Biosimilars Are Making Inroads Into U.S. Market, but Challenges Remain
Since the FDA’s approval of the first biosimilar — Zarxio (filgrastim-sndz) from Sandoz, a division of Novartis Pharmaceuticals Corp. — on March 6, 2015, the agency has approved almost 40 more agents via the 351(k) pathway established under the Biologics Price Competition and Innovation Act (BPCIA), itself part of the Affordable Care Act (ACA). Although not all of those agents have launched yet, and almost all of the ones that have are all professionally administered, industry experts say they expect to see more competition in the space, depending on interchangeability status, provider uptake and the impact of the Inflation Reduction Act.
Following the late 2021 launch of insulin glargine, more self-administered biosimilars are expected in January 2023, when the first biosimilar of AbbVie Inc.’s tumor necrosis factor (TNF) inhibitor Humira (adalimumab) — Amgen Inc.’s Amjevita (adalimumab-atto) — is allowed via patent lawsuit settlement to enter the U.S. market, followed by no less than six more throughout the year. And although the space continues to evolve, Amgen’s recently released ninth edition of its Biosimilar Trends Report reveals that over the past six years, biosimilars have saved the U.S. health care system approximately $21 billion in savings.
The 39 approved biosimilars in the U.S. are for 11 reference products, and the 25 that have launched are for nine reference drugs, points out Renee Rayburg, R.Ph., vice president of specialty clinical consulting at Pharmaceutical Strategies Group (PSG), an EPIC company. Following the Humira biosimilars’ 2023 launches, another big launch is expected in 2029, when biosimilars of Amgen’s TNF inhibitor Enbrel (etanercept), two of which the FDA already has approved, will be allowed onto the U.S. market.
While Sandoz’s Omnitrope (somatropin) became the first biosimilar approved in the European Union on April 12, 2006, “biosimilar approvals in the U.S. have outpaced biosimilar approvals in the EU,” states Rayburg. “Eight years following the first year (2006) a biosimilar was approved in the EU, there were 15 biosimilars approved; in the U.S., eight years following the first year (2015) a biosimilar was approved,…there are 39 biosimilars approved.”
Within the biosimilars space, Rayburg tells AIS Health, a division of MMIT, that she sees a couple of trends. “For biosimilars for drugs billed through the medical benefit like Remicade, as more biosimilars for Remicade entered the market, we have seen the ASP [i.e., average sales price] for all the drugs (Remicade biosimilars and brand Remicade) decrease over time. We also saw a newer biosimilar, Byooviz,…enter the market at a list price 40% lower than brand Lucentis, a little higher than the expected 10% to 30% lower pricing.”
“Actions by the regulators and announcements by various pharmaceutical companies indicate that the biosimilars market will only continue to grow,” maintains Oliver Steck, a principal in Deloitte & Touche LLP’s Risk & Financial Advisory practice. “Complex and costly therapeutic areas such as oncology seem to be a huge focus for many companies.” And for good reason: PSG’s 2022 Artemetrx State of Specialty Spend and Trend Report reports that biosimilars for Roche Group member Genentech USA, Inc.’s Herceptin (trastuzumab) had a 68.6% market share in 2021 compared with 32.6% in the previous year, while market share for biosimilars of Genentech and Biogen’s Rituxan (rituximab) rose from 17.8% in 2020 to 61.8% last year.
Following Amjevita’s launch, four other approved Humira biosimilars and three pending ones have agreements with AbbVie allowing them to launch in July 2023, with potentially two more launches in September and one in November. With so many agents launching close together, this marks a very different trend than what the other biosimilars have experienced, with competitors often launching years apart.
“Being the first-to-market biosimilar is typically the key way to optimize market share among the competition,” says Jeff Stoll, principal and national strategy lead for life sciences at KPMG. However, Rayburg contends that “news of FDA approval of a new biosimilar is not as meaningful if the launch into the market is delayed, which is the case with Humira and Enbrel. Knowing when a biosimilar will launch helps to level set expectations for savings. The competition created just by the presence of the biosimilars in the market can lead to savings.”
“At the moment, we believe biosimilar uptake is impacted more by the educational aspect of health care practitioners and patients than the timing of market entry,” Steck says. “A majority of the world is not familiar with biosimilars and would probably be hesitant to use a biosimilar over a branded biologic. One could draw parallels to how generics were initially viewed when first introduced.”
How Big of a Deal Is Interchangeability?
