healthcare market. Those studies were done based on a premise that all the biosimilars were coming to place at a certain point in time. However, we’ve had some delays. So it would be great to see an adjustment on those different pieces as well.

As we implement the biosimilars into the US market as other biosimilars come into the US market, we know competition will drive down costs. And driving down costs, like the old adage, will actually improve patient access. In competition in many cases will help those costs be reduced for patient population as well.

The one thing we fear is that it will be less of an advantage to use biosimilars in the US based on cost reductions. I think those pieces will be an important discussion and an overall piece to address. But the overall look at how biosimilars will come into the US market and decrease cost will be advantageous. But the one piece, even though we’re addressing costs to the patient and the healthcare system, will be the expanded access to other therapies in the US healthcare model.

If we decrease the overall cost of a biologic, we can increase expansion to other therapies, like immunotherapy, the more likely target agents. And giving Peter to pay for Paul—or is it taking from Peter to actually give to Paul in these cases? Sorry for the screw-up on that adage, but looking at that change or transfer of one therapy for another really will help other patients in the long run, something which is not worth that now in the US.

Kashyap Patel, MD: I consider biosimilars to be very valuable assets, particularly with the rising concerns about healthcare cost as a part of an oncological model in which we are responsible for controlling the overall costs and expanding it for our pool of patients. Biosimilars definitely help us a lot in reducing that cost.

Ali McBride, PharmD, MS, BCOP, FAzPA, FASHP: What will the biosimilars have? What will the competition that biosimilars induce lead to cost reductions and also rebates? The piece is something that we still don’t know. The current administration is looking at change in rebate, so that’s something I’ll probably hold off for a full discussion. But we do know there are some contemporary rebate issues right now—both the payers, which have led to a lot of very interesting discussions, and op-ed pieces in the newspaper.

But when we’re taking a look at biosimilars in competition, there will be competition not only between the actual originator products in the biosimilar but also within biosimilars with themselves. That space will have a number of different therapies in there. Again, the advantage will be competition driving down those initial costs. As we expect, there will be competition to have a preference to use 1 biosimilar over another, and that will help decrease cost and actually improve access as well.

Kashyap Patel, MD: Biosimilars have definitely started showing the direction in the ASP [average sales prices]. For example, when we look in the filgrastim space, the same filgrastim is now about 40% less expensive in terms of the ASP to the payer. Similar trends have been observed in pegfilgrastim, as well as in trastuzumab and bevacizumab. We do see biosimilars are reducing the cost anywhere between 20% and 35%, and this is quite a significant saving. When you are in the value-based care model, it does help in addressing part of the budget that we have to be strict to.

Ali McBride, PharmD, MS, BCOP, FAzPA, FASHP: We’re seeing a lot of discussion on biosimilars and cost, and what those reductions are right now. We’ve often discussed for many years what those cost reductions could be, what we’re looking for, some limitation of what it should have been but wasn’t when it first came out. For us looking at biosimilar cost reductions and also integration, it’s going to be dependent on what those look like for a lot of implementation, based on health sites’ institutions.

For example, if you’re looking at maybe a 5% reduction or 10% reduction of biosimilars, that may not be looked upon favorably. You may kind of push yourself away for not utilizing that biosimilar until the prices are lower. Because a large amount of framework was developed to implement biosimilars or change EMRs [electronic medical records] for a new product. So we’ll kind of see how that’s being addressed.

For us there can a potential for increased cost reduction; that would be great. Again, us means the whole US healthcare system. Implementation can be practical as well as manageable for many of these indications and to decrease drug costs. Also, utilization of off-label discussions and patient assistance will help drive down the cost but also improve utilization.

I’ve already talked about a few of these pieces, really enumerating some of the discussions, but the initial cost price that comes up will need to be manageable. If we see large reduction, we’ll see a lot more utilization coming up front.

Kashyap Patel, MD: Biosimilar pricing has really shown the promise that it was holding before. I look at a 40% drop in the ASP over a period of 4 years, which shows 10% decline. Which is great, because even if we look into the healthcare system economics, you wonder if you are able to keep the flack, which is really great for society. When we see 10%, 15%, 20% decline year by year that goes over 5 to 7 years, it does promise a large cost savings for the health system as a whole. When we look at the biologics drug, which could vary from $80 to $100 billion between Medicare and commercial insurance, that could be a substantial savings by the trend that we are seeing in the biosimilar pricing model.