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What will manufacturers have to do to ensure the continued uptake of biosimilars?
Biosimilar manufacturers face a multitude of R&D and market access hurdles that pose a threat to their products’ market potential as well as the associated return on their investment. These hurdles include an expensive and complex manufacturing process, continuously evolving guidelines for regulatory approval, patent disputes, and barriers to substitution of biosimilars for their reference products in most major markets. For quite some time, manufacturers of originator biologics have relied on such hurdles to stave off biosimilar competition and protect their product’s market share.
Moving forward, however, branded biologic manufacturers should not expect hurdles for biosimilars to remain so high. For instance, continuous advancements in technology and greater clarity regarding regulatory requirements will likely make biosimilar development more streamlined. Similarly, patent litigation strategies may yield short-term success for some organizations, but this is not sustainable, as it will require substantial resources, particularly as more competitors enter into this space. In addition, while regulators in global markets will likely remain cautious in designating biosimilars as interchangeable, their level of confidence in making these decisions is only likely to grow as more real-world evidence becomes available. Along these lines, new data from an independent study sponsored by the Norwegian government adds to the body of real-life clinical evidence that switching patients to biosimilar infliximab is effective and well-tolerated across multiple indications (1).
More broadly, public and private payers across the globe increasingly view biosimilars as low-hanging fruit in their efforts to reduce steep drug costs and promote patient access to life-changing treatments. It is not surprising, therefore, that national governments in the European Union and private payers in the United States are focused on creating incentives for physicians, pharmacists, and patients to prescribe, dispense, and use biosimilars, respectively. To date, some mechanisms to incentivize biosimilar uptake have demonstrated success, while in other cases, the impact remains to be seen. This article takes a closer look at these mechanisms and discusses the implications of continued biosimilar uptake for biosimilar manufacturers.
Unlike traditional small-molecule generics, which generally replace brand-name drugs once they are approved, the adoption of biosimilars across the EU has been rather mixed, varying significantly across countries and products (2). A primary reason for this trend is the considerable variation that exists across the region in terms of payer policy approaches.
Not surprisingly, discounting has been shown to play an important role in biosimilar adoption. For instance, in Norway, the recent uptake of Remsima, a biosimilar version of infliximab, was strongly linked to the discount offered. As Remsima discounts increased to 70% from 40%, the market share increased to almost 80% from less than 10% (3). While discounting is likely to remain a contributor to biosimilar uptake, it is not the only factor. In fact, previous analysis of biosimilar uptake and discounting revealed only a weak correlation between price reductions and biosimilars’ market share in individual countries (4).
As with generics, policies and incentives on the part of health authorities can be as critical as discounts to the successful adoption of biosimilars. Since biosimilars were first introduced more than 10 years ago, distinct mechanisms have emerged for influencing biosimilar price and uptake.
National and regional tenders
Tendering remains a common procurement process across much of Europe; this is no different in the case of originator biologics and biosimilars. Varying concerns over the interchangeability of biosimilars and reference biologics, however, have resulted in different tendering policies that have in turn impacted the extent of biosimilar penetration. For instance, in countries such as Poland where there are no guidelines restricting biosimilar substitution, “winner-takes-all” exclusive tenders are used (5). Such tenders, at least in part, explain why biosimilars account for as much as 80% of infliximab use in this market (6).
In other markets such as Germany and Spain, which currently forbid interchangeability, national- or regional-level tenders have only had a limited impact on biosimilar uptake. In these markets, non-exclusive tenders are conducted that typically include both the originator biologic and one or more biosimilars on formulary (7). Thus, these tenders allow biosimilar manufacturers to compete only for naive patients while also allowing physicians to prescribe based on personal choice and guidelines.
It’s true that the impact of tenders on biosimilar penetration has been mixed to date and less successful in promoting use relative to small-molecule generics. As confidence in biosimilars continues to grow and concerns over interchangeability are addressed, however, tendering will likely play a key role in driving biosimilar uptake across the EU moving forward.
