Realizing the Promise of Biosimilars

The promise of biosimilar medicines for the U.S. health system and for American patients dealing with serious conditions, from cancer to diabetes has yet to be fully realized.

According to the IQVIA Institute for Human Data Science, the broader adoption of biosimilars could ultimately help to reduce drug costs in the U.S. by $100 billion over the next 5 years.¹
Policies must be implemented to encourage the use of cost-effective, high-value off-patent competition and streamline regulation to support the realization of biosimilar savings potential for patients and the healthcare system.

Supporting Competition

Streamlining Regulation

What Are Biosimilars?

According to the FDA, a biosimilar is a biological product that is highly similar to and has no clinically meaningful differences from an existing FDA-approved reference product.

Supporting Competition

At Viatris, we believe that supporting a robust, competitive biosimilars market is essential to the future of access to medicines. Today, 8 of the top 10 drugs by spending in the U.S. are biologics⁷. The top ten drugs by spending in Medicare Part B are biologics⁶. Looking forward, this trend will continue: 16 of the 34 drugs accepted as a breakthrough therapy by the FDA in 2020 were biologics. Realizing a successful competitive landscape for the off-patent versions of these top-spend products is critical to the long-term viability of U.S. healthcare, including the sustainability of the Medicare program, and to helping patients managing the financial demands of treatment.

What Barriers Exist Today?

The main barrier to strong biosimilar competition in the U.S. market is the lack of alignment in incentives to prescribe and utilize biosimilars at all levels of decision-making.

While the overall health system stands to gain tremendous savings from biosimilar adoption, the current landscape is unsustainable. Often when biosimilars are launched, insurance companies point to their lower prices to negotiate concessions on originator biologics. Biosimilars end up being used as a negotiating chip rather than replacing expensive originator products.
For patients, the out-of-pocket payment cost for a biosimilar medicine versus the originator brand is highly dependent on how insurance plans decide to cover the medicines. In some cases, a patient may have to pay a higher out-of-pocket cost for a biosimilar even if the list price is thousands of dollars lower than originator brand biologic.

Even if a biosimilar medicine is covered by insurance, the healthcare provider may not be set up to offer it to patients. Patients could be stuck paying the unnecessarily high cost for a biologic because the provider has no incentive to switch products once the biosimilar is launched. In many cases, providers are reimbursed more for prescribing the originator brand instead of the biosimilar. Switching to a biosimilar requires administrative work and additional time to educate patients about biosimilar medicines.

How Do We Fix This?

Viatris supports several policy solutions that can address these issues and correctly align incentives to ensure patients receive the benefit of lower-cost biosimilars.

Shared Savings

Through the Center for Medicare & Medicaid Innovation (CMMI), CMS should implement models that create physician incentives to utilize lower-cost biosimilars, including a “shared savings” model where reinvestments among the Medicare savings created from prescribing a biosimilar would be shared with providers. This policy can save $3B in tax dollars over the next ten years.²

Increase ASP Add-on Payment Rate for Biosimilars

CMS should increase the add-on payments for prescribers of biosimilars for a five-year period. This policy will incentivize biosimilar use by increasing the amount doctors in Medicare Part B are reimbursed for administering these lower-cost therapies. The U.S. can reduce as much as $8.2B in health costs over the next decade with this policy.³

Reducing Seniors’ Out-of-Pocket Costs for Biosimilars in Medicare Part B

The CMS Medicare program can take action to reduce patient out-of-pocket costs for biosimilars. This could save seniors in Medicare as much as $3.3 billion in out-of-pocket costs and up to $5.2 billion in taxpayer dollars over ten years, due to increased use of these lower-cost therapies.⁴

Leveraging Star Ratings to Encourage Insurers to Offer Lower-Cost Biosimilars

Adding a new quality measure in the Medicare Advantage (MA) and Part D Star Rating system to include assessments of plan benefit and formulary design in encouraging patient access to biosimilars will help bring transparency to all stakeholders to know which plans are offering access to lower cost biosimilars, which in turn will help inform patient decision-making when selecting a plan.⁵

Biosimilars and Cancer

Biosimilars represent the potential for significant savings, while also offering increased access to cost-sensitive patients.

