The United States has one of the highest health care spends of any developed country. In 2020 alone, that amount grew to $4.1 trillion with prescription spending representing 8.4%. At the same time, with inflation rates remaining at their highest in decades, it’s more critical than ever to help reduce health care system costs.
Per a 2019 analysis, one major aspect of overall prescription drug spending is for biologic medicines, which are produced through a living system and, as a result, may be more complex and expensive to create than small-molecule drugs (derived from chemicals). In 2021, brand biologics and specialty medicines represented only 3% of all US prescriptions, but accounted for a staggering 55% of net drug spending. So how might we curb this massive spend on biologics? To increase competition and potentially lower health care system costs, a more widespread embracing of biosimilars is warranted.
Regulatory policies make way for biosimilars
Congress passed the Biologics Price Competition and Innovation Act 2009, creating a pathway for biosimilars. Highly similar to a reference biologic medicine, biosimilars have no clinically meaningful differences in safety, purity, or potency, and the same rigorous standards set forth by the FDA for testing new batches of reference biologics are the foundation of biosimilar development and manufacturing. But the important difference is that biosimilars have the potential to significantly reduce health care system spending by creating competition in the biologics market.
Right now, we find ourselves at the start of a new era, as 31 biologics are scheduled to come off patent between 2022 and 2027.
Biologics include some of the industry’s most widely-prescribed medications — drugs that represent billions of dollars in sales. Up until now, some reference biologics have been the only treatment option in a given therapeutic area, but companies like Organon are poised to expand available options with biosimilars.
Biosimilar uptake likely to shift market landscape
This is a significant opportunity. Between 2020 and 2030, approximately half of biologic medicines in the US market will face biosimilar competition. As more biosimilars come to market, several things are likely to occur:
- Biosimilar competition may help decrease reference product pricing. Historically, reference brands have lowered prices when faced with competition from lower-priced biosimilars.
- Health care providers will have a wider pool from which to prescribe, potentially increasing access to biologics for patients who may not have previously had coverage.
- Some biosimilars may have differentiating features, which can aid the decision-making process, such as patient access programs and device design.
- Supply chains for these treatments will be more diversified, meaning that multiple biosimilar manufacturers can have the ability to provide stock in case one experiences supply challenges. This means that there are more likely to be alternative choices in the event of supply chain problems.
In addition, the money health care systems can save by using lower cost biosimilars instead of their branded counterparts can be directed toward other pressing medical needs, such as research and development for new treatment options.
Provider and consumer attitudes support biosimilar adoption
Most health care providers surveyed reported being somewhat comfortable with the upcoming shift toward biosimilars. According to a survey of 602 physicians who regularly prescribe biologics to their patients, which was conducted by the National Opinion Research Center at the University of Chicago, almost all physicians (94%) reported comfort (39% somewhat comfortable and 55% very comfortable) with prescribing biosimilars that have been approved by the FDA. Further, 77% of physicians expect to prescribe biosimilars more often in the next 12 months.
In our own omnibus survey of 500 health care providers and 500 consumers, despite having low familiarity with biosimilars (16%), most consumers (57%) say they would be comfortable taking either a biosimilar or a reference brand. Additionally, more than 90% of physicians surveyed believed biosimilars have similar effectiveness and safety to reference brands and had a high level of confidence in the rigorous FDA approval process for biosimilars.
In markets where biosimilars have been embraced, the costs of biologic medications have already declined.
With so many biologic medications expected to come off patent in the near future, this trend should continue. The United States now has more than 20 biosimilars available for patients and by 2025, biosimilars are expected to generate $133 billion in cost savings as biosimilars are poised to continue capturing market share.
This new era of biosimilar competition can make way for additional treatment options and help improve medication access. The decade of biosimilars is here, and it’s time for everyone to understand what they are and the potential value they can bring.
Learn more at OrganonBiosimilars.com.