AAM All Access Podcast - Dan Leonard speaks with Mary Beth Powers, President and CEO of CMMB.

The Evidence Is Clear: Biosimilar Competition Will Achieve More Savings for Patients Than Build Back Better’s Negotiations

The biosimilars industry is proving that market competition works to drive down drug costs and increase patient access to medicines. According to IQVIA, savings from biosimilars increased over 800% from 2018 to 2020, from under $900M in 2018 to $7.9B in 20201,2. This is the result of new biosimilar launches and robust competition under which multiple biosimilar drug manufacturers win market share based on lower prices.

This progress is also the result of new regulatory approvals that create the opportunity for biosimilars to compete in a manner similar to generic drugs. For instance, the FDA has approved the first interchangeable biosimilar products, including Semglee, the first interchangeable biologic insulin, and Cyltezo, an interchangeable biologic for Humira, the top-selling drug in the United States.

Biosimilars are complex products that can require 8 to 10 years to materialize, at a cost of $100 to $250M3. After years of high-risk investment, the biosimilar industry is poised to deliver tremendous savings to the U.S. health care system, improving access for patients and lowering prescription drug costs. However, the negotiation framework in the Build Back Better Act threatens this progress and could undermine biosimilar competition, resulting in fewer options for care and higher costs for patients.

Under the proposal, the Department of Health and Human Services (HHS) would be required to set prices for 100 drugs or more by 2031, many of them reference biologics that could be subject to biosimilar competition. So how do potential savings from price controls compare to straight-up biosimilars competition? Poorly.

Savings from Biosimilar Competition Benefits All Patients, Not Limited to Medicare

Although early in the process, biosimilars are already delivering savings at a rapidly increasing pace. They are delivering savings through competition resulting in prices that are now, on average, more than 50% less than the brand price at the time of the biosimilar launch. And this competition is forcing brands to reduce their prices – by more than 28% on average. In fact, gold-standard drug data firm IQVIA estimates biosimilars will deliver more than $130 billion in savings to the US healthcare system by 2025 alone. That is greater savings for patients than the Build Back Better proposal and it starts right now. And as more biosimilars and interchangeable biologics become available, there is the potential for much larger savings as providers and payers take advantage of the opportunities to improve access and reduce costs for patients with these products.

Unfortunately, the Build Back Better Act puts these savings in jeopardy. While the revised bill includes some provisions that would temporarily remove drugs from negotiation at the discretion of the Secretary if a biosimilar manufacturer showed, by clear and convincing evidence, that there was a high likelihood of biosimilar competition, the aggressive use of non-innovative patents by brand-name pharmaceutical companies can delay entry for some biosimilars past the point of the negotiation window. But rather than addressing the abuse of patents, the Build Back Better framework instead imposes price controls that may have the unintended consequence of perversely benefitting the brand-name drug. The cumulative result is that the uncertainty associated with developing and bringing a biosimilar to market would skyrocket and the potential market opportunity for lower cost competitors would be cut by at least 60%. At the time biosimilar makers decide on whether to commit to a $100-$250 million investment, they will not know whether a reference product will be selected for negotiation or what the negotiated price might be. This means that the Build Back Better Act’s negotiation framework threatens the future of an industry that is only now gaining a strong foothold and has already demonstrated its promise by helping cut by 50% the spending growth rate in oncology treatments.

Congress created the pathway for biosimilars with enactment of the Biologics Price Competition and Innovation Act (BPCIA) in 2010, and now biosimilars are beginning to deliver on their promise. The Build Back Better’s negotiation framework represents a significant policy change and a step backwards that harms patient access to lower-cost medicines and creates a perverse outcome that enhances brand drug market share. By discouraging biosimilar competition and rewarding more brand patent gamesmanship, the proposal will leave savings on the table, and result in higher costs for patients, taxpayers and employers.

Share Your Voice

Tell Congress to protect access to your safe, affordable generic and biosimilar medicines.

Take Action
 

Craig Burton


By Craig Burton, Senior Vice President, Policy and Strategic Alliances
Executive Director, Biosimilars Council
Published on July 20, 2022

 


References

  1. IQVIA, National Sales Perspectives, Dec 2020. (Link)
  2. IQVIA, The Use of Medicines in the U.S.: Spending and Usage Trends and Outlook to 2025, May 2021. (Link)
  3. Blackstone EA, Joseph PF. The Economics of Biosimilars. Am Health Drug Benefits. 2013;6(8):469-478. (Link)

 

Issues

Association for Accessible Medicines

202.249.7100

Sign-up for Updates

Receive relevant industry news, event information and the latest resources on biosimilars and generic medicines.

Stay Connected

For the latest updates, follow us on social media.