Have you ever heard of biosimilars? They’re becoming a hot topic in the healthcare industry, specifically when talking about the high cost of prescription drugs.
So, what are biosimilars?
In layman’s terms, a biosimilar is a medicine that is very close in structure and function to a biologic medicine — meaning, it’s almost an identical copy of the original drug manufactured by a different company.
In slightly more complex terms, biologic specialty medications that lose patent protection do not go “generic” in the traditional sense, because the drug chemistry of biologics involves living tissue and complex molecules that are not easily or directly replicable from one manufacturer to another. Competing products to these original products are biosimilars, which are therapeutically equivalent to the originator product. That being said, it’s important to note they are “similar,” not the same.
Biosimilars Present a Cost-Savings Opportunity
In the U.S., when biosimilars are launched, there is a dual effect:
- They reduce the costs of all biosimilars for the reference product in the market. Biosimilars typically launch at list prices that have been on average 15-40 percent lower than the reference product.
- They reduce the costs of the reference product.
The year 2023 presents a cost-saving opportunity for the U.S. market with a popular injectable drug, Humira, facing competition from biosimilar manufacturers.
How much cost savings will there be as a result? The cost savings impact will be determined by the market share of biosimilars. Market share is largely driven by several factors:
- The placement on Pharmacy Benefit Manager (PBM) formularies
- Interchangeability status with Humira at the point of sale
- Prescribers feeling confident in the safety and efficacy with the biosimilars
- The pricing strategy employed by the reference product manufacturer to retain current users
Said another way, biosimilars entering the market will only generate cost savings if prescribing physicians are comfortable with the new drug’s effectiveness of treatment AND if the manufacturer of the reference product does not incent PBMs (often through rebates) to keep the reference product on the formulary as the preferred drug.
Looking across the pond, biosimilars for Humira have been on market since 2019. Uptake in the European Union has been strong, with biosimilars making up 60 percent market share with differing adoption levels by country.
How Do Biosimilars Impact Employers?
Employee Benefits plan sponsors looking to capitalize on the coming biosimilars should consider the factors that drive market share when selecting a PBM and a biosimilar strategy. Driving to lowest net cost should benefit the plan sponsor as well as the patient, making the pricing strategy of the biosimilars and Humira significant in 2023.
Factors that go into pricing strategy include list prices, discounts, financial assistance, and rebates. Choosing the right biosimilar is integral to maintaining the balance in benefits between plan sponsors and patients.
I do understand this may be a new topic (and perhaps a confusing one to many). I’m happy to talk through all of this with you. Send an email, and let’s chat!