Automatic substitution is one mechanism that has not yet gained significant traction outside of a few select areas, and even in those cases, it has been difficult to enforce. Generic substitution by pharmacists is standard practice across much of Europe. The same cannot be said for biosimilars, however, due once again to safety and efficacy concerns associated with switching. In fact, a number of countries, such as the United Kingdom, Germany, Spain, and Sweden, have gone as far as banning this practice, particularly for existing patients (8).
France legally permits automatic substitution in limited cases but has been unable to implement this policy (8). Australia also permits in-pharmacy substitution in the absence of evidence specifically addressing interchangeability; however, the process allows for patient and prescriber choice and is not automatic (9). Even in the US, a predominant laggard in the biosimilar space, legislation has been passed in multiple states allowing automatic substitution for interchangeable biosimilars (10). This legislation is not meaningful, however, until biosimilar manufacturers can demonstrate interchangeability, which is likely a few years away considering guidance from FDA is not expected until late 2017.
Automatic substitution represents a most extreme tool for payers to influence biosimilar uptake. Given the aforementioned concerns as well as challenges regarding implementation and compliance, this mechanism is unlikely to be implemented over the next three to five years.
Prescribing quotas and use of incentives
Under biosimilar quota systems, physicians are incentivized to meet minimum thresholds for biosimilar prescription volume. These incentives can be in the form of financial rewards and/or exclusion from audits that can result in penalties for physicians/hospitals whose prescribing fail to meet certain utilization targets.
Similar to other mechanisms, quota systems have achieved mixed results in terms of driving biosimilar uptake. In Italy, quotas have been less impactful, which is not surprising because they are not binding and incentives/penalties are poorly defined (6). In sharp contrast, Germany has a comprehensive physician-centric approach to help with biosimilar uptake that relies on quotas, monitoring systems, and educational program for physicians (11).
Under this system, physicians’ biosimilar prescription patterns are monitored and physicians can share in the savings if quotas are surpassed. Additionally, regional physician associations play an active part in educating physicians and setting progressive clinical standards of practice with respect to biosimilars (11). This combination of various biosimilar policies likely explains why Germany has been among the most successful in stimulating biosimilar uptake. Moving forward, other countries may look to replicate such a system thereby creating greater opportunity for biosimilar manufacturers to compete.
Novartis’s Zarxio is the only biosimilar currently being marketed in the US. Thus, it’s not surprising that the US continues to play catchup with European and other global markets in terms of biosimilar access and uptake. Longer patents, intellectual property disputes, and delayed regulatory guidance are just a few of the reasons why the US biosimilar market lags behind these other countries.
Nevertheless, as patents on biologics continue to expire and greater clarity on regulatory requirements (e.g., interchangeability) is achieved, access to biosimilars is expected to increase. In fact, two new biosimilars-Eli Lilly/Boehringer Ingelheim’s Basaglar and Pfizer’s Infectra-are expected to hit the US market in 2017. Two other biosimilars-Sandoz’s Erelzi and Amgen’s Amjevita-could closely follow, pending the results of ongoing patent litigation. However, as seen in other markets, simply providing access to biosimilars does not ensure their uptake.
In the US, payers have relied on formulary controls such as tiered copays, step edits, and prior authorizations for years to influence generic adoption and use in an effort to better manage costs. Based on the recent actions of some major payers, most notably CVS Caremark and UnitedHealth Group, it appears as though similar mechanisms will be used for increasing biosimilar uptake (12). For instance, both organizations decided to exclude Amgen’s white blood cell-boosting drug Neupogen in favor of Zarxio. A similar decision was made regarding Basaglar, a cheaper follow-on form of insulin sold by Eli Lilly, replacing Sanofi’s Lantus for the treatment of diabetes.
Biosimilars are finally starting to enter into the equation with respect to payers’ strategies for curbing costs and saying “no” to manufacturers’ high-priced biologics. While prescribing quotas and tenders are not likely to play a role in driving biosimilar uptake in the US, payers have other means to achieve this goal, and initial signs suggest they intend to use them.