In contrast to the EU, whose European Medicines Agency (EMA) and the Heads of Medicines Agencies (HMA) recently clarified that all biosimilars approved in the EU are interchangeable, the FDA has created two levels of biosimilars: biosimilars and interchangeable biosimilars. Manufacturers must specifically apply for the interchangeable designation, and the FDA has granted it to only three biosimilars so far: Viatris and Biocon Biologics Ltd.’s Semglee (insulin glargine-yfgn), with reference product Lantus (insulin glargine) from Sanofi Aventis; Boehringer Ingelheim Pharmaceuticals, Inc.’s Cyltezo (adalimumab-adbm), with reference drug Humira; and Coherus BioSciences, Inc.’s Cimerli (ranibizumab-eqrn), with reference drug Lucentis (ranibizumab) from Genentech.
Physicians must specifically prescribe biosimilars without interchangeable status. But agents with that designation may be dispensed at the pharmacy level without provider intervention. All 50 states, as well as Washington, D.C. and Puerto Rico, have enacted laws around interchangeable biosimilar substitution, with policies such as informing patients and physicians when a biosimilar is substituted without a prescription for that product. Still, interchangeability status for a biosimilar would seem to give that drug a leg up on competitors without it.
“Interchangeability offers ease in operations when it comes to dispensing,” declares Rayburg. “Those biosimilars designated as interchangeable can be dispensed for a prescription written for the brand reference product without authorization from the prescriber. Non-interchangeable biosimilars will require authorization from the prescriber to dispense, which adds more time and effort to the process when the drugs are being filled and dispensed through a pharmacy.”
“To date, interchangeability hasn’t had a big impact,” maintains Stoll. However, as Steck points out, the FDA approved the first interchangeable agent just over one year ago, on July 28, and the company didn’t launch it until Nov. 16. “I will be curious to see how the interchangeability status impacts adoption,” he says. “The first interchangeable biosimilar was approved by the FDA only in 2021, so it is still very early days.”
However, in a STAT-sponsored webinar held Oct. 12, Madelaine A. Feldman, M.D., FACR, president of the Coalition of State Rheumatology Organizations, pointed out that formulary status trumps interchangeability. Pharmacists could certainly substitute for a presumably less expensive interchangeable biosimilar, she said, citing Viatris’s launch of two versions of the interchangeable Semglee in November — branded Semglee and insulin glargine, an authorized interchangeable biosimilar — that had different wholesale acquisition costs. “But if they don’t have permission from the PBM and have it on the formulary, they can change it all they want, but the patient’s not going to be able to afford it. So interchangeability — unless all of the biosimilars that are interchangeable are on the formulary — it turns into more of an optics thing, so that if a particular payer puts the biosimilar that’s interchangeable [on its formulary], it certainly looks better. But again, interchangeability doesn’t mean that the patient will automatically have access to it, even if the pharmacist changes it, because unless it’s being paid for, it’s still too expensive for the patient to afford.”
In order to get on payer formularies, biosimilar manufacturers are employing a number of strategies, including offering “lower list prices, rebates, patient support programs, copay assistance — anything that helps the biosimilars compete with the brand reference products for market share,” states Rayburg.
According to Steck, “deals including offering rebates [and] flexible/innovative pricing such as value-based approaches may increase biosimilar utilization, allowing providers to reduce drug costs while maintaining high quality of care. Insurers have different preferences (biologic vs. biosimilar coverage) in what is covered for a patient, so an innovative pricing model may be beneficial.”
The use of formularies also is prompting a new dynamic: switching not from a reference drug to a biosimilar but switching among all the agents in a class, including from one biosimilar to another. “I really don’t have a choice” among agents to prescribe, explained Feldman, who also is a clinical assistant professor of medicine at Tulane University School of Medicine. “We are essentially told what to prescribe.…And part of the problem is that, as it stands now, payers can switch their formularies every six months. So I may be mandated for the reference product six months, then Biosimilar One six months later, and then six months after that Biosimilar Three, and then back to the reference product. And I think that’s one of the things that physicians have been a little bit leery of. But unfortunately, we really don’t have any say so in the matter. Having said that, I’ve had very few problems. But the idea of being mandatorily switched every six months is distasteful to a clinician that’s taken a long time to get a patient stable.”
Stoll acknowledges that switching among biosimilars is happening, but “not at meaningful rates.” Steck adds that “there is limited data [on this trend], as [the availability of] multiple biosimilars for a specific originator drug has only started to become more prevalent.”
Impact of Inflation Reduction Act Remains Unclear
The recently passed Inflation Reduction Act of 2022 (IRA) will for the first time allow Medicare drug price negotiations, but its impact on biosimilars is a bit unknown at this time. For example, Adam Fein, Ph.D., CEO of Drug Channels Institute, wrote in a Sept. 13 blog on his Drug Channels website that one possible unintended consequence is that the IRA will result in fewer biosimilar launches.
