The US biosimilar market: Predictions for 2021
It has been five years since the first biosimilar launched in the United States market—marking the first steps in expanding access to innovative biologic-based treatments that help patients manage and treat difficult illnesses such as cancer, rheumatoid arthritis, and other life-altering diseases.
As we’ve seen over those five years, biosimilars are critical in continuing to provide doctors and patients choice in their care plans as well as continuing to decrease overall healthcare costs. In fact, because biosimilar adoption has accelerated in recent years, studies show that the United States is on track to reduce drug costs by $100 billion over the next five years. Research also shows that embracing biosimilars and patient choice will lead to the competition needed to further increase access to both biosimilars and biologics for 1.2 million patients.
It’s important that the biosimilar market continue to build on the success established last year in 2021. In 2020, we saw seven of the 20 biosimilars currently available in the US launch. Based on this momentum, we’re making three predictions for 2021: we will see increased competition within individual markets pay off, expansion in the biosimilar channel to include new therapeutic categories, and more regulatory support.
Increased competition & market share in the US
The United States biosimilar market experienced a significant increase in competition in 2020. When Merck launched Ontruzant last April, the trastuzumab market became the most competitive to date with five biosimilars competing against the reference product. Pegfilgrastim and Infliximab follow closely behind with four and three biosimilars respectively competing against the reference product in each market.
With more biosimilar options available, we’ve seen a significant uptick in biosimilar market share. For example, Zarxio has captured more than 50% of market share in the Filgrastim market since launching a little over five years ago. Recent projections also show that biosimilars in three key oncology therapeutic markets (i.e. bevacizumab, trastuzumab, and rituximab) are on track to shatter current market share records.
Biosimilars that recently launched within these three markets are set to reach nearly 60% of combined volume share by the end of their second year. Compared to previously launched biosimilars, these therapeutics are gaining market share at a significantly higher and faster rates. This indicates that key stakeholders – including providers and payers – are finally adopting these therapies.
We anticipate that market share rates will continue to rise through 2021 as a result of more adoption among providers and sites of care. Studies show that costs could decrease by nearly 30% if biosimilar uptake continues at the current rate. With these potential savings, providers and sites of care are beginning to recognise that savings realised through the utilisation of biosimilars can provide much-needed offsets to business expenses they are currently incurring due to COVID-19. In fact, at AmerisourceBergen, we’re seeing health system customers actively engage us about biosimilars and how to integrate these products into their formularies and care plans.
Expansion of the biosimilar market in the US & interchangeability
In March 2020, the FDA expanded the biosimilar category to include 90 additional molecules, meaning there are now more therapies that can serve as reference products for biosimilars. This is significant because it opens several therapeutic areas for biosimilar development and, ultimately, increased competition. Some of these markets have not seen many new entrants or more affordable care options introduced in some time, which could lead to a significant shake up and decreased care costs. One of these markets is the insulin market.
Up until now, the insulin market has experienced little competition and, as a result, prices have soared over the years. More than 30 million Americans have diabetes and another 88 million are at risk of developing it. Currently, more than seven million patients rely on insulin, and that number is growing each year.
At the same time, the average cost of insulin for patients per year almost doubled from $2,864 to $5,705 between 2012 and 2016. Americans pay ten times as much for insulin as Canadian patients do. One reason that insulin is so expensive in the United States is because the competition within the market has remained stagnant as the demand continues to grow. But, that will soon be changing, due to biosimilars.
As a result of the regulatory changes that occurred in March 2020, the first potential insulin biosimilar is on the horizon. Mylan and Biocon Biologics’ Semglee was the first insulin product deemed a biologic under section 351(a) per the Biologics Price Competition and Innovation Act (BPCIA) and is now under review for biosimilar designation using Lantus as its reference product. The FDA is slated to share its decision on the designation in 2021. If approved as a biosimilar, Semglee will be established as the first direct competitor of Lantus, giving providers an alternative treatment option that they can feel confident in prescribing.
This milestone is also significant because insulin is covered under the Part D pharmacy benefit, and now, insulin biosimilars will be, too. This is the first market where a biosimilar product could be dispensed in the retail pharmacy setting, since the other biosimilars currently on the US market are covered via Part B.
There is also current legislation in Congress (HR 8190) that aims to open the door to interchangeability within the biosimilar market – specifically starting with insulin products. If passed, HR 8190 would allow insulin biosimilar products to receive automatic interchangeability upon FDA approval. This means that pharmacists could potentially allow insulin-dependent patients to make the switch between reference products and biosimilars at the pharmacy counter. It will be the first time pharmacists can help patients access a more cost-effective biosimilar since the launch of the category five years ago. Pharmacists have more insight into a patient’s insurance coverage than most providers, so this change could create a lot of value for patients throughout the country.
We didn’t anticipate seeing interchangeability for biosimilars until 2023, when several biosimilars referencing Humira are slated to come market. Seeing the first interchangeable insulin biosimilar could eventually lead to more conversations around evolving the process for applying for interchangeability for large molecule biosimilars. This could be an important turning point for manufacturers, such as Boehringer Ingelheim and Pfizer, that are awaiting review of submitted applications for interchangeability designation for their approved biosimilars.
Introduction of Policies Encouraging Reimbursement
In addition to creating a pathway to interchangeability, legislators are beginning to review bills related to reimbursement and cost-sharing that could ultimately encourage provider choice. These bills – which include the Prescription Drug Pricing Reduction Act (PDPRA), HR 6179 and S 3466 – could be the key to finally giving providers what they should have as medical professionals: the freedom to do what’s best for their patients, including prescribing biosimilars when appropriate.
The PDPRA is slated for Senate review in 2021; it is aimed at lowering the cost of drugs for patients and contains several provisions that would impact biosimilars. For example, it contains a provision that would temporarily increase the reimbursement for biosimilars from 6% of the reference product’s average sales price (ASP) to 8% of the reference product’s ASP. This increase in reimbursement would incentivise the use of biosimilars in the provider setting and help establish a more level playing field from a reimbursement perspective.
Like the PDPRA, the HR 6179 bill, known as the “Increasing Access to Biosimilars Act of 2020", would also incentivise the prescribing of biosimilars. If passed in 2021, this bill would require the Centers for Medicare & Medicaid Services (CMS) to implement a shared savings model that would give providers a percentage of any savings incurred. This would encourage more providers to consider prescribing lower cost biosimilars to reduce healthcare spending for a defined patient population.
Finally, the S 3466 bill could save seniors up to $3.3 billion in out-of-pocket costs on specialty therapeutics over the next ten years. If passed, the bill would waive all out-of-pocket expenses for a biosimilar for beneficiaries of Medicare Part B programs. We’re excited to see legislatures moving forward with policies that allow biosimilars to fulfil their potential of lowering healthcare costs and reducing out-of-pocket expenses for patients.
We saw great success for the biosimilar category in 2020. It’s hard to believe that a little over a year ago we were still having a conversation about whether or not we should throw in the towel on biosimilars, but we are confident we will continue to see momentum around encouraging biosimilar choice as more stakeholders continue to keep their fingers on the pulse of increasing pipeline growth, competition, and market share as well as see key policies over the finish line.
About the author
Sean McGowan is responsible for leading strategy and business development initiatives for the Biosimilar product category at AmeriSourceBergen. He joined the company in 2017 and has over a decade of experience in the healthcare industry, including the pharmaceutical, specialty pharmaceutical and patient services areas of focus.