Biosimilar Industry Experts Highlight 2019 Triumphs, Tribulations
By Anna Rose Welch, Director, Cell & Gene Collaborative
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As we close out another year of global biosimilar successes and twists and turns, it’s always important to take stock on just how far we have come and where we still hope to go as an industry. As in years past, I reached out to members of Biosimilar Development’s editorial board to get their perspectives on the past and upcoming year. But seeing as we’re poised to celebrate the 10-year anniversary of the Biologics Price and Competition Act (BPCIA) in March 2020, I also wanted to include as many experts as I could — regardless of their membership to the editorial board. Below you’ll find the editorial board’s & friends’ responses to the first of four questions. As you’ll note, responses to progress in the industry remain mixed; however, there is, arguably, much more optimism present and examples of great market growth cited throughout this brilliant collective’s responses compared to past years.
Over the course of 2019, how have your expectations or thoughts about the biosimilar industry evolved, either positively or negatively? Was there a specific market development that led to this change in your expectations? Please explain.
In Europe, 2019 was an important year: Adalimumab biosimilar medicines have introduced competition in one of the areas where countries used to spend a very significant part of their budgets. This is good news for patients and healthcare in general as it allows more patients to be treated. This intense competitive landscape has also led to evolving tactics and practices in the market (e.g. misleading information), some of which have attracted both medicines agencies’ interest and competition authorities’ scrutiny. We will closely monitor how these situations unfold. Successfully tackling these barriers to biosimilar medicines access to the market will be key to continue to deliver on biosimilar medicines’ value for patients.
- Julie Maréchal-Jamil, Director Biosimilars Policy & Science, Medicines for Europe
The good news is that 2019 saw more approvals and several more launches of biosimilars into the U.S. marketplace. This is very positive news and shows that the biosimilar approval pathway continues to work well.
Additionally, we have seen Congress introduce several bills focused on creating biosimilar incentives. These bills have ranged from $0 copay for Part B patients to an ASP add-on payment for physicians utilizing biosimilars. We also saw bills around inclusion of biosimilar measures within the Medicare Advantage Star Ratings program. While passage remains unclear before year’s end, all of this momentum is important as the U.S. biosimilar market uptake remains sluggish relative to expectations. Given the continued focus on patient affordability and drug pricing, seeing Congress taking action to create incentives for biosimilar use across all stakeholders is a positive step. Biosimilars remain an important, market-based way to drive competition, improve patient affordability, and enhance the sustainability of healthcare systems.
- Molly Burich, Head of Public Policy, Boehringer Ingelheim
The adoption of biosimilars picked up pace as more came to the market over the course of 2019. In Europe and Emerging markets, biosimilars offered opportunities to improve access to more affordable treatment options, allowed cost savings to be re-invested in patient care, and supported the sustainability of healthcare systems. Despite concerns regarding the pricing erosion due to the highly crowded and competitive biosimilar market, Celltrion anticipates this concern could be stabilized in the near future.
Although the U.S. still lags behind Europe in terms of market uptake of biosimilars, Celltrion anticipates that the availability of rituximab and trastuzumab biosimilars in the U.S. will become a stepping-stone to greater successful market uptake. Even though we faced challenges, including rebate traps in the U.S. biosimilar market for chronic disease types, our continuous work with payers to address this issue has gradually reduced these challenges. We expect to overcome these challenges with the availability of our oncology treatments and to see positive momentum that brings transformational change with biosimilar penetration so the healthcare system can see real savings.
- HoUng Kim, Head of The Medical and Marketing Division, Celltrion Healthcare
Access to biosimilars due to restrictive formularies remains the major obstacle for rheumatologists. As comfort with biosimilar adoption grows among physicians, the wall erected by payers and their PBMs (in many cases supported by generous kick-backs from bio-originator manufacturers) has limited patient access to these prescriptions. On the manufacturer strategy and marketing side, we’ve been pleased to see a pivot among biosimilar manufacturers toward community rheumatology settings. It seemed that the initial marketing and pricing focus was on hospitals and facilities, to the detriment of community adoption. The majority of rheumatology patient care takes place in the community setting, and this is where efforts need to be to bend the curve on biosimilar adoption.
