From The Editor | July 24, 2018

The Search For Biosimilar Value: The Devil Is In The Details

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By Anna Rose Welch, Editor, Biosimilar Development
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A few months ago, I was introduced to Erin Federman, the head of biologics, Europe, for Mylan, and the chair of Medicines for Europe Biosimilar Medicines Group Market Access Committee. We originally connected back in April to discuss the then-upcoming Biosimilar Medicines Group conference in London. (It took all of ten minutes for me to identify Federman as a kindred spirit, given her similar background in English literature and her passion for supporting biosimilars.)

A few weeks ago, I reconnected with Federman — now a member of the Biosimilar Development editorial board — to discuss her biggest takeaways from the biosimilar conference.   As I highlighted in a previous article, the European biosimilar landscape is slowly turning its attention away from market access to sustainability. And Federman was quick to acknowledge that sustainability was one of a central topic of discussion. Rather than asking questions about whether biosimilars will gain traction, she said the conversation is shifting to questions like, “How do we proactively trigger the process we need to see without being aggressive, defensive, or causing challenges in the system?”

When we think about sustainability, we likely imagine a market into which companies can easily enter and compete, garnering a sufficient return on investment to continue developing the products. In keeping with this definition, conversations about biosimilars have centered on two topics — what a biosimilar is and how it’s going to be priced. According to Federman, this can be dangerous for the overall sustainability of the market.

“If you make everything price-driven, it’s not sustainable,” she said. “It becomes a quick win for a company via a discount and then a tactical play to the market. If you ask me what I’m spending a lot of time thinking about, it’s what I can do with my partners in communications and policy market access at Mylan and my colleagues in Medicines for Europe to promote the message that savings are good, but you don’t need to get it all within the first year.”

This raises even larger questions about biosimilar value — and how exactly a healthcare system can answer an increasingly loud core question, “What’s in it for me?” In many situations, value is associated with the price tag, and, specifically, the savings associated with a certain product. Indeed, a large part of a biosimilar’s value may be its ability to reduce overall healthcare costs and free up resources for newer, innovative treatments and healthcare practices. But there are still questions of how biosimilar value can be presented to stakeholders. In some cases, it can feel as though there is a missing part in the equation.

When I asked Federman if there were any health systems that had found the solution to that missing piece, she noted there will not be just one answer because of the differences in cultures and systems throughout the EU. But to her, Norway and its cultural, social, and financial system has been well-suited for biosimilars.

For one, the country has a particularly pragmatic government. There’s also more transparency on the distribution of funds and savings. This is important because some countries are unable to see how the cost benefits are carried through the system. Physicians may be aware that biosimilars can save the system money, but these savings are not making it back to the hospital or practice level.

“If you have clarity in the financial flow, this can contribute to the sense that everyone is benefiting,” Federman clarified. “It’s not just good for a single patient on an individual level, but it also means more patients get the drug and everyone buys into this. In Norway, there’s a sense of altruism; the country’s citizens are willing to do not only what’s best for them but what’s best for the system in the long-run.”

However, it’s important to note that Norway has largely been a testing ground for the wide-scale adoption of biosimilars. This led to heavy up-front discounts as a way to drive fast uptake and generate real-world data. While the uptake of the Norwegian system is admirable, the heavy discounting – if replicated across Europe – would present tremendous challenges for the short- and long-term competitive landscape and sustainability of biosimilars.

“We want other countries to look at Norway and see that the adoption of biosimilars can be easily absorbed into the healthcare system,” Federman clarified. “However, discounting across Europe needs to be done in a more gradual and responsible fashion to ensure we can continue delivering these medicines.”

The situation in Norway is only one example where the system seamlessly promotes the use of biosimilars. Across the EU, we’re also seeing misalignment between the government’s goals for sustainability and how biosimilars are reimbursed. And it’s examples like these that emphasize the importance of the famous multi-stakeholder approach in which all stakeholders in a system are consulted and come to a consensus about the values of using biosimilars.

For instance, France is determined to drive up its use of biosimilars to 80 percent. This is great news, given the slow adoption of biosimilars in the past. But the government’s ambitions for biosimilars are not quite matched with the physician-driven prescribing system. While the government’s encouragement can be considered, say, the carrot, or the promise of greater value by choosing biosimilars, there isn’t a stick, or counterbalance, in place to encourage that choice. (For example, in Norway, the choice to continue using the reference product still exists, but there will be a cost-differential to pay if it’s selected.) 

Similarly, there’s some chatter about the work being done in Spain to encourage competition between the innovator and the biosimilar product to lower overall costs. When a biosimilar enters the retail market at a lower price than the biologic, policy requires the innovator to drop its prices to that of the biosimilar (or at least close to the biosimilar’s price). This is certainly a win for the healthcare system that suddenly encounters savings from the reference product. But for biosimilar makers, this lowers the incentive to enter the market.

“These efforts are all well-meaning,” said Federman. “There’s growing awareness and understanding of these products and the value they can provide. There are big ideas of how to approach them, but the devil is in the details.”

When I asked her whether there was more that needed to be communicated — or discussed in a different way — she argued the solution isn’t always going to be more communication; some of it will be a matter of time. What often seems doable in theoretical discussions often reveals its faults when finally implemented. Federman likened some of the misalignment we’re currently seeing in practice to the analogy of putting on an emergency air mask. Every airline has a method of communicating how to put on air masks in the case of emergency, but there is nothing at stake for a passenger when they’re observing (or reading through) the airline’s safety presentation. Indeed, footage from a recent in-air incident revealed that 90 percent of those on the plane still put their masks on incorrectly.

In the same vein, “A lot of the biosimilar industry’s work thus far has been preparation, but there hasn’t yet been that pressure and sense of urgency to focus on it,” Federman described. “We’ve been dripping products slowly into the market. But with the launches of Herceptin and Humira biosimilars in the upcoming months, these products are becoming so big that the airline mask is right in our face, and we have a reason to pay close attention. We’re fast reaching a tipping point where we move from the largely theoretical to the practical — and it’s time for healthcare systems to take action.”

Stay tuned for another article featuring Federman’s thoughts on how the biosimilar conversation has evolved over time and what efforts are needed now from the industry.