10K

Cancer medications can cost more than $10,000/month⁸

6/10

6 of the top 10 drugs by spend in Medicare Part B are originator cancer biologics⁹

$10 BN

Originator cancer biologics cost patients and payers more than $10 billion/year¹⁰

Biosimilars represent an opportunity for significant savings for cancer care

Streamlining Regulation

Biosimilar development and approval can be a lengthy and costly process, sometimes taking up to ten years and $200 million for a single biosimilar to reach approval¹¹. A large part of this resource burden is driven by regulatory requirements, particularly those that require differentiated approaches in various countries. Streamlining regulatory requirements for biosimilar development, approval, and post-approval maintenance has the potential to speed access to biosimilars and improve future biosimilar competition.

The U.S. FDA has made great progress in reviewing and approving biosimilar medicines since the Biologics Price Competition and Innovation Act (BPCIA) was passed. As of March 2021, there have been 29 biosimilars approved by the FDA for 9 molecules. The FDA has also provided substantial guidance to industry on many aspects of biosimilar development and approval.

Additionally, the FDA has been a vocal champion for public trust in biosimilar medicines, through the Biosimilars Action Plan and education initiatives targeting healthcare providers and patients to ensure the trusted voice of the FDA reaches those who stand to gain the most from acceptance of biosimilar medicines.

FDA Guidance on Biosimilars

FDA Biosimilars Action Plan

FDA Biosimilar Education Initiatives

Biosimilars and interchangeable products meet the FDA’s high standard for approval. These standards should assure health care providers that they can be confident in the safety and effectiveness of biosimilars and interchangeable product, just as they would be for an FDA-approved reference product.

Food and Drug Administration

As biologic medicines increasingly become the standard of care for many different conditions, including cancer, diabetes, and rheumatoid arthritis, more biosimilar competition is needed. Building on scientific advances to ensure that regulatory requirements are tailored and fit for purpose is essential. Globally, Viatris supports regulators aligning requirements to allow for single global development of biosimilar medicines. Some regulators – such as the MHRA – and industry experts – such as IGBA – have already started down this path, including re-evaluating the utility of large clinical trials to confirm the similarity of biosimilar medicines with their reference products.

MHRA - Guidance on the licensing of biosimilar products

IGBA - The Path Towards a Tailored Clinical Biosimilar Development

IGBA - Developing a Regulatory Policy Framework for Supporting Biosimilar Competition

¹Biosimilars in the United States 2020-2024: competition, savings, and sustainability. IQVIA. September 29, 2020
²Cornyn release https://www.cornyn.senate.gov/content/news/cornyn-bennet-introduce-bill-address-high-cost-prescription-drugs-seniors, House bill text: https://www.congress.gov/bill/116th-congress/house-bill/6179/titles
³https://schrader.house.gov/newsroom/documentsingle.aspx?DocumentID=392607, Section 104 of S. 2543 - Prescription Drug Pricing Reduction Act, Sponsors: Senators Mike Enzi (R-WY) and Tom Carper (D-DE): https://www.congress.gov/bill/116th-congress/senate-bill/2543/text, https://www.biosimilardevelopment.com/doc/the-proposed-biosimilar-shared-savings-model-a-closer-look-0001
⁴ https://www.congress.gov/bill/116th-congress/house-bill/4597
⁵ H.R. 4629 - Star Rating for Biosimilars Act https://www.congress.gov/bill/116th-congress/house-bill/4629, Section 132 of S. 2543 - Prescription Drug Pricing Reduction Act, Sponsors: Senators Bill Cassidy (R-LA) and Bob Menendez (D-NJ) https://www.congress.gov/bill/116th-congress/senate-bill/2543/text
⁶https://www.cancer.gov/about-cancer/managing-care/track-care-costs/financial-toxicity-hp-pdq
⁷Evolution of Pharmas Blockbusters Infographic; Janet Haniak Scrip Informa Pharma Intelligence
^8,9,10 CMS Medicare Spending Dashboard
¹¹ Emerging Health Care Issues: Follow-on Biologic Drug Competition. Federal Trade Commission Report, June 2009. Ftc.gov.