- Colin Edgerton, MD FACP FACR, Executive Chairman, American Rheumatology Network
The U.S. biosimilar market is looking more promising with 26 approvals. In November 2019 alone, two biosimilars launched into the oncology space, where we see greater penetration into the innovator’s market share than in immunology. There are now three pegfilgrastim biosimilars on the market creating robust competition, and such competition will increase as more biosimilars are launched. This ultimately benefits patients and government budgets, so there is reason for optimism for biosimilars and their eventual market success. Even so, there remains only 11 biosimilars on the market (as of early December), with barriers for launch due to patent thickets. Other barriers to market uptake still include contracting arrangements with reference product manufacturers combined with physicians’ reluctance to prescribe biosimilars and patients’ hesitation.
- Sue Naeyaert, Consultant, Former Global Government Affairs, Policy, and Pharmacoeconomics, Biosimilars, Fresenius Kabi
One interesting 2019 legal development came out of the Genentech v. Amgen case in the District of Delaware regarding Amgen’s biosimilar trastuzumab product. In that case, Genentech pursued a preliminary injunction to prevent Amgen’s launch of its biosimilar product. In the small molecule arena, preliminary injunctions are often granted in these circumstances, assuming the brand has shown a likelihood of success on the merits of their patent claims. The brand can typically show a likelihood of suffering irreparable harm to its sales, market share, and pricing upon generic launch. In the Genentech case, however, the Court found that Genentech could not obtain a preliminary injunction because it had failed to show that it would suffer irreparable harm upon Amgen’s launch.
First, the Court found that Genentech delayed in seeking injunctive relief over a year after it had received notice of commercial marketing (NCM) from Amgen. This lack of urgency, the Court found, belied Genentech’s claims of the irreparable harm posed by Amgen’s launch. To the extent biosimilar manufacturers continue to use the strategy of providing NCM ahead of product approval, this could continue to factor into preliminary injunction decisions if reference product sponsors do not seek a preliminary injunction shortly after receiving NCM.
Second, the Court found that Genentech’s licensing of other biosimilar manufacturers showed that “Genentech has been able to place a value on the [asserted] patents and has approved competitors entering the market,” meaning that any harm caused by Amgen’s launch could be quantified and compensated with damages rather than being irreparable.
Overall, from a legal perspective, this decision highlights how the differences between the small molecule generic and biosimilars markets might result in a different landscape for the likelihood of reference product sponsors obtaining preliminary injunctions against biosimilar launches.
- Alexandra Valenti, Partner, Goodwin Procter LLP
Expectations have not shifted — biosimilars continue to be an essential component of health care systems, both in terms of expanding access to biologic therapies and addressing sustainability of health budgets. Biosimilar success remains the expectation.
Thoughts continue to evolve alongside the market evolution, however. What’s clearer to me now than it was in the beginning of 2019 is that there truly is no ‘silver bullet’ policy to achieve a successful biosimilar market. Every health system will have a different solution, and even within a system there may be different solutions by molecule or channel.
It is also clearer to me that while there is no ‘silver bullet,’ there is a ‘golden toolbox’ of best practices that can help each health system find the solution(s) that best suit unlocking the potential of biosimilar medicines for improved patient access and healthcare sustainability. This toolbox includes supportive tone from the top and goal-setting, multi-stakeholder engagement and buy-in, focus on policy implementation, monitoring mechanisms, and a feedback loop to ensure policies are adjusted based on learnings.
- Erika Satterwhite, Head of Global Biosimilars Policy, Mylan
I remain disappointed with the slow adoption of biosimilars in the U.S. Decades of experience with biosimilars in other developed countries have led to half a billion patient days of use, with no safety concerns. Over 90 switching studies with more than 15,000 patients have demonstrated no clinical difference with the reference, yet slow adoption remains a problem in the U.S. ($7.2B/year in potential lost savings). In hospital markets, specialty biologicals account for over 50 percent of the drug budget. I was particularly concerned that each biosimilar manufacturer of adalimumab succumbed to the thicket of patents created by the innovator and agreed to settlements prohibiting launch until 2023. I do not view such settlements as a “payment for certainty,” but rather a “payment for delay,” and in this case, a way to increase prices for an additional four years. Price increases for the three marketed anti-TNF agents approved before 2009 have increased by 144 percent between 2009 and 2016. These lost cost savings would be valuable in hospital settings to treat other expensive disorders like Type II diabetes, psoriatic arthritis, and cancers susceptible to CAR-T treatments. Cash flow margins are plunging in hospitals and the government is imposing more financial pressures on their 340-B programs and general reimbursement. Biosimilar savings would help dramatically.
