The Biosimilar Playbook: 4 Market Realities Manufacturers Must Know

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

If you’ve read any news articles from Reuters or Bloomberg about biosimilars, you’ve likely come across Sanford Bernstein analyst, Ronny Gal. His name and market predictions are often widely cited whenever there’s news out of the biosimilar industry. I had the good fortune to meet him at the recent GPhA Biosimilars Council’s Leading on Biosimilars Conference. Throughout his expansive presentation about the biosimilar market’s progression, he homed in on four topics I think are important to reiterate.

1. Biosimilars: Not A Partisan Issue

Gal sees some movement on the commercial side of the market to control healthcare costs. We are beginning to see a rise in tailored medical policies and the exclusion of certain treatments from the formulary. But on the government side of things, progress is slower. New legislation in the U.S. often gets tied up by partisan politics and incumbent power. Indeed, we’ve already been faced with the news the FDA’s draft guidance on interchangeability likely won’t be released until 2017. As Gal said, in an election year, it’s difficult for the FDA to give the appropriate amount of attention to review and push the guidance out to the public.

Interestingly, however, the drug pricing issue and the calls for increased regulation of the drug industry are not limited to one political party. A survey conducted by the Kaiser Family Foundation revealed Democrats, Republicans, and Independents all verwhelmingly favor further drug market regulation. “Even if you asked Republicans if we should allow the federal government to negotiate with drug companies to get lower prices, there was more than 50 percent support,” Gal explained. “This is not what you expect Republicans to say, but we’ve gotten to the point where the pressure from the public is such that the politicians are steadily following.”

2. Interchangeability: Not The “Be All End All” For Uptake

While interchangeability is a central pillar to the U.S. biosimilar industry, Gal was hesitant to proclaim it a game-changer for biosimilar makers. “With all due respect, it’s not very important,” he said. “What’s driving biosimilar doctrine is economics.”

Interchangeability has been hailed as an important way to ensure the rapid uptake of biosimilars. However, while automatic substitution might seem to be the quickest, surest way to get biosimilars in patients’ hands (at least in today’s more cautious market), Gal asserted physicians still hold the power to make the switch. After reviewing data that switching patients from a biologic to a biosimilar is not problematic, a doctor will likely switch patients over.

In a retail setting, interchangeability is likely to be met with a few hang-ups. For one, the packaging of a biosimilar will be different than that of the brand, and it will boast a different name. Similarly, because of state biologic substitution policies, the physician and patient will need to be notified that the switch has been made. Between this and the differences in the packaging of the product, the patient will likely be on the phone with the doctor asking why they’ve received adalimumab-(random four letters) instead of Humira. “The pharmacist will have to talk to the physician and the patient before changing them over to the biosimilar; that communication is still going to be a central part of the switching process,” said Gal.

Leaving the decision in doctors’ hands might not be the worst thing for biosmilar uptake. In fact, throughout his presentation, Gal reiterated that, despite the need for education, the physician community is “no longer a problem.”  Doctors used to prescribe medicines regardless of cost. Now, there is growing acceptance of the idea medicine should be practiced in an economically sensitive way. For instance, Gal referenced how the Journal of the American Medical Association (JAMA) published an article discussing pricing of PCSK9 cholesterol drugs. “It’s amazing JAMA published an economic analysis amongst its traditional scientific articles,” Gal explained. “It’s clear the physician community is moving in that direction.”

3. Biosimilars Will Compete, Regardless Of Questionable Policies

If we look at the stats for biosimilar uptake in Europe, Gal says the biosimilar battle “has already been won.” For each subsequent release of a new biosimilar in Europe, uptake has accelerated. While the first biosimilar launched in the EU, epoetin, had the slowest adoption, the adoption curve for infliximab (the third biosimilar) is much steeper than both epoetin and filgrastim (the second to be released). This suggests increasing levels of comfort and willingness to adopt biosimilars. (This also bodes well for uptake of Benepali, Biogen’s etanercept biosimilar released a few months ago in the EU.)

Gal expects biosimilars of Remicade and Enbrel to garner roughly 35 percent of the EU anti-TNF market by the end of 2017. He believes this percentage will reach 55 percent by the end of 2018, and, by 2020, biosimilars will dominate the anti-TNF market. “The entire cost structure for anti-inflammatory drugs in Europe is coming down. The cost of treating a patient with an anti-TNF will likely be between $5,000 and $10,000 per patient,” Gal estimated. 

In the U.S., the looming entrance of biosimilars into the market has led many innovators to create next-generation products. But will these be big competitors for biosimilars? Gal doesn’t seem too concerned. He calls attention to Roche’s Gazyva, as well as AbbVie’s attempts to make Humira easier to inject or even needleless. Roche’s Gazyva has beaten Rituxan head-to-head and perhaps poses a threat to the uptake of rituximab biosimilars. However, Gal doesn’t expect AbbVie’s efforts with Humira will deter biosimilar use.

 “What I’m hearing from the insurers is that, given the great demand for Humira, they will prioritize the injectable biosimilars when they’re available on the market,” Gal offered.

In the end, Gal argued it will not matter how a biosimilar is named or labeled; if the biosimilar is interchangeable or not interchangeable; or what kind of switching trials a company has put its candidate through. He said, “I think a lot of these concerns are just going to be lost on the market. We’re driven by cost."

4. The Right Price Could Be Higher Than Expected

So far in the U.S., discounts have been estimated around 20 to 30 percent. However, we shouldn’t get too comfortable with these figures. Europe is in the range of 30 to 40 percent, while single award markets, such as Norway and Denmark, are boasting discounts of 60 to 80 percent. “When I talk to payers, they’re all looking for better than a 50 percent discount when there are multiple products on the market,” said Gal. “In a market with three to four competitors, I expect a 75 percent reduction versus the price of the innovator prior to the arrival of biosimilar competition.” (Obviously, this figure stunned several audience members.)