The Importance of the Biosimilar User Fee Act

The Biosimilars User Fee Act (BsUFA) was enacted in 2012 to help provide the 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.

Enacted on September 30, 2022, BsUFA III builds on the success of the program and supports increased 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 is, in turn, helping increase competition in the marketplace to the benefit of patients.


Increasing Competition for 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 biosimilars are introduced. As of the end of 2022, 40 biosimilars have been approved and there are 27 biosimilars on the market in the U.S. competing against ten brand biologics with several more scheduled to launch throughout 2023. Among these launched biosimilars are the first interchangeable biosimilar products, which may be substituted at the pharmacy counter without intervention from the prescriber, similar to many generic drugs. In addition, the FDA reported as of December 2022, there are over 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. As a result of increased launches and competition, the cumulative savings in total drug spending for classes with biosimilar competition are estimated to have reached $21 billion over the past 6 years, with much of this savings benefiting the Medicare Part B program.

Over the next five years, savings attributable to biosimilars are projected to exceed $180 billion, a more than four-fold increase from the last five years, with much of this savings benefiting the Part B program.[1] However, future savings depend on a variety of factors that may influence the evolving landscape — including many of the misaligned payer incentives which impede uptake of biosimilars and the threat of the IRA chilling biosimilar competition in the years ahead.


Supporting a Robust Biosimilars Market in the U.S.

In order to harness the full potential of the biosimilars marketplace and realize the savings they offer to our health care system and patients, we need a balanced approach that reduces barriers to uptake of biosimilars and continues to foster a competitive biologics and biosimilars marketplace.

Further focus and attention in the following areas is needed to continue to foster a robust biosimilar market:

  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 the program is more focused on helping rural and safety net providers. 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 realign PBM incentives may also reduce barriers to biosimilar uptake and promote access and competition. To address misaligned incentives which government agencies, economists, and other experts note may lead PBMs to favor medicines with high list prices and high rebates, PBMs should be prohibited from receiving compensation calculated as a percentage of a medicine's price. Instead, PBMs should receive flat fees based on the services they provide. Requiring the rebates, discounts, and other price concessions that PBMs receive from pharmaceutical manufacturers to be passed on to patients at the point of sale also realigns the incentives that may encourage PBMs to favor higher priced medicines. It also ensures that patients receive the benefit of those negotiated discounts when paying their cost sharing, the way they do with every other medical or provider service for which they must pay an out-of-pocket cost.
  3. To help ensure the preservation of the competitive biosimilar marketplace, the Centers for Medicare and Medicaid Services should implement the “Special Rule” in the Inflation Reduction Act using clear and consistent criteria and with as much flexibility as possible.
  4. 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.

In enacting the BPCIA over a decade ago, U.S. policymakers rightly sought to balance increased competition with policies that support the United States’ leading role in finding new treatments for patients. By allowing the market to continue to evolve and enacting policies that support this evolution, we’ll continue to see biosimilars’ benefits for patients and society.

Website updated as of June 2023

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