There has been a lot of talk recently about the biosimilars marketplace and what role biosimilars play in reducing health care costs. We’re here to set the record straight about how these medicines are reshaping America’s health care landscape and improving patient and provider choice.
A biosimilar is a biologic medicine that is highly similar to and has no clinically meaningful differences in safety, purity and potency from an existing biologic medicine (known as a reference product) that is already licensed by the U.S. Food and Drug Administration (FDA).
Here are three things to know about the biosimilar marketplace:
1) Biosimilar Growth and Competition
The U.S. biologics and biosimilars market is evolving rapidly, and the benefits for patient access and controlling health care costs will only continue to grow over time as more biosimilar medicines are introduced. As of September 2022, the FDA has approved 39 biosimilars — including three interchangeable biosimilars. Of those, 22 are already on the market in the United States, competing against nine brand biologics, with at least seven more biosimilar products scheduled to launch in 2023. To date, biosimilar competition is estimated to have produced $21 billion in overall savings in the U.S. over the past six years alone. Looking forward, the FDA reported as of June 2022, there were 100 biosimilars in development for which sponsors are paying Biosimilar User Fee Act (BsUFA) fees and benefiting from BsUFA-supported meetings with FDA, offering tremendous potential for biosimilars to continue to drive competition and savings in the years ahead.
Since biosimilars were first introduced, the U.S. market has significantly evolved. In fact, the United States has approved more biosimilar products than the European Union had in a comparable period of time after establishment of a regulatory pathway. This is largely due to the regulatory predictability and efficiencies that have been provided by the FDA’s successful implementation of the abbreviated approval pathway for biosimilars and the resources provided through BsUFA. The latest iteration of BsUFA, BsUFA III, which was signed into law on September 30, 2022, will further strengthen regulatory review of biosimilars and advance development of interchangeable biosimilar products.
2) Biosimilars Yield Savings in Medicare Part B
Several recent analyses have looked at how increasing use of biosimilars has yielded significant savings in the Medicare Part B program and demonstrate why we need to encourage, not disrupt, this progress.
According to a recent Xcenda report, the average sales price — generally the basis for Part B medicine reimbursement — for many reference products and biosimilars has decreased more than 45% since biosimilar competitor products have launched. As Xcenda explains, “while many business factors contribute to lowering drug prices, competitors flowing into the market undoubtedly play a key role.”
Additionally, an analysis conducted by Moran Company indicated that biosimilars have also helped decrease costs for the Part B program. On average, payment amounts for the top 50 Part B medicines decreased by 1.7% from the first quarter of 2022 to the second. Moran found that the Part B products with the biggest decreases were biosimilars or biologics with biosimilar competition.
As a result of increasing market competition, according to an IQVIA report, physician-administered biosimilars are anticipated to reduce medicine costs more than $100 billion in total between 2020 and 2024, with much of this savings benefiting the Part B program.
3) The Inflation Reduction Act Disincentives the Development of Biosimilars
Considering the amount of data and evidence available on how biosimilars are increasingly driving competition and bringing costs down, it is alarming that the recently passed Inflation Reduction Act included policies that discourage investment in the development of biosimilars. Specifically, the law allows the government to impose a set price on a reference biologic before biosimilars may have time to come to market, providing that a biologic may be selected for price setting eleven years after approval and subject to price setting at year 13. Of course, under the Biological Price Competition and Innovation Act (BPCIA), a biosimilar cannot even be approved under 12 years after the first licensure of the reference biologic.
Imposing set prices on this timeline then may discourage biosimilar manufacturers from developing and bringing their medicines to market in the first place and will further reduce patient access. This new policy interferes with the competitive dynamics that were intended by Congress when they created the pathway for biosimilar products in 2010 through the BPCIA. While the Inflation Reduction Act did include a provision seemingly designed to address this problem, the “special rule” is inadequate, providing little clarity and insufficient time for biosimilar applicants looking to bring biosimilars to market.
The remarkable progress we’ve seen in the U.S. biosimilars marketplace stems from a policy environment that carefully balanced increasing competition while maintaining the incentives for innovation. In order to harness the full potential of the biosimilars marketplace and realize the savings they offer to our health care system, policymakers need to return to that balanced policy approach to ensure there are adequate incentives for continued innovation and patient choice.
Learn more about how biosimilars are working at PhRMA.org/Biosimilars
Jocelyn Ulrich
Jocelyn Ulrich, MPH, is Vice President of Policy and Research at the Pharmaceutical Research and Manufacturers of America (PhRMA). At PhRMA, she is responsible for developing legislative and policy analysis and research studies on a range of issues impacting innovative biopharmaceutical companies including intellectual property issues, FDA policy issues, the R&D process, the value of innovation, and other issue areas impacting the environment for innovation. In addition to her experience at PhRMA she has over 15 years of experience in the pharmaceutical industry at Pfizer, Human Genome Sciences, and EMD Serono in roles in clinical research management, investigator-initiated and collaborative research, and global policy and corporate affairs. Jocelyn holds an MPH in global health policy and management from New York University.
Jocelyn Ulrich
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