“It’s not entirely clear if some of the drug pricing provisions will have direct impacts, but there are concerns [that] implementation of the Inflation Reduction Act may lead to fewer companies bringing biosimilars to the market, impacting the competition and savings biosimilars provide today,” agrees Rayburg. However, “on a positive note, Medicare Part B biosimilars with a lower ASP than their originator brand product will get a higher reimbursement at ASP + 8% beginning [fourth-quarter] 2022. An ASP+ reimbursement environment does not incentivize the use of lower cost products, so increasing the reimbursement rates for biosimilars is a step in the right direction to increase the use of lower cost products.”
“In the U.S., the market history of biosimilars has had mixed success,” says Stoll. He acknowledges the “mixed views” on whether the IRA “will actually enable biosimilars to have better success or will stymie the development of future biosimilars. The IRA is the most significant legislation to impact the pharmaceutical industry since the ACA; however, the implications of the IRA on the pharmaceutical industry, drug pricing and how it impacts the innovation and biosimilars are still to be seen.”
Much of the impact will be determined by the way in which the law’s provisions are implemented, he tells AIS Health. “One thing that I think we can say is there are some obvious drugs that will be impacted in the near term, and these drugs will set a standard for how the industry and payers plan for similar future drugs. For example, Amgen’s Enbrel will likely see a Medicare price negotiation and other restrictions under the IRA. I think it’s safe to say that the days where a branded drug finds a way to have sustained 20 to 30 years of revenue growth before facing a market disruption is over. The IRA opens the door to negotiate prices on biologics after they’ve been on the market for 13 years.”
In situations where a biosimilar is expected to come to market in the near term, Medicare will delay price negotiations for the reference drug for two years. “However, there are points of views in the public that believe if Medicare does aggressively negotiate on price on top biologics, it will create market uncertainty and drive prices of the originator product down, and thus it might actually make it harder for biosimilars to justify entering the market if the originating product’s price is too suppressed,” Stoll says.
Payers Gear Up for Humira Biosimilars
As 2023 nears, perhaps the hottest topic when it comes to biosimilars is the entrance of biosimilars of Humira, the top-selling drug in the world. But the use of those competitors is not a foregone conclusion. That’s because as of early November, only one biosimilar of the drug — Samsung Bioepis Co., Ltd. and Organon & Co.’s Hadlima (adalimumab-bwwd), which is cleared to launch on July 1, 2023, and does not have interchangeable status — has FDA approval for a citrate-free, high-concentration formulation of Humira, although other companies have ones in development, including ones seeking interchangeability. At this point, though, interchangeable Cyltezo and the other biosimilars are approved in doses administered at a lower concentration that has largely been replaced in Humira prescribing.
In November 2015, AbbVie received FDA approval for a higher concentration, citrate-free Humira — which it launched in July 2018 — that now has most of the physician prescribing. This formulation has fewer excipients that often cause discomfort when injected, as well as a thinner needle.
So when potential competitors began developing their biosimilars, they were developing lower concentration versions. “Defense strategy” against biosimilars was one of the reasons for the gap between approval and launch, asserts a staff report from the U.S. House of Representatives’ Committee on Oversight and Reform released in May 2021.
Since the launch of the new formulation of Humira, most patients have been switched over to that version, notes Rayburg — “in our book of business, it is about 80%. The newer formulation offers a more comfortable injection experience, which most patients have become used to. Switching back to the original formulation may feel different to patients, which could impact transitioning to one of these biosimilars.…Having to switch back to the original formulation may be disruptive for some members; they may attribute the difference in injection experience to the biosimilar not working, which could impact the uptake of the biosimilar. I am not sure if this will create member noise or complaints, but in general when a member experiences anything that feels or seems different than the experience with the innovator brand product, [this] could impact the successful transition to that biosimilar.”
When Amjevita starts the biosimilar Humira boom, it will be the lower concentration (and citrate-free) formulation, Rayburg explains. “Amgen is pursuing a high concentration version, which is not expected to enter the market until July 2023 or later. There are currently seven biosimilars FDA approved, with another five pending FDA approval. This could create a lot of competition in this space. Several biosimilars are set to launch in July, but depending on strategies for coverage of the lowest net cost product, full savings potential as a result of Humira biosimilars may not be fully realized until going into 2024. However, what most payers should definitely experience is the highest costs and/or trend for Humira they will pay because the entrance of the Humira biosimilars should create enough competition to drive costs of all products down that should lead to savings.”
