Expanding patient accessibility and health equity
By Bruce Feinberg, D.O., vice president of clinical affairs and chief medical officer
Biologics have transformed medicine, bringing innovative, life-changing treatments to patients with cancer and chronic diseases. They have also significantly contributed to the rapidly rising cost of healthcare in the U.S. However, as their patent exclusivity ends, a new competing class of drugs called biosimilars has emerged. (Learn more about biosimilars here.)
Like biologics, biosimilars are medicines made from living cells (such as yeast, bacteria or animal cells) and used to prevent and treat diseases. And, like generic drugs, biosimilars are expected to produce the same clinical result as their reference biologics products at lower costs. By some estimates, biosimilars have already saved the U.S. healthcare system billions of dollars.
With 41 biosimilar products approved by the U.S. Food and Drug Administration (FDA), and 25 already commercially available, the adoption of biosimilars by healthcare providers has continued to grow year-over-year in almost all product classes facing competition, with several classes experiencing high single-digit, and in some cases, double-digit, adoption growth, according to the most recent 2022 U.S. Generic and Biosimilar Medicines Savings Report from the Association for Accessible Medicines (AAM).
Perhaps most importantly, according to the same report, biosimilars were responsible for driving savings of $7 billion in biologic spending in 2021 alone. Cumulative savings since 2015 have now climbed to $13 billion. Within Cardinal Health’s own provider networks, cost savings have exceeded $3 billion over our last four fiscal years (from July 2018 to July 2022) as care providers transition to biosimilar products.
With seven new biosimilars approved by the FDA and several new biosimilar commercial launches, 2022 brought much excitement to healthcare providers and to the healthcare industry as a whole. As featured in the 2023 Biosimilars Report, here are highlights of some of the most noteworthy milestones in the development and adoption of biosimilars from the past year.
Milestone 1: The first biosimilars for eye care
After receiving initial FDA approval in 2021, the first ophthalmology biosimilar was launched in July 2020 by Biogen (in partnership with Samsung Bioepis). Known as ByoovizTM (ranibizumab-nuna), it is used to treat patients with neovascular age-related macular degeneration (wet AMD). The biosimilar was launched at about 4% of the cost of its reference biologic, LucentisTM (ranibizumab) by Genentech.
Soon after, a second ranibizumab biosimilar, CimerliTM (ranibizumab-eqrn), was launched in October 2022 by Coherus Biosciences. This second ranibizumab biosimilar was also awarded an interchangeability designation, becoming the first medical benefit biosimilar to achieve the designation thus far. Interchangeability is a regulatory designation, unique to the U.S. market, that allows for a biosimilar to be automatically substituted for its reference product by a pharmacist (pharmacist-level substitution), per state laws. Interchangeability does not denote any clinical superiority over a non-interchangeable biosimilar.
While it is still too early to know how quickly these early launches will be adopted, we expect share shifts in the retina market to slow, given that significant provider hesitation with biosimilars remains, according to Cardinal Health’s market research data.
Milestone 2: Growth in products pursuing and achieving interchangeability
In 2021, the first interchangeability designation in the U.S. was given for SemgleeTM (insulin glargine-yfgn). While adoption of SemgleeTM has increased over the last year (hovering around 10% market share), the transition to this first biosimilar insulin is viewed by many as slower than expected considering the significant cost challenges facing insulin-dependent patients with diabetes. In an updated report, it was still cited that nearly 20% of Americans resort to insulin rationing. As this dynamic continues to play out, it highlights the significant complexities within U.S. pharmaceutical channels and brings to light the additional adoption challenges biosimilars may face in the retail class of trade.
Today, we have four interchangeable biosimilars: two long-acting insulin biosimilars, one adalimumab biosimilar, and one ranibizumab biosimilar. As the biosimilars market continues to grow with more launches expected on the pharmacy benefit side (rather than provider-administrated medical benefits), we will expect to see commensurate growth in the number of products pursuing, and ultimately, achieving, an interchangeability designation. We anticipate many manufacturers of biosimilar assets will view interchangeability in the pharmacy benefit as a competitive advantage and choose to conduct the additional research generally required for that designation.
Looking to 2023, at least four additional HumiraTM (adalimumab) biosimilar manufacturers are pursuing interchangeability. Beyond adalimumab, several manufacturers have signaled that they plan to pursue interchangeability for other biosimilar candidates.
