Getting the Lay of the Land After a Banner Year for Biosimilars

Fran Gregory, PharmD, MBA. Vice President of Emerging Therapies at Cardinal Health.

More than eight years after the first biosimilar was approved for use in the United States, the market is experiencing a historic breakthrough. Last year, nine biosimilars for Humira (adalimumab) made their highly anticipated debut in the United States. A tenth, Simlandi from Alvotech and Teva Pharmaceutical Industries Ltd., was approved in February 2024.

Currently, there are 49 biosimilars that are approved by the FDA, with 39 having launched commercially. Ten of these have interchangeability designations. This is just the beginning of a seismic shift in the healthcare ecosystem. There are more than 100 biosimilars in development across 22 molecules¹ that not only target conditions currently addressed by biosimilars, such as cancer, diabetes, and immune disorders, but also branch into therapies related to bone health and growth hormones.

In ophthalmology, a therapeutic area in which there are already two interchangeable biosimilar drugs available, there are currently 10 biosimilars that are in clinical trials or pending FDA approval. Biosimilars for Eylea, a therapy used to treat retinal diseases, are expected to launch this year into a sizeable market estimated at $7.79 billion. Overall, we anticipate that biosimilars will continue to be developed for the highest spend biologics, which, in turn, should lower overall costs to the healthcare system and improve patient access.

When we look at the impact biosimilars are having on healthcare, it’s clear that savings are being realized and the landscape is rapidly changing; however, many questions remain unanswered. For example, how will the launch of more biosimilars impact patient choice? What’s being done to eliminate regulatory red tape and barriers to access for many of these medications? How much money could biosimilars save the US healthcare system as a whole?

Here is a look at where we currently stand in the world of biosimilars.

The bottom line is the bottom line

While medical innovation is the key to more effective treatments and improved outcomes, it is also the biggest driver of cost increases in healthcare, and nowhere is that more evident than in the use of biologic medications. Nearly half of US drug spending is on biologics, which accounts for less than 5% of patient prescriptions.² This means that the per-patient cost of biologics is exponentially higher than that of simple molecule drugs and that cost is growing rapidly.

Adalimumab (Humira), the most popular biologic and the best-selling drug in history, has raked in nearly a quarter of a trillion dollars³ since it launched 20 years ago despite the fact that it, and drugs like it, are prescribed to a surprisingly small number of patients in the United States.

According to the FDA, only about 2%¹ of Americans use biologics, yet they constitute 46%3 of all drug expenditures. They are so costly, that by 2027, biologics are expected to overtake total sales of traditional small molecule drugs by a staggering $120 billion.⁴

The purpose and appeal of biosimilars is to help mitigate these soaring costs by introducing more competition among manufacturers and increasing choice among patients. In that regard, biosimilars are already having an outsized impact.

Since 2015, biosimilars have saved the US healthcare system $13 billion,⁵ and one study estimates that between 2021-2025, savings are expected to top $38 billion on the low end with high-end savings being around $124 billion.⁶ One may ask, what will it take to get to the high end of this amazing opportunity for the health care system?

Finding a foothold

The US healthcare industry is complex and standing between manufacturers of biosimilars and the patients they hope to treat there are many challenges to navigate. Adoption of biosimilars is the primary barrier. Even if a drug gets through the regulatory process and makes it to market, there are questions of whether it will be covered by insurance, whether it will be added to a national preferred formulary and whether prescribers will have the willingness to prescribe it.

What influences a provider’s decision? In a survey, nearly 9 out of 10⁷ providers said price discounts are key in shifting to biosimilars, and more than 60%⁸ said they would only feel comfortable prescribing biosimilars if the drug has an interchangeability designation, specifically among the alternatives to Humira. When a biosimilar has an interchangeability designation, it may be used instead of the biologic reference product by a pharmacist without a new prescription, like the current process for switching a brand-name drug to a generic drug.

With asking sales prices dropping about 40%⁹ in the first three years after launch, most biosimilars are meeting the requirement for lower costs, but it’s interchangeability that may prove to be the toughest hurdle for manufacturers to overcome.