- Ross Day, Consulting Hospital Pharmacist, Former Director of Pharmacy, Vizient
While we have had more launches in 2019, biosimilars continue to struggle for market share in the U.S. As such, we have an on-going confirmation of the misaligned incentives for their use. If we really want biosimilars to contribute to a sustainable multisource specialty market in the U.S. more efficiently and more expeditiously, then we have to revisit these incentives.
Part of this is also reducing the ROI to get to market; for instance, FDA can be more focused in its regulatory expectations – especially in terms of reducing the clinical study burdens. But, ultimately, what matters is how the decisions are made commercially. This may vary by therapeutic area and setting of care, but if short term pricing continues to govern, it is difficult to see how a U.S. market can emerge.
Leadership from the top and clear messages from FDA about the quality, safety, and efficacy of biosimilars and their equivalence to their reference products are needed, and they are needed now. This affirmative messaging is long overdue. And a core message within this is that all biologics vary, and that that is perfectly OK. As Dr. Yim said at a recent meeting, when you receive a single dose of a monoclonal antibody product, you are receiving a trillion different molecules. These doses vary from batch to batch for originators, too.
- Gillian Woollett, Senior Vice President, Avalere Health
In 2019, several larger pharma companies already in the biosimilar market made strategic and commercial decisions to exit some market territories or to close down biosimilars efforts altogether. As we and others have long anticipated, building a sustainable, profitable biosimilars business will require the ability to deliver return on investment with relatively low margins. We believe that a sustainable global biosimilars business at different price points in different markets can be built with the combination of high volume and very competitive pricing. In this way, we plan to generate good financial return while delivering these important medicines to as many patients as possible.
In 2019, the positive market development of UDENYCA (pegfilgrastim) biosimilar capturing nearly 20 percent of the U.S. pegfilgrastim market within its first 9 months, has proven that biosimilars CAN deliver on biosimilar expectations and promises that have been sought for many years in the U.S. This positive development built upon by successful trastuzumab, bevacizumab, and rituximab biosimilar markets in 2020 will further drive stakeholder confidence that biosimilars can be commercially viable and of great benefit to patients and the healthcare system at large.
- Noelle Sunstrom, CEO, NeuClone
2019 was a mixed year for biosimilars. On the positive side, the FDA has made significant progress in implementation of the Biosimilars Action Plan, a landmark document from the FDA that identifies key deliverables to encourage and support the biosimilar industry. This ongoing progress sends a clear message to the American public that the FDA is emphatically behind biosimilars and that the FDA wants biosimilars to be successful. This endorsement is resonating well with many U.S. stakeholders. And of course, the FDA approved a record number of biosimilars in 2019.
However, from a market perspective, only 11 of 26 U.S.-approved biosimilars (as of mid-November 2019) are launched in the U.S. for a variety of reasons, and of those 11, only a small number have been commercially successful. We had expected that biosimilars would be making more of an impact now, four years after the launch of Zarxio (filgrastim-sndz), the first U.S.-approved biosimilar. Some are already claiming that biosimilars are a failure in the U.S. In my opinion, as well as many others, it is far too soon to give up on biosimilars, but we can’t deny that there is a great degree of frustration in the inability to get high quality, FDA-approved biosimilars to large numbers of patients.