Milestone 3: Unveiling Enhancing Oncology Model (EOM) and Reauthorization of BsUFA III
Following the end of the Center for Medicare and Medication Innovation (CMMI)’s value-based program, Oncology Care Model (OCM), on June 30, 2022, the CMMI unveiled a replacement program named the Enhancing Oncology Model (EOM). The OCM proved to be a powerful model that contributed, in part, to the dramatic growth and adoption of biosimilars in the oncology market with a focus on providing high-quality cancer care at the lowest cost.
The delay in the launch of the EOM resulted in a roughly one-year gap between the expiration of OCM and the launch of EOM, which is now set to launch on July 1, 2023. As the market prepares for the launch of EOM, we are hopeful that biosimilars will continue to be viewed as integral tools in providing high-quality, lower-cost cancer care in the U.S. market.
Separately, on September 30, 2022, President Biden signed into law the FDA User Fee Reauthorization Act of 2022, which includes the Biosimilar User Fee Act (BsUFA III). BsUFA III authorizes the FDA to assess and collect fees for biosimilar products over the 5-year period from October 2022 through September 2027. These biosimilar user fees are dedicated to helping expedite the time needed to review biosimilar applications for approval and facilitate timely access to safe and effective biosimilar treatment options for patients. Additionally, the BsUFA III commitment letter outlined the creation of a new biosimilar Regulatory Research Pilot Program and five research grants were awarded and funded by the FDA as part of the pilot in October of 2022.
With the reauthorization behind us, we can be further ensured of the regulatory commitment to timely review of biosimilar assets in the pipeline and advancement of biosimilar development policies in the U.S. market.
Milestone 4: Inflation Reduction Act
Signed into law in August 2022, the Inflation Reduction Act (IRA) has several direct and indirect connections to the biosimilars market. With a robust set of funding, this act incorporates several of President Biden’s domestic policy priorities and sweeping reforms to environmental, healthcare, tax, and infrastructure policy. Perhaps the most well-known healthcare reform in the IRA is the federal government’s ability to negotiate pharmaceutical prices for Medicare. More specifically, biologics that have been on the market for at least 13 years will be subject to negotiation starting in 2026 for Medicare Part D drugs and 2028 for Part B drugs. Beyond negotiation, the IRA resulted in changes to reimbursement methodology, and, as its name implies, also imposes requirements for drug manufacturers to pay the federal government if prices for certain drugs increase faster than the rate of inflation. (You can read our full analysis on the IRA on page 57 of the 2023 Biosimilars Report.)
Milestone 5: Early indications of formulary coverage for adalimumab biosimilars
One of the biggest previously unanswered questions regarding the adalimumab biosimilar “event” was whether these products could gain coverage on payer/pharmacy benefit management (PBM) formularies quickly. January 2023 represented a watershed moment for the biosimilars market as the first adalimumab biosimilar launched commercially in the U.S. after originally receiving FDA approval in September 2016. Several additional biosimilars are expected to launch mid-year, including at least one biosimilar carrying an interchangeability designation. As of our writing, two major PBMs (OptumRx and Express Scripts) have issued public statements indicating that they plan to cover both reference adalimumab and several biosimilar adalimumabs once available.
The clarity that potentially several adalimumab biosimilars will become preferred products on major PBM formularies in 2023 is cause for celebration. However, with current indications that reference adalimumab will also be retained as a preferred product along with the biosimilars (known as parity coverage), it will be difficult to gauge how much utilization will transition to the biosimilars in 2023. Assessing the pros and cons of a potential patient transition will become increasingly important for patients and providers. Patient out-of-pocket costs between the reference product and biosimilars, comparing product differences (e.g., citrate-free, concentration differences, device differences), presence of an interchangeability designation, and the level of manufacturer wrap-around patient support programs will all add to this complexity.
We expect this year will be filled with much analysis and discussion regarding adalimumab’s official loss of exclusivity and anticipate the entire healthcare industry will be watching for early signs of adoption, potential cost-savings, and increased access for patients in one of the costliest disease states globally.
Biosimilars will continue to hold significant promise to positively impact patient care for millions in the U.S. as we push for a more equitable healthcare landscape.
Bruce Feinberg, D.O., vice president of clinical affairs and chief medical officer at Cardinal Health, is nationally recognized for his expertise in specialty oncology and the business of specialty healthcare. Feinberg has been instrumental in the development of clinical pathways that aim to control costs, improve quality, and increase predictability, all of which are key factors in developing a sustainable approach for caring for patients with high-cost diseases. A highly sought-after researcher and speaker on healthcare policy, value-based care and real-world evidence research, Feinberg has more than 200 publications in peer-review. He is also the author of the bestselling Breast Cancer Answers and its follow-up book, Colon Cancer Answers, both published by Lenz Books.