How to unlock the potential of biosimilars
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Many of the most expensive drugs today are biologic medicines. These treatments have become the standard of care for many devastating and debilitating diseases like cancer and autoimmune disorders. Biosimilars, effective alternative treatment options for expensive biologic medicines, represent a lower-cost solution to treat many of these conditions. Yet, they’re not reaching the hands of patients, despite FDA approval and legislation intended to increase availability.
One example is the Biologics Price Competition and Innovation Act (BPCIA), which was signed into law nearly a decade ago. Supporters hailed it as a major victory for patients in need of biologic medicines. The new regulatory pathway created by this law was expected to significantly increase access to biosimilar medicines and unlock vast savings for patients and the healthcare system. The Congressional Budget Office estimated $25 billion in savings from 2009 to 2018; others forecasted 10-year savings to reach $150 billion. The reality, however, has fallen far short of these grand expectations, and the savings policy-makers envisioned have not been realized.
In 2018, biosimilars represented less than 2% of biologic spending in the U.S., and today the handful of biosimilars on the market have had varying degrees of success. Some biosimilars have reached 40% market share; others languish at less than 5%.
The reason for this is two-fold. First, originator biologic manufacturers often fight to retain market share through practices that shift patients to newer versions of treatment that don’t provide a significant benefit. Second, incentives aren’t always aligned in the U.S. healthcare system to use lower-cost biosimilar medicines.
Systemic disincentives to biosimilar adoption must come to an end. We must unlock the proven power of competition and drive health system savings and increase patient access to more affordable treatment options. Absent a concerted effort to build a healthy biosimilar market, the most expensive drugs will not face meaningful market competition, and patients and the healthcare system will be left with the bill.
The good news is that there are common sense policies that can help remedy these misaligned incentives within our healthcare system today. Importantly, these are solutions that can restore the focus on using lower-priced options without sacrificing the right of providers and patients to make treatment choices that are right for them.
One current policy proposal would allow Medicare Part B providers to share in the savings generated from prescribing lower-priced biosimilar medicines. This type of approach has shown great benefit in global markets, tying together the interests of the payer, the provider and the patient to use the lower-priced biosimilar while retaining treatment choice. For example, hospitals in England have applied this policy for various biosimilars over the last several years. Sharing savings from the use of biosimilars with hospitals as well as payers allows hospitals to reinvest in care improvements, such as hiring additional specialty nurses to support patients.
Encouragingly, bipartisan legislation is being developed that would kickstart the testing of a shared savings approach in the U.S. Allowing providers to share in the savings created by using lower-priced biosimilars would give them the freedom to invest in improving patient care without sacrificing quality, safety or efficacy of the important treatments their patients need. Further, this policy would drive meaningful savings for Medicare, as the program would retain a portion of the savings attributed to prescribing the lower-cost biosimilar.
There is no ‘silver bullet’ that will remove the barriers to biosimilar competition in the U.S. market, but there are steps that can be taken today to build the sustainable system that will drive competition and savings for patients over the next decade. Shared savings is a smart solution to align incentives and reward stakeholders for choosing lower-priced biosimilars without limiting prescriber and patient freedom to use the medicine that’s right for them. It is time to achieve the full potential of biosimilars.
For more information about biosimilars, please visit mylanbetterhealth.com.