2017: A Standstill Year For Biosimilars?
By Anna Rose Welch, Editorial & Community Director, Advancing RNA
Last week I ventured out to CBI’s 12th Biosimilars Summit. Given the unseasonable warm streak we’ve been observing lately in the Pennsylvania snow belt, it didn’t occur to me to check the weather in hilly southern Pennsylvania prior to starting my six-hour drive. Nine hours later, after an accident took me from the turnpike to unpopulated, snow- and ice-covered country roads plagued by multiple bridge floodings; GPS rerouting mishaps; and cell-service fade-outs; I finally arrived in Alexandria, Virginia. (I won’t lie, after several hours of hyperventilation, I began wondering how much I still liked my job.)
But within the first 20 minutes of starting the CBI conference the next day, I knew it was bound to become one of my favorites in my tenure with this publication. It was a small conference, and like all the others I’ve attended, it had an impressive line-up of speakers from a variety of stakeholders, including physician and patient groups, payers, small biosimilar companies, and Big Pharma. But instead of running the event as a series of well-oiled presentations with a few minutes at the conclusion for questions, each presentation was structured as a discussion to get all attendees interacting with one another and the speaker.
Despite the many positive steps we’ve taken to establish the biosimilar industry today (i.e., FDA guidances and approvals), it seems as though the success of the biosimilar market in the U.S. is still looking hazy. Every event I’ve gone to has focused on the challenges facing the industry and concerns over the different regulations being established. But this conference felt particularly realistic in how it approached those issues.
I observed three themes which ran through all presentations equally, regardless of which stakeholder was presenting: risk, uncertainty, and frustration.
Payers' Responses To The Current Biosimilar Market
As this event was centered around developing “strategic and tactical decisions for long-term success” in the biosimilar market, it shouldn’t be a surprise that risk and uncertainty were prominent themes. These two themes are inherent in any new business venture or experience. Biosimilar companies, in particular, are afflicted by a number of external risks and uncertainties surrounding patient, physician, and payer response and uptake; litigation, and other originator defensive strategies; as well as market evolutions. It’s also important to acknowledge that the U.S. — often a market leader — is following the rest of the world in establishing a biosimilar market. There are also plenty of unknowns in terms of future FDA regulations and the repeal of the Affordable Care Act (ACA) as the new administration settles in.
But there’s also a certain amount of frustration — not only from companies battling legal challenges and quickly evolving markets, but also from payers. I’ve often heard it said — perhaps as reassurance in the face of the many biosimilar unknowns — that U.S. payers will be the ones to push biosimilar uptake. And CVS’ and UnitedHealth’s respective formulary decisions certainly went a long way to integrating biosimilars into the treatment landscape for new patients. But we shouldn’t expect these large payers’ actions to be a rule for others. Watching and waiting is still a large part of the U.S. payer mindset. And should payers be asked how they plan to handle biosimilars, many likely won’t have a clear-cut answer.
In particular, Ambrose Carrejo from Kaiser Permanente and Sheila Arquette of Independent Health expressed disappointment in the pricing of biosimilars. Of course, they acknowledged it will take years and more competition to drive sharper discounts. But payers’ experience with biosimilars thus far has been informed by their experiences with generic drugs. Kaiser's Carrejo explained that, at the start of the U.S. market, biosimilars were equated with generics. As such, there was too much optimism that biosimilar prices would be lower right-off-the-bat. In some cases, this optimism was reflective of a lack of knowledge about biosimilars’ complexity.
With such small discounts available (from which the patient is unlikely to realize savings), and patient hesitancy, biosimilars could give smaller payers pause. As Independent Health's Arquette emphasized, concerns over low biosimilar discounts could perhaps be mitigated — but it will take, frankly, impressive amounts of communication and education. It could come down to taking the data from an FDA-approved biosimilar and selling the “biosimilar story.” There is always the chance dispelling patient concerns about efficacy, in turn garnering uptake, could make up for 15-percent discounts.
But overall, as Inflectra enters the U.S. market, Arquette also expressed skepticism. As reference companies approach a payer to renew their contracts for the next year, there are a number of factors a payer, such as Independent Health, needs to weigh. One of these is if savings for the patient would overcome the potential inconvenience of a switch in therapy.
What Can Biosimilar Companies Expect For 2017?
The overarching message I took away from this conference was that it will be key in 2017 for companies to temper expectations and become familiar with uncertainty. As the summit’s chairman, Edric Engert, SVP of biosimilars at Teva, described, players in any industry, but especially the biosimilar industry, will never have certainty.
In 2017, there will be a number of developments likely to impact the future of the biosimilar market. For one, companies will have the opportunity to pursue interchangeability. But we likely won’t see an interchangeable approved and released on the market this year (though I’d love to be proven wrong here).
Later this year, the U.S. will get a Supreme Court ruling on the patent dance and the timing of the 180-day notice of marketing. We’ll also hopefully determine what will become of the ACA following repeal — though many attendees at the CBI conference seemed optimistic the legislation will be revised, rather than disappear entirely.
But one speaker posed an important question I feel the biosimilar industry is facing in particular: Will 2017 be a damper for biosimilars?
The answer to this question will ultimately depend on how the aforementioned legal, healthcare, and development challenges unfold in 2017. Teva’s Engert put it best when he described the upcoming year as “an inflection point” for companies. We won’t so much be hitting a “pause” button, but 2017 will be a time for many companies to slow down and consider just how involved they wish to be in the biosimilar market.