Biosimilar manufacturers may be tempted to simply rely on some of the aforementioned mechanisms to drive the uptake of their products. However, such an approach will not guarantee success, particularly with originator manufacturers willing to go to great lengths to preserve their share of the market, often worth billions of dollars to their bottom line.
To appeal to the full range of stakeholders and promote product adoption, biosimilar manufacturers must be able to articulate what they are bringing to the table aside from just a lower-cost alternative. Unless physicians truly understand the clinical and economic implications of biosimilars, they will most likely limit their use with patients.
What this means for R&D functions is that they will need to generate data demonstrating how long-term use of the biosimilar and switching between the branded and biosimilar agent affects efficacy and safety. In the absence of these data, already skeptical physicians and patients may be unwilling to make the switch.
Commercial and medical affairs functions will also have an important role to play in educating opinion leaders around product nomenclature, product attributes, and comparisons to reference drugs. Educational initiatives should aim to dispel the misconception that biologics and biosimilars are structurally and therapeutically identical to their reference drugs, and to promote a better understanding of their differences in order to improve patient care.
At an organizational level, biosimilar manufacturers will need to determine the extent to which they should offer the same wrap-around market support programs that makers of branded biologics currently provide. Value-added services have become a means of differentiation for biologics, particularly those in crowded therapeutic areas, while also raising the bar for biosimilar manufacturers looking to gain market share. These services include patient education programs focused on product use and storage, compliance programs aimed to help physicians maximize outcomes, payment assistance programs, as well as additional services supporting pharmacists and the supply chain. Thus, success for biosimilar manufacturers requires not only that their product be equally effective and safe, but that their marketing strategy must also include similar services and value-adds as well.
1. K. Jørgensen et al., “LB15-Biosimilar Infliximab (ct-p13) is Not Inferior to Originator Infliximab: Results from the 52-week Randomized NOR-SWITCH trial,” Abstract presented at 2016 ACR/ARHP Annual Meeting, October 22, 2016.
2. S. Morton, A. Stern, and S. Stern, “The Impact of the Entry of Biosimilars: Evidence from Europe,” Harvard Business School Working Paper, No. 16-141, June 2016 (Revised July 2016).
3. D. Stanton, “Biosimilar Discounts and Switching will Wipe-out J&J’s Remicade in Norway, says regulator,” biopharma-reporter.com, October 16, 2015.
4. IMS Health, The Impact of Biosimilar Competition, June 2016.
5. Generics and Biosimilar Initiative (GABI), “What Pricing and Reimbursement Policies to Use for Off-patent Biologicals?-Results from the EBE 2014 biological medicines policy survey,” GaBI Journal, 4(1):17-24, 2015.
6. A.V. Pinheiro et al., “Anti-TNF Biosimilars in Europe: What Matters Beyond Price?” BioProcess Online, August 16, 2016.
7. GfK, “Factors Supporting a Sustainable European Biosimilar Medicines Market,” September 9, 2014.
8. PK. Thimmaraju et al., “Legislations on Biosimilar Interchangeability in the US and EU-developments far from Visibility,” GaBI Online, January 6, 2015.
9. “Australia’s PBAC Backs Enbrel Biosimilar Brenzys,” thepharmaletter.com, August 23, 2016.
10. National Conference of State Legislatures (NCSL), “State Laws and Legislation Related to Biologic Medications and Substitution ff Biosimilars,” September 15, 2016.
11. M.J. Renwick et al., The Lancet Oncology, 17(1); e31-e38 (January 2016).
12. Reuters, “UnitedHealth Trims Drug Coverage, Including Sanofi Insulin,” September 22, 2016.
Michael J. Kuchenreuther, PhD, is a research analyst at Numerof & Associates, Inc., St. Louis, MO, www.nai-consulting.com.
Vol. 29, No. 12
When referring to this article, please cite it as M. Kuchenreuther, "Stimulating Biosimilar Uptake: Implications for Manufacturers," BioPharm International 29 (12) (December 2016).