From The Editor | August 11, 2016

How To Succeed At Biosimilar Commercialization

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By Anna Rose Welch, Editorial & Community Director, Advancing RNA

biosimilar industry

Steve Miller, CMO of Express Scripts, began his presentation at the World Biosimilar Congress USA with a joke. He shared a slide featuring side-by-side photos. One was of Sarah Palin. The other was of Tina Fey playing Sarah Palin on Saturday Night Live. Above these pictures was one word: Biosimilars. (If you’re ever looking for a biosimilar joke for a cocktail party, or simply a way to describe the concept of biosimilars, this is a good method.) Obviously, a majority of the conference delegates representing biologics/biosimilar manufacturers were familiar with the concept of biosimilars. As Miller pointed out, many of these companies have had experiences with biosimilars for years in Europe. These players are more informed on the health-related and economic performance of biosimilars than are patients and physicians in the U.S., pharmacy benefit managers (PBMs) like Express Scripts, and even Miller himself.

However, this isn’t to say Express Scripts hasn’t had biosimilars on its radar for years. In 2007, the company established a model to determine the financial impact of four biosimilars on the U.S. market. Miller was invited to Capitol Hill to present this model to Speaker of the House, Nancy Pelosi, then-Senator Hillary Clinton, as well as the Bush and Obama White Houses (all on separate occasions). “We thought we were going to roll through the House and the Senate and have biosimilar policy passed very quickly,” Miller admitted. “But this was a battle which ended up taking several years to resolve.”

Today, biosimilars are a hot topic for payers and PBMs. Just last week, CVS announced it would be showing preference to the biosimilar Zarxio and Basaglar (a follow-on biologic insulin approved via the 505(b) 2 pathway) beginning in 2017. Express Scripts also mentioned it will revisit its basal insulin treatments as new products (e.g., Basaglar) are launched in the year ahead.

“Biosimilars are crucial to the healthcare system if we are going to continue to have a system like we do today,” Miller explained. “These treatments provide payers with the headroom to cover other high-priority treatments with larger price tags, such as hepatitis C treatments.” But biosimilar makers have a lot of work to do to ensure their product contributes to a sustainable market. The reality for biosimilar companies is there are originators working to sow doubt about the efficacy and safety of biosimilars. In addition, there have been decisions — and ones that are still being made — in terms of naming and labeling that could also imply large differences between the biosimilar and reference product. As such, Miller emphasizes several key points for biosimilar makers to keep in mind as they work to establish their commercialization strategy prior to, and when, approaching payers.

How To Discount: Don’t Look At Norway

A key theme at the World Biosimilar Congress USA was the declining costs of biologics manufacturing. Miller referred to an analysis by Sanford Bernstein’s Senior Analyst, Ronny Gal, which revealed average manufacturing costs of biologics have decreased substantially. “I understand you’re going to have costs that are not included in manufacturing costs,” Miller acknowledged. “But the reality is you all have become phenomenally efficient at making these products.” As the cost of producing products goes down, there is more “wiggle room” for companies to determine where they wish to direct financial resources when bringing biologics (or biosimilars) to the market.

It would be impossible to mention biosimilar discounts without referring to Scandinavian countries. I recently published an article on the Norwegian biosimilar switching strategy, which led to drastic biosimilar price cuts. Ever since Orion’s 69 percent discount for infliximab and Sandoz’s 83 percent discount for human growth hormone, questions have arisen about the extent at which biosimilars will and can be discounted. While these drastic efforts led to impressive levels of competition and biosimilar uptake in the country, Miller expressed doubts that steep discounts are the way to go for the U.S. “We need a sustainable marketplace,” Miller explained. “If we beat this marketplace to the bottom, the first company will learn their lesson, the second company will learn their lesson, and there will not be a third company.”

As such, the commercialization strategy becomes important for biosimilar makers, and especially for payers. If payers aren’t able to help biosimilar companies succeed in the market, there will not be any players investing in the market.

What Do Payers Need From Biosimilar Makers?

The first step to striking up a strong partnership with a payer is to present them with the appropriate data. This data will be different from that which a company submits to the FDA. While the FDA is concerned with the analytics and clinical data demonstrating the molecule’s biosimilarity and safety, payers are not equipped to approach these molecules as FDA scientists. This is why Miller emphasized presenting strong pharmacoeconomic analysis. This data will be most valuable if your candidate is not pitted against a placebo. “We are looking for pharmacoeconomic data based on the current drugs we are using in the marketplace,” Miller explained. “We need you to present the economic argument of why we should prefer your product over the brand.”

Presenting this data will give the payer insights into a company’s experience with the biosimilar in other markets, as well as how the company envisions its U.S. experience. Preferably, the data a company submits will share its experiences with the biosimilar in Western countries, such as Australia, Japan, and all of Europe. It’s important, however, that these experiences are from countries with advanced healthcare systems.

“The payer community is not going to accept data from healthcare systems that are not as advanced,” Miller clarified. When questioned about how a payer might approach data from an emerging market such as Brazil, Miller encouraged companies to submit data from anywhere, but there are some factors the payer will put more stock into than others. For instance, the publication of your data in a well-reputed journal can also demonstrate its quality.

Putting forth your best data is growing infinitely more important, as payers have become more involved in the review process. Traditionally, Express Scripts’ pharmacy and therapeutics (P&T) committee, which decides which drugs appear on the formulary, would remain anonymous. Now, however, certain payers sign non-disclosure agreements and sit in the room when data is being presented to the community. “If we start lowering our data standards, that will be a problem for all parties involved,” Miller said. 

Successful Commercialization Involves Knowing Your Patients

Beyond having strong data, there are a number of nonclinical aspects a company needs to consider as it approaches a payer. Biosimilar makers should have a strategy for supporting its product in the market. “You should not expect that, if you drop your product on our doorstep, we are going to make an immediate formulary change,” Miller said. It’s ultimately going to come down to how a company is working with physician and patient groups to garner their support for the biosimilar. The company and the payer will need to work together to construct the plan and to establish value-added services that will incentivize patients to use the product. Right now, patients face claims from originators that biosimilars are not as good as the brand-name product.

This fear-mongering calls on biosimilar companies to work even harder at educating patient populations. For instance, if a company is bringing out a biosimilar for rheumatoid arthritis, a payer will want to know what the company is doing with the patient and physician community to educate them. “This outreach can be as simple as having someone speak at university grand rounds,” Miller offered. (Grand Rounds are a university lecture series focused on new clinical challenges and modern therapeutics.) “As hard as you and I are going to be working to make biosimilar uptake a positive experience, there are already originators educating patients about the quality of their biologic.”

The road to commercialization will be biosimilar makers’ greatest challenge. In addition to ensuring companies have the best possible data and incentive plans for patient and doctor communities, recovering the cost of development will be a prime focus in the payer relationships. The big question in the U.S. today, Miller posed, is, “How are you going to work with payers to come up with unique programs so both payers and patients say ‘This is a good choice. I have had great assistance with this product, it’s usable, and it’s working.’”