During a recent webinar, Fein asserted that 2023 will be a “transition year” and that “2024 is going to be the year that this all hits. And if Humira’s net price…is anything more than 70% off where it is today, I’ll be stunned. This is going to be a massively competitive category — it already is a competitive category — but it is going to be dramatically more competitive, and I predict we’re going to see some companies come in with a differentiating strategy on price and other companies come in with a we’re-going-to-play-the-rebate-game strategy.”
Biosimilar manufacturers also should strive to match their reference drug competitors in other ways. For example, the type of device used to administer an agent — for example, the on-body injector system for Amgen’s Neulasta (pegfilgrastim) known as Onpro — may be vital to uptake. The device is filled with Neulasta and attached to the abdomen or back of the arm of a person undergoing chemotherapy. Then, instead of having to return to the provider’s office for administration of Neulasta, the device automatically administers a dose of the drug on the day following chemotherapy. The FDA initially approved the medication as a manual injection in 2002 and then approved the Onpro system for use in 2014. Both formulations are available but are not interchangeable, as there is the potential for giving too much or too little of the recommended dose of Neulasta.
The FDA has approved six Neulasta biosimilars, but all of them have been approved for use as a manual subcutaneous injection, although some of the manufacturers are developing an on-body injector system. The availability of that system could impact a biosimilar’s uptake “potentially in a positive way, as it now offers a product that can compete with the dosage form that has been unique to Neulasta and in my experience has created challenges for the uptake of Neulasta biosimilars that do not offer that unique dosage form. Many patients and providers have wanted to stick with the brand because of the Onpro dosage form,” says Rayburg. “Having a biosimilar that will offer this unique dosage form will take away the advantage that today brand Neulasta offers.”
Stoll agrees: “Patients and physicians have choices. Patients are always going to prefer easy-to-use devices.”
According to PSG’s Artemetrx report, four Neulasta biosimilars had garnered only 39.3% of the pegfilgrastim market share in 2021, up from 31.8% in 2020 and 21.2% in 2019.
Manufacturers also could seek new routes of administration, although it remains to be seen if they will gain FDA approval via the biosimilar pathway, potentially a different approach from that of other pharmaceutical regulatory agencies. For example, the EMA, Korean Ministry of Food and Drug Safety (MFDS) and Health Canada have all authorized Celltrion Healthcare Co. Ltd.’s subcutaneous Remsima SC as a line extension of the company’s intravenous biosimilar infliximab, CT-P13. Its reference drug is Remicade from Johnson & Johnson’s Janssen Biotech, Inc. division, which is approved as an intravenous infusion.
While the FDA has approved four biosimilar infliximabs, they all have infused dosing. In the U.S., CT-P13 — which is commercialized by Pfizer Inc. — was approved as biosimilar Inflectra (infliximab-dyyb) in 2016. Celltrion is developing a subcutaneous version of the drug for use in the U.S., but the FDA is requiring that the company submit its application for approval as a new drug or so-called “bio-better” — not a biosimilar — although the agency did allow the company to skip Phase I and Phase II trials based on European clinical trial data.
“It will be interesting to see if this version of infliximab is able to be as durable as the infusion version,” remarks Stoll. “Historically, infusible infliximab was more durable for patients with IBD [i.e., inflammatory bowel disease] than the subcutaneous anti-TNFs. If it is identically durable, it could mean there are a lot of patients currently on IV Remicade or IV biosimilar infliximab who will switch. It would be an important event for IBD patients.”
In March, Celltrion said that data from the REMSWITCH clinical trial, which is assessing switching from intravenous infliximab to a subcutaneous formulation, showed that this approach “is feasible, well-accepted and leads to a low risk of relapse in patients with IBD.”
If the FDA approves the new version, “it will be another competitor in a crowded market of inflammatory condition drugs that offers a mix of dosage forms including IV, subcutaneous and oral medications. In that sense it would offer another option,” says Rayburg. “Specific to infliximab, it offers a more unique dosage form, and if this subcutaneous formulation can be self-administered, it may offer advantages in the infliximab market, as Remicade and its biosimilars are all IV administered and come with risks of higher costs depending on the site of administration. It could offer the convenience of at-home dosing, which may help to position it more favorably for patients.”
Contact Rayburg via Betsy Van Alstyne at Betsy.VanAlstyne@epicbrokers.com, Steck through Julie Landmesser at firstname.lastname@example.org and Stoll through Megan B. Miller at meganbmiller@KPMG.com.