- Hillel Cohen, Executive Director, Scientific Affairs, Sandoz
2019 has been a landmark year for biosimilars in the U.S. A record number of approvals with a couple biosimilars launching would normally lead to an overall positive feeling about the state of the industry. However, the initial decision in favor of Enbrel over the biosimilar, Erelzi, was a significant wet blanket over the year’s positive momentum that outreaches far past those two products alone due to where these products are billed. From an employer perspective, we have much more insight into drugs dispensed under the pharmacy benefit, where biosimilars are almost non-existent. The potential savings offered by an Enbrel biosimilar was highly anticipated to help curtail overall specialty spend growth. We fear the judge’s decision, provided the expedited appeal in 2020 fails, will not only hurt current budgets, but deter manufacturers from investing in biosimilars overall. With that said, we will continue our efforts to provide clarity to the general opaqueness of the medical benefit in the hopes that adoption rates improve enough that pro-biosimilar manufacturers remain in the fight to provide much-needed specialty drug competition.
- Matthew Harman, PharmD, MPH, Director of Pharmacy, Employers Health
2019 was a historic year for the biosimilar channel; we saw seven biosimilar launches and nine biosimilar approvals. In the last quarter alone, there were four biosimilars that came to market with one launch (Sandoz’s Ziextenzo) marking the very first time the U.S. has had three biosimilars competing against one reference product. We anticipate that 2020 will usher in a new era of competition and access for the market and establish a proving ground for this channel.
With all of the launches on the horizon, the U.S. will finally be able to see some real competition and potential cost savings that Europe has experienced. To fully achieve a competitive market, there needs to be an even playing field for biosimilars and originator biologics. This will require further alignment on incentives across the supply chain. We must continue efforts to remove legal hurdles, push for parity formulary status, and educate the market about the value biosimilars can deliver. These changes will facilitate uptake and encourage more manufacturers to continue to invest, thus creating better access and affordability.
- Rick Lozano, VP, Biosimilars & Integrated Business Development, AmerisourceBergen
In 2019, we continued to hear a lot about the problem of skyrocketing healthcare costs, but few are doing something about it. Biosimilars are one solution to address healthcare costs and give patients access to safe and effective medicines they need and deserve. There was a mixture of progress and continuing challenges in the biosimilar space during the year. On the positive side, various policies supporting biosimilars have been included in proposed federal legislation, such as:
- The ACCESS Act which eliminates cost-sharing for biosimilars for beneficiaries without wrap-around coverage under Medicare Part B;
- The BIOSIM Act which requires CMS to provide an enhanced ASP-based reimbursement for biosimilar prescribing to providers for a fixed five-year period;,,
On the negative side, as of mid-November 2019, fifty-six percent of FDA approved biosimilars are not available in the U.S. market. For those FDA approved biosimilars that are available in the U.S., market adoption remains slow with some exceptions. Many obstacles for biosimilars in the U.S. still exist along the path that begins with discovery and development. These obstacles continue to arise throughout the process of obtaining regulatory approval and patient access. Contributing causes include lack of education and awareness about the benefits of biosimilars, and coverage and reimbursement strategies that disadvantage biosimilars.
Furthermore, Medicare Part D plans and commercial plans are not yet fully prepared for the new wave of biosimilars that will be covered under the pharmacy benefit. This is an area where more work needs to be done around reimbursement and coverage policy.
- Brian Lehman, MBA, MHA, RPh., Director, Medical Account Management and Strategic Alliances, Sandoz
2019 was another interesting year for the biosimilar market in Canada. Perhaps the most important event that occurred this year that affected the Canadian market was the decision by the government of the province of British Columbia (BC) to move forward with a Biosimilar Transitioning Program for all residents who are on Remicade, Enbrel, or Lantus drugs. This policy change has led to considerable debate in Canada with many detractors arguing the decision is an infringement on patient choice and the patient-physician relationship. Namely, pharmaceutical manufacturers who were financially harmed by this policy change have mounted public campaigns to discredit the policy through sponsored editorials, ads in major newspapers, and other tactics. Those tactics did not have a discernable impact on the public acceptance of the policy, though there are questions as to whether other provinces will follow BC government’s direction.
- Ned Pojskic, Leader, Pharmacy & Health Provider Relations Green Shield Canada
In many ways, there have been more negative developments, for example, the delays in potential launches due to patent settlements, the dropping of products by key players, and exorbitant and concerted price hikes that we see during exclusivity — which I discussed in an article for Biosimilar Development earlier this year: “Biologics Pricing: A Deep-Dive Into Dynamics And Behaviors Over Time.”
