Will Government Action to Spur the Biosimilars Industry Have Any Bite?

“Biosimilars are such an underutilized entity to truly drive down costs and generate savings. We are heartened by the fact that several pieces of legislation have been introduced to help change provider and patient incentives,” said Molly Burich, MS, Director, Public Policy, Biosimilars and Reimbursement at Boehringer Ingelheim.

A panel at last week’s GRx+Biosims meeting focused its remarks on the potential of legislative proposals brewing on Capitol Hill to incentivize biosimilar uptake.

Incentives for Patients and Doctors

In Medicare Part B, Ms. Burich explained, beneficiaries have a 20% co-insurance, and about 85% will have wraparound or gap insurance that covers this out-of-pocket cost. However, about 15% do not. According to Ms. Burich, removing this co-insurance for biosimilar use through the legislative process would generate sufficient savings through the lower costs of these drugs to fund it.

Molly Burich, MS

“Physicians say that patient out-of-pocket costs,” she noted, “are their number 2 concern.” She also raised the potential of utilizing a shared-savings model to incentivize biosimilar use, such as allowing clinicians who prescribe the lower-cost drug to share in the government’s savings. Legislation containing this provision has not yet been introduced, she emphasized.

Another mechanism to induce greater physician prescribing is to increase the average sales price (ASP) add-on payment, where ASP+8% may incent more physicians to prescribe biosimilars. The current payment of ASP+6% hasn’t encouraged sufficient physicians and groups to move to biosimilars, said Ms. Burich.

What About Part D?

Recognizing that virtually all marketed biosimilars are covered under a medical or Part B benefit, Mr. Burich pointed out that “we should be using this time to prepare the Part D benefit for biosimliars.” Many payers currently manage the use of self-administered injectables under the pharmacy (or Part D) benefit, and when adalimumab biosimilars are available in 2023, payers will need to be ready. She said that a couple of ideas were introduced around the Medicare Star ratings for Medicare Advantage plans, by perhaps alerting beneficiaries of lower-cost products being available on formulary.

Erika Satterwhite

As Erika Satterwhite, Head of Global Biosimilars Policy at Mylan, stated, “The core principal of biosimilars is access.” Yet, patent abuse is the number 1 challenge to bringing new biosimilars to the market. Admittedly, after the flurry of discussions earlier this year about the Federal Trade Commission (FTC) exercising its authority to invalidate anticompetitive patents, there is little activity to change this at the moment. Several current proposals in the Congress and Senate attempt to limit the number of patents for biologics that can be claimed subject to infringement (e.g., 20 in at least one proposal), but these bills, if passed, would only affect new biosimilar applications and companies choosing