Biosimilars could disappear if the Supreme Court overturns the ACA

With the sense of urgency rightly focused on slowing or stopping the spread of Covid-19, it seems like everything else in the news, and in health care, has come to a grinding halt. Yet important decision-making continues in the background, including some that could have long-lasting effects on health care today and in the future.

One of these is the decision by the U.S. Supreme Court to hear California v. Texas, a case that will decide whether most or all of the Affordable Care Act should be overturned.

The story of how the case got back to the Supreme Court is a long one, but there is an underdiscussed component of the ACA that the court’s decision could affect: the fate of the U.S. biosimilars market, which is key to lowering health care costs. The outcome of the cases could affect biosimilars because embedded within the ACA is the Biologics Price Competition and Innovation Act (BPCIA). This act created a regulatory pathway for biosimilar medicines and marked the beginning of a new era for biologic treatments in the United States.

Biosimilars are FDA-approved versions of existing biologic medicines that are often used to treat complex, chronic conditions like cancer and rheumatoid arthritis. In essence, biosimilars are to biologics what generics are to brand small-molecule medicines.

Biosimilars have demonstrated they can create early and expanded patient access to high quality, cost-effective medicines while also generating savings for the overburdened U.S. health care system. After my company, Sandoz, successfully introduced the first biosimilar to the U.S. market in 2015, it saved the health care system nearly $500 million in less than two years. Biosimilars are gaining traction, with an average market share of 31%, with filgrastim biosimilars having up to 70% of market share compared to their reference medicines. This leaves a lot of opportunity where even incremental increases will lead to savings.

For every treatment with an on-market biosimilar, we are seeing the average selling price of reference medicines decline annually by about 9%. Initial research from Sanford Bernstein also indicates that health care practitioners are making broad yes or no decisions on the use of biosimilars, versus a medicine-by-medicine approach. These successes indicate that things are moving in a positive direction for patients who need access to biologic treatments.

There is also momentum in Congress to create a more balanced and competitive marketplace for biosimilars. The Bolstering Innovative Options to Save Immediately on Medicines (BIOSIM) Act aims to provide a short-term boost to the biosimilars marketplace by ensuring that biosimilars are reimbursed fairly by Medicare Part B. Additional policy approaches being considered would reduce patient cost-sharing in Medicare Part B and Part D when patients use lower-cost biosimilars over more-expensive reference biologics. Measures to reduce the administrative burden for patients and providers who must currently secure a second prior authorization for a biosimilar, even if a prior authorization was already granted for its reference biologic, are also gaining traction.

These are indications that the U.S. is finally starting to recognize the potential of biosimilars. Ten years ago, the BPCIA helped pave the way for the successes we see today. Over the next decade, the launch of new biosimilars will expand treatment options for chronically ill patients and continue to allow greater use of biologic medicines overall.

If the Supreme Court takes the unthinkable step of overturning most — or all — of the ACA, the regulatory pathway for biosimilars would essentially disappear overnight. That would have ramifications for millions of patients who would no longer see more affordable biosimilar versions of high-cost biologic treatments reach the market.

A recent RAND analysis predicted that biosimilar medicines could deliver up to $54 billion in savings to the U.S. health care system by 2027. Approximately $100 billion worth of biologics will have come off-patent between 2013 and the end of 2020, with more coming off-patent in the next three to five years.

Now is not the time to let anything, not even a ruling on California v. Texas, stop that momentum in its tracks. I urge Congress to prepare for the unexpected and mitigate risk by ensuring that the BPCIA can stand on its own. We must protect this independent pathway to fully realize the promise of biosimilars to improve patient care and generate savings for the overburdened U.S. health system.

Carol Lynch is the president of Sandoz U.S. and head of North America for Sandoz Inc.