Another point of negativity is the ever widening of misinformation. It’s particularly troubling since, as some have said, “If you tell a lie often enough, people eventually will believe it.” We’ve seen arguments that biosimilars are not needed in any way and that they, if anything, are harmful to our healthcare system. We’ve also heard (faulty) arguments that biologics are a “natural monopoly,” that exclusivities should be further extended, and that the only way to get more innovation is by spending more money on R&D. At first, such baseless rhetoric surprised me a bit. But perhaps that’s, in fact, good. It may be just a sign of people wanting to say something disruptive; but it could also be a sign of desperation — and desperation, depending on who you ask, could be quite positive indeed.
- Edric Engert, Managing Director, Abraxeolus Consulting
In the past year, one of the key questions that arose is the viability of the biosimilars market if we continue to see reference compounds get discounted by >85 percent in certain countries (e.g., Norway). The current rebate system in the U.S. remains a big concern for biosimilars development and is something I’m watching closely.
- Francois-Xavier Frapaise, M.D., ClinExcel
In 2019, the vast array of barriers hindering biosimilars came fully into view. In my view, there are at least six hurdles to note:
- First is the cost of developing a biosimilar, which runs in the hundreds of millions of dollars. This limits the universe of companies able to develop and market biosimilars.
- Second are patent thickets consisting of dozens of, if not more, patents. The most prominent example is provided by AbbVie’s Humira, which treats immune-related diseases, and which is covered by 136 patents.
- Third is trade secrets. The process of manufacturing biologics is complex and involves path-dependent choices, which increases the hurdles posed by trade secrets that prevent biosimilars from accessing needed information.
- Fourth, there have been no FDA designations of interchangeable biosimilars, which can be automatically substituted for biologics. In the meantime, biologic manufacturers have been advocating state laws on interchangeability that impose hurdles beyond those in the brand/generic setting, such as requirements of recordkeeping, doctor notification, and even doctor approval.
- Fifth, biologic manufacturers have raised questions about biosimilars by making false and misleading representations claiming that biosimilars are “not identical,” that “patients react differently,” and that biosimilars only “work in a similar way.”
- Sixth, biologic manufacturers have used contracting practices that make it difficult for biosimilars to enter the market. Pfizer, for example, has challenged conduct by which J&J sought to protect Remicade. Pfizer targeted J&J’s exclusive contracts that excluded its biosimilar Inflectra from drug formularies. Pfizer also challenged rebates that made it harder for Inflectra to gain new patients by requiring the bundling of existing patients (not likely to switch to a biosimilar) with new patients (more likely to switch).
- Michael Carrier, Distinguished Professor, Rutgers Law School
Health plans are generally moving to parity with biosimilars. However, it’s a slow progression and they’re dragging their feet in making it official by implementing an onerous prior authorization process. That said, I think biosimilars will win here, as there are too many good efforts underway to make it so. The public (and purchasers) are fed up with the status quo. Enough is enough, and given the right information and ammunition, they will rebel. This, too, is a slower than ideal process, but it’s happening. We need to do whatever we can to keep the snail-pace momentum building.
- Lauren Vela, Senior Director, Pacific Business Group on Health
HR 4597 Acting to Cancel Copays & Ensure Substantial Savings for Biosimilars Act. https://www.congress.gov/bill/116th-congress/house-bill/4597?s=1&r=34. Accessed on November 2, 2019.
Precedent: Section 1301(a)(1) of the Consolidated Appropriations Act of 2018 mandated that, for a period of 6 months, the payment amount for certain pass-through drugs shall be the greater of: (1) ASP+6% based on current ASP data; or (2) the payment rate for the drug or biological on December 31, 2017.
HR 4455 Bolstering Innovative Options to Save Immediately on Medicines (BIOSIM) Act. https://www.congress.gov/bill/116th-congress/house-bill/4455?q=%7B%22search%22%3A%5B%22HR+4455%22%5D%7D&s=1&r=1 Accessed on November 2, 2019.
HR 3 Lower Drug Costs Now Act. https://www.congress.gov/bill/116th-congress/house-bill/3?q=%7B%22search%22%3A%5B%22HR+3%22%5D%7D&s=2&r=1 Accessed on November 2, 2019