Reducing red tape

As mentioned earlier, of the 49 biosimilars on the US market, only 10 have been granted an interchangeability designation, meaning pharmacists can decide on their own to switch a prescription from a biologic medication to a biosimilar. Pharmacists already have that authority with many generic drugs, but when it comes to biosimilars, those substitutions are not allowed unless the drug has been given a special interchangeability designation from the FDA.

This barrier does not exist in the European market, in which we have seen much faster rates of adoption for biosimilars. Critics call the need for an interchangeability designation redundant and expensive, and during a recent FDA webinar,¹⁰ representatives from the United Kingdom and the World Health Organization officially deemed such testing largely unnecessary.

The interchangeability designation was put in place as part of the FDA 351(k) biosimilar approval pathway. An interchangeability designation is a regulatory designation, not a clinical differentiator. All biosimilars must prove that they are highly similar to the reference product with no clinically meaningful differences in order to achieve FDA biosimilar status.

The interchangeability designation has been deemed an unnecessary extra step by many. In fact, there are several pieces of proposed legislation that have circulated in the United States that would aim to remove interchangeability language from the biosimilar approval pathway, making all biosimilars equal.

The concerns with interchangeability are valid. Biosimilar manufacturers must go through additional switching studies to achieve the designation. This is a significant extra cost in development, and most likely will be passed on in the price of the drug at launch. In addition, the United States is the only country with such a designation. All other countries accept that a biosimilar is highly similar to the reference product and, therefore, considered substitutable for the reference product. No extra studies, time or money needed.

Very few biosimilars have an interchangeability designation and many manufacturers find that it isn’t a necessary part of their strategy. Still, the willingness of physicians to prescribe biosimilars may depend on whether a biosimilar has an interchangeability designation. For example, in our Cardinal Health 2023 Biosimilars Report, more than half of surveyed ophthalmologists said they would only feel comfortable prescribing a biosimilar if it had an interchangeability designation.

In summary, many believe that the interchangeability designation is an unnecessary extra cost that may delay the value and cost savings that biosimilars promise. The impact of removing the interchangeability designation could be immediate and profound, especially when you consider a single dose of Humira costs nearly $7,000 in the United States, whereas biosimilar counterpart Yusimry debuted in 2023 at just $995 per dose, a savings of 85%.

A look ahead

Even though biosimilars have been around for nearly a decade, we are just now beginning to see the scope of this seismic shift in medicine. This is an amazing opportunity for the US healthcare system, and I am excited to see the effect that will be had on patients.

As with any such transition, there are challenges and obstacles, but it’s clear that we have taken meaningful steps with biosimilars to make medications more accessible, prices more affordable, and the market more competitive.

For more insights into the biosimilars landscape that was in 2023 and what to expect for the rest of 2024, download the Cardinal Health 2024 Biosimilars Report: insights on a pivotal year of evolution and expansion.

About the Author

Fran Gregory, PharmD, MBA, vice president of Emerging Therapies at Cardinal Health.

References

1. https://www.fda.gov/news-events/press-announcements/remarks-fda-commissioner-scott-gottlieb-md-prepared-delivery-brookings-institution-release-fdas
2. https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/biosimilars-in-the-united-states-2023-2027
3. bioprocessintl.com/bioprocess-insider/global-markets/the-final-hurrah-humira-sales-hits-21-2-bn-in-2022/%23:~:text=To%2520date,%2520Humira%2520has%2520pulled,it%2520the%2520bestselling%2520drug%2520ever
4. https://www.pharmaceutical-technology.com/comment/biologic-sales-small-molecule-sales/?cf-view
5. https://newsroom.cardinalhealth.com/2023-03-03-The-changing-biosimilars-landscape
6. https://www.ajmc.com/view/projected-us-savings-from-biosimilars-2021-2025
7. chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.cardinalhealth.com/content/dam/corp/web/documents/Report/cardinal-health-2022-biosimilars-report.pdf
8. https://www.centerforbiosimilars.com/view/report-over-60-of-providers-plan-to-only-prescribe-interchangeable-adalimumab-biosimilars
9. https://www.ajmc.com/view/price-discounts-have-driven-higher-biosimilar-usage-especially-in-oncology
10. https://www.centerforbiosimilars.com/view/part-3-biorationality-fda-webinar-on-biosimilars-efficacy-testing-marks-major-step-forward