With the recent launch of Zarxio™, the pharmaceutical industry has been buzzing about the impact of biosimilar products. But how quickly will biosimilars enter the US market, and will their impact be as strong as some forecasts predict?
Biosimilars are made through a more complex process involving living cells as compared to generic versions of small molecular products, which use an exact copy of the chemical makeup of the original. Because manufacturing techniques are considered proprietary, there are slight differences between reference products (the original, branded product) and the biosimilar, thus the first set of hurdles to rapid uptake.
FDA guidance has defined requirements for a product to demonstrate biosimilarity to a reference product; however, final guidance around interchangeability and labeling of biosimilars remains open. The gap in defining interchangeability opens a host of clinical hurdles that biosimilars will face in patient and physician adoption, adding layers of complexity to diseases and treatments that already require heavy time investments around treatment decisions. Indications for biosimilar products may be different from the reference product; multiple biosimilars may be considered equivalent to the reference product, but not to each other; sub-populations, including treatment-naive or -experienced patients, may have different responses to reference vs biosimilar products.
Beyond clinical hurdles, regulatory and payment hurdles are additional speed bumps that biosimilar products will need to pass. Unlike the European Union, where biosimilars have been available for years and there are centralized price and access controls, the US market is more fragmented and local pricing and reimbursement will impact prescribing. The recent consolidation of large payer organizations nods to stronger bargaining power for drug pricing, but discounts for biosimilar products are not expected to be as steep as price differences for traditional small molecule products. Novartis has said they will sell Zarxio™ at a 15% discount compared with Amgen’s Neupogen® making it a lower-cost alternative, but requiring large volume shifts before significant savings will be realized. Even in the European Union, biosimilar pricing has been modestly lower than reference products, price erosion has been gradual, and the shift of market share to biosimilar products has varied widely across therapeutic categories.
Additional legal challenges will likely also slow momentum of biosimilar products. Although patent infringement rulings were in favor of Novartis, nuances in the manufacturing of biologics will continue to introduce new hurdles for biosimilars –disclosure on proprietary manufacturing processes that impact the efficacy of biologic products will continue to provoke relations between pharmaceutical companies and manufacturers of biosimilar products. Beyond the legal risk required, the high cost of manufacturing biosimilars will create additional barriers to entry.
In favor of biosimilars are provisions within the Affordable Care Act (the 2010 passage of the Biologics Price Competition and Innovation Act opening the door for biosimilars), payment reform and bundled payments supporting physician use, and the increased scrutiny on the value of healthcare in the United States.
Other questions remain open: will patient education and support for biosimilars match the reference product, or will specialty pharmacy and large health systems pick up patient support services? How will the integrity of pharmacovigilance be impacted when switching has occurred? What will happen when physicians need to overturn automatic substitution for a specific patient, despite interchangeability?
The introduction of biosimilars has opened the door for many changes to our healthcare landscape, with the promise of large savings in the future. Yet there are many questions to be answered and changes to be made across a large and fragmented system before biosimilars take a majority share, spanning legal and regulatory hurdles, clinical considerations, manufacturing challenges, pricing and contracting incentives — So for now, you probably won’t feel a thing.
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