We are on the brink of several new drugs coming to market which will forever change the pharmacy landscape: biosimilars.
In the U.S., more than 90 biosimilars are in development today. 39 biosimilar products have already been approved by the FDA, but only 25 are currently available for use. It’s important for all plan sponsors and policyholders to know what a biosimilar is, how it will affect the overall healthcare market, and how health plans can help encourage the adoption of these much-anticipated new drugs.
What are biosimilars?
A biosimilar is a specific biologic, which are powerful therapies derived from living organisms, making them different from traditional medicines, which are created using a chemical process.
According to the FDA, a biosimilar has no clinically meaningful differences in terms of safety, purity, and potency (safety and effectiveness) from an existing FDA-approved biologic.1
Think of biosimilars in the same way you would a generic drug. A generic drug is a duplicate of a brand-name drug and can be used to treat the same ailments, with the same effectiveness.2
The one main difference is that, unlike a generic version, a biosimilar is not an exact copy of the brand-name drug. This is because the biologic is made with living organisms, which cannot be copied exactly like that of the chemical makeup in drugs made from chemicals.2 Now, even though the biosimilar is not an exact copy, it behaves similarly to the brand-name biologic drug and therefore has “no major differences”.2
Simply put, biosimilars are as safe and effective as their biologic reference products. This is not unlike the relationship between generics and their brand-name counterparts: Safe, clinically equivalent, and likely to deliver lower-net costs for patients and plans.1,2
In 2023, a number of biosimilars for inflammatory conditions are expected to come to market driving cost competition in the therapy class. Amongst those expected to be approved are interchangeable biosimilar therapies.
For a biosimilar to be interchangeable it goes through extra steps in the FDA approval process, including demonstrating the same clinical result as the original biologic in any patient.
Depending on state laws, interchangeable biosimilars can be substituted for a prescribed reference product at the pharmacy counter by the pharmacist, which could represent cost-saving opportunities for both the patient and the plan.
Biosimilar impact on drug pricing
The competition from biosimilars tends to have a positive impact on lowering overall drug pricing with prices up to 35% lower than their FDA-approved reference biologic counterparts. However, a few factors continue to stifle more widespread biosimilar availability in the U.S. These include:
- State approval of biosimilar interchangeable designation
- Branded biologic patent thickets
- Biosimilar patent disclosures
How to maximize the benefits of biosimilars
Even with these challenges, biosimilars represent a huge opportunity to make life-changing and life-saving therapies for debilitating conditions like rheumatoid arthritis and complex conditions like cancer more accessible.
So, what can health plans do now to ensure they maximize the opportunity?
Optimize plan design and formulary management
- To increase awareness and adoption of biosimilars, health plans should consider utilizing specialty drug tiering in their plan design to account for these new drugs. Strategic formulary management will also help to capitalize on the lowest net cost options.
Integrate a full range of specialty cost-control solutions
- Many of the same cost-control techniques health plans already rely on to drive better health outcomes and lower costs can also facilitate the most appropriate and cost-effective use of biosimilars, including prior authorization, step therapy, medical drug management, and site of care redirection.
Provide educational resources to members and providers
- Providers and patients have varying degrees of knowledge and concerns about biosimilars’ safety, efficacy, and possible financial benefits. Health plans can help educate by sharing evidence-based educational materials on biosimilars with these parties, in addition to providing regular updates on how biosimilars impact benefit options.
What does this mean for Wellfleet Rx?
At Wellfleet, we are consistently monitoring the ever-changing landscape of prescription medications to ensure that the most clinically appropriate, and cost-effective, prescription options are available to our members and their healthcare providers.
Manufacturing companies of these biosimilar products have not yet released cost information, which makes a definitive determination on formulary and tiering placement difficult to do.
However, it is expected that these options will be at a lower price point per prescription as compared to their brand counterparts. Upon release of biosimilar products, we intend to carefully scrutinize both the clinical efficacy and cost prior to making any final determinations.
1 FDA.gov (n.d.). Biosimilars review and approval. Retrieved on January 10, 2023, from https://www.fda.gov/drugs/biosimilars/review-and-approval.
2 American Cancer Society. (n.d.). What are biosimilar drugs? Retrieved on January 10, 2023, from https://www.cancer.org/treatment/treatments-and-side-effects/treatment-types/biosimilar-drugs/what-are-biosimilars.html.