Biosimilars in the US

Inside Edge Consulting, Princeton

February 11, 2015

A few weeks ago, the first recommendation for approval of a biosimilar occurred in the US for Novartis’ version of Amgen Neupogen. A range of stakeholders, including pharmaceutical manufacturers, healthcare providers, managed care, and patients, have been waiting for many years to see how the FDA would react to and handle biosimilars. The time has finally come.

In Europe, biosimilars have recently been approved and the market is just beginning to see how things will shake out. In the US, we will soon learn what the impact will be on all stakeholders, and the picture may well be mixed.

For pharmaceutical manufacturers, as many of the blockbuster drugs are now generic, biologics provide a lucrative revenue stream. As more targeted agents hit the market, providing “personalized medicine”, they come with a high price tag. If these agents are subject to competition from biosimilars their profitability could decline, which may, perhaps, even damper investment in the research dedicated to these agents.

Healthcare providers have to decide whether biosimilars are really comparable to the target agent and if they are effective enough for patient treatment. As always, providers have to weigh the benefits and drawbacks of various treatment options for patients, while keeping the cost of access in mind, which can sometimes be patients’ primary concern. The availability of more options may be perceived as an advantage, but it is too soon to speculate on the uptake for biosimilars.

Patients want access to the best treatments for themselves and their loved ones, but patients are also quite price sensitive. As more biologic agents come to the market, they are faced with deciding whether the treatment for their disease is really worth the cost. This is particularly challenging for the Medicare population, who may already face financial challenges. Patients will also have to decide whether biosimilars are sufficiently analogous to the target drug to be a valid treatment option; as a comparison, we know some patients prefer to stay on a branded agent when a generic is available because they believe the branded agent is better.

Managed care will have to decide how to cover these agents and at what tier. This is another factor to consider at their P&T meetings, another potential management step for getting patients to the appropriate treatments. This could impact the contracting for all products in a category with a biosimilar entrant, since these new drugs will be much cheaper than the existing agents.

This is a complex area, but hopefully the FDA will shortly allow us to see what will happen in the US. For now, we will wait for the possible approval and launch of our very first US biosimilar.

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