Momentum is building for biosimialrs but robust coverage for lower-cost agents, including biosimilars, is needed.

Six years after the first biosimilar was approved by the FDA, the U.S. is on the verge of finally realizing the broad benefits these products can bring to patients across a range of therapeutic areas.

2021 has been particularly strong for the growth of biosimilars in oncology, led by biosimilars referencing major therapeutic oncology products Avastin, Herceptin, and Rituxan. With added government support through bills such as the Advancing Education on Biosimilars Act of 2021, and new proposed legislation including the HHS response letter to the July 9th Executive Orders, biosimilars remain a primary focus from a policy perspective.

In addition to new policies, the U.S. saw the approval of the first biosimilar with a predominantly retail focus that will be reimbursed under a patient’s pharmacy benefit — a biosimilar that also happens to be the first interchangeable biosimilar – as well as the first FDA-approved biosimilar in diabetes care for insulin.

Despite a slow start, the U.S. has approved more than double the number of biosimilars than the UK did in its first six years, bolstered by the need for more competitive pricing to combat rising healthcare costs. Now, with more than 100 biosimilars currently in development across 22 molecules, here’s what managed care executives need to know about what’s next for the biosimilars market.

Where are we now?

Before focusing on where we are going, it’s important to understand where we are currently within the biosimilar landscape, and how it fits into the larger picture.

Currently, there are 31 FDA-approved biosimilars with 20 launched in the United States representing 7 unique molecules. Of the biosimilars that have launched in the U.S., 17 have oncology indications, which also happens to be where biosimilars have the highest rate of adoption. Beyond the number of biosimilars available to oncologists, the uptake of these biosimilars among oncologists can be attributed to several unique factors including greater provider acceptance, prevalence of “new start” patients compared to other therapeutic areas like rheumatology, drivers like value-based care models such as the Oncology Care Model (OCM) which focuses on the dual responsibility of maximizing patient outcomes for the lowest cost, and an overall increase in favorable coverage policies from payers to encourage biosimilar utilization first in their medical policies

From a cost perspective, for five out of eight molecules with biosimilar competition, net costs have gone down since the first biosimilar launch. In 2020 alone biosimilars saved $7.9 billion, more than tripling the $2.5 billion saved in 2019).

However, even with the growing success of biosimilars in oncology, the success of biosimilars as a whole has varied greatly based on several market dynamics including therapeutic area, site of care, treatment type, institution type and product payment type (e.g., buy-and-bill vs retail). Additionally, all currently launched biosimilars primarily fall under a patient’s medical benefit, leaving the prescribing physician as one of the primary decision-makers, along with a patient’s insurer, of whether to switch patients from a reference product to a biosimilar.

What to expect?

Despite the many changes in the past year to the biosimilars market, the next 24 months should prove to be even more exciting and disruptive.

Launch of interchangeable biosimilars

The decision to prescribe a patient a biosimilar or an originator biologic has largely been the decision of the prescribing physician up until this point. However, this year, with the FDA’s approval of the two biosimilars with an interchangeable designation, pharmacists will now be allowed to automatically substitute a patientfrom an originator product to the interchangeable biosimilar product without prior HCP approval, per state substitution laws. In addition to Viatris’ long-acting interchangeable insulin glargine, insulin glargine-yfgn, Boehringer Ingelheim’s adalimumab biosimilar, Cyltezo, became the first adalimumab candidate to achieve interchangeability and is scheduled to launch in July 2023. We also expect another interchangeable biosimilar from Viatris referencing the short-acting insulin aspart in the next several months. Soon, retail pharmacists will be positioned to drive decisions on which products a patient ultimately receives, particularly for patients exposed to the list price of many biologic treatments.

Launch of new therapeutic areas

While the current biosimilar landscape is filled with oncology therapies, there are very few “new” oncology biosimilars in the near-term pipeline. Instead, the next wave of biosimilars that are expected to launch are in the fields of endocrinology (both short-acting and long-acting insulin), ophthalmology (including Byooviz which is expected to launch in June 2022 and references Lucentis) and immunology ( including six Humira biosimilars that already have FDA approval, but which won’t launch until 2023 due to patent settlements).

The challenge of these new therapeutic areas is understanding and uncovering the differences and unique nuances in each that will impact the speed of adoption/utilization. If there’s one thing we’ve learned over these last six years it is that biosimilars cannot be generalized and that every therapeutic area will be different. There will always be additional needs for education on biosimilars, but understanding the level of comfort providers and patients will have about biosimilars and interchangeable biosimilars will require targeted engagement with physicians and patients, and support from KOLs willing to share their experience with their peers.

A first for pharmacy benefits managers

For the last six years, all launched biosimilars in the US have been predominantly provider-administered products billed under a patient’s medical benefit. Pharmacy benefit managers (PBMs), which originated more than two decades ago, were created to help health care plans secure lower costs for prescription drugs primarily under a patient’s pharmacy benefit, often through manufacturer rebate agreements. For the first time as PBMs work to ensure lower-cost treatment options are prioritized from manufacturers, they will need to navigate how these lower-cost biosimilar products (which often cannot support the same level of discounts/rebates that branded biologics can) fit into the landscape. This dynamic is still being worked out in the medical benefit field, and while there are some useful learning such as biosimilar reimbursement incentives (e.g., ASP + 6% of the reference biologic), growing parity coverage in benefit designs, and increased provider education, there is not yet a playbook of best practices to duplicate. Insulin biosimilars will essentially serve as America’s first “use case” for biosimilars in the Part D space and will provide us all with a great learning opportunity as we prepare for the launch of additional part D biosimilars, such as adalimumab.

What hurdles do we still need to overcome?

With the expected windfall of biosimilars on the market, it’s vital to understand the work that still needs to be done to ensure biosimilars and interchangeable products are being used how they were intended: to create competitive pricing in the marketplace and increase patient access to high-quality treatment options.

Clinical Confidence

Education has been proven to be a key factor in overcoming biosimilar hesitancy among prescribers. According to extensive research, the first biosimilar for infliximab launched in Europe with little uptake from prescribers in the first year, but as the familiarity with the product grew from other physicians using the drug (i.e. clinical confidence) as well as education programs, the comfort level of physicians grew by 31% in 2 years. Clinicians in more fields must have this same level of confidence to promote the success of biosimilars.

Behavioral Economics

Often, education alone may not be enough to overcome low prescriber uptake. Researchers have found that prescribers can make decisions based on cognitive biases which can lead to slow adoption of newer products. For biosimilars, this is most prevalent in the behavioral economic theory of “default”, where a prescriber will continue to prescribe the originator biologic even with a less expensive biosimilar on the market – something that value-based care models may be able to address. Additionally, similar to how patients may suffer from the nocebo effect, research from Cardinal Health shows that prescribers often struggle with “outcome bias” for biosimilars where they worry that because the name implies that these drugs are “similar” to the reference products but not the same, the outcome may be different.

Unified support from payers and benefits managers

Another hurdle to overcome is how soon payers and benefits managers (both pharmacy and medical) will act on biosimilars coming to market. Within the U.S. healthcare system, PBMs and payers may hold the keys to substantiating the value of biosimilars in the country by deciding to include them on their formularies and reimbursing them at a rate that is competitive with the originator products. Research shows that payers often adopt a “wait and see” approach, similar to clinical confidence with prescribers, which could further delay the adoption of biosimilar products. Without robust coverage for lower-cost agents, including biosimilars, it may be challenging to operationalize interchangeability and lessen many of the benefits these treatment options can offer to patients. Payers and PBMs can serve as tremendous catalysts for biosimilar adoption, bringing much-needed competition to the biologics market similar to the role they have played in the evolution of the generics market.

Policy updates from the state/national level

While 2021 has been particularly exciting for policy updates from a national level, there is still a long way to go, specifically in terms of biosimilar education, substitution, and costs. At a state level, as interchangeable biosimilars roll out, there may be changes with state policies that can create confusion among stakeholders (current state policies can be found here). All policy changes, both positive and negative, will need to be communicated effectively to avoid stakeholders losing confidence in the products and the process.

Overall, the future of America’s healthcare system will need to include biosimilars in order to build a healthy, competitive market and ensure patients can afford and access critical treatments. However, the successful uptake of biosimilars will largely be based on how well we adapt and handle the hurdles in front of us.

Jeff Baldetti is director of biosimilars at Cardinal Health.