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The Importance of the Biosimilar User Fee Act

The Biosimilars User Fee Act (BsUFA) was enacted in 2012 to help provide FDA with resources and staffing specifically to support the biosimilar approval pathway and promote greater consistency, certainty and predictability in the review of biosimilar and interchangeable biosimilar products. BsUFA is vital to the regulatory review of biosimilar and interchangeable biosimilar products and the mission of the FDA to protect and advance public health. BsUFA has played an essential role in strengthening the FDA’s ability to implement a regulatory review approach for biosimilar products that is consistent with the Agency’s high standards for scientific rigor and patient safety.

BsUFA II (FY2018 – FY2022) was informed by lessons learned from initial experiences with the program and included initiatives to enhance the biosimilar review model, promote more informative engagement between the FDA and biosimilar product developers, and help ensure the long-term sustainability of BsUFA activities.

The FDA released the draft Performance Goals Letter for BsUFA III in September 2021. Under it, BsUFA III initiatives will build on the success of the program and help increase timely access to safe and effective biosimilar and interchangeable biosimilar products. In helping provide FDA with the resources needed to enhance the development and review of biosimilars, BsUFA III will, in turn, help increase competition in the marketplace to the benefit of patients.

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Increasing Competition for Biologics and Biosimilars

The U.S. biologics and biosimilars market is evolving rapidly, and the benefits for patient access and controlling health care costs will continue to grow over time as more medicines are introduced. As of October 2021, 31 biosimilars have been approved—including the first interchangeable biosimilar. And 21 biosimilars are on the market in the U.S., competing against 8 brand biologics. Subsequently, there has been one additional interchangeable biosimilar approved. In addition, the FDA reported as of June 2021, there are nearly 100 biosimilars in development for which sponsors are paying 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 introduced, the U.S. market has significantly evolved. In fact, the U.S. has approved more biosimilar products than the European Union had in a comparable period of time. 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.

Owing to this successful framework, competition has become increasingly robust with annualized savings from biosimilars reaching $6.5B in 2020 and average sales prices for biosimilars reported to be as much as 45% less than brand biologics price at the time of first biosimilar launch. Biosimilars are also reaching much greater market uptake far quicker than earlier launched biosimilars, reflecting a maturing biosimilar market and continued positive shifts in provider and patient attitudes towards biosimilars. For example, in 2020 biosimilars competing against brand biologics in Medicare Part B garnered as much as 77% of the market driving significant savings for patients and Medicare.

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Supporting a Robust Biosimilars Market in the U.S.

Looking forward, biosimilars are projected to drive an almost 5-fold increase in savings as new biosimilars launch and existing biosimilars see continued uptake and price declines. These savings are expected to exceed $100 billion in aggregate between 2020 and 2024. In order to harness the full potential of the biosimilars marketplace and realize the savings they offer to our healthcare system, further focus and attention is needed in the following areas:

  1. We need to reduce perverse incentives driven by the 340B program. Policymakers should reform the 340B program to ensure patients benefit more directly from the discounts provided by manufacturers and that hospitals participating in the program are held accountable for how they use 340B discounts to benefit patients. This will not only help patients as intended but can also help reduce the financial incentives which may discourage use of biosimilars.
  2. Meaningful reforms to the rebate system may also reduce barriers to biosimilar uptake and promote access and competition. Reforming the existing rebate system is expected to redefine the competitive landscape for payers and reshape the contracting relationships between stakeholders. As a result, as Milliman has noted, some of these reforms may promote increased uptake of generics and biosimilars which in turn could encourage more biosimilar launches.
  3. Additionally, though increasing uptake of biosimilars indicates a positive shift in physician and patient attitudes towards the use of biosimilars, we need to encourage continued focus on increasing provider and patient education to maximize the benefits of that shift—this effort should include the development and dissemination of evidence-based materials on the full range of treatment options, including biosimilars, to further support appropriate biosimilar adoption. In April 2021, the Advancing Education on Biosimilars Act was signed into law, encouraging FDA to maintain and operate an educational website and advance awareness among health care providers, patients and caregivers about biosimilar and interchangeable biosimilar biological products.
  4. Now and into the future, ensuring the long-term stability of the BsUFA program through financial transparency, efficiency, and accountability will be critical to further ensuring robust competition in the biosimilar marketplace.
  5. Lastly, to continue to foster the rapid emergence of the robust market for biosimilars we are seeing today, we need to maintain a balanced approach to reimbursement policy to ensure there are adequate incentives for continued innovation and facilitating patient choice.

Website updated as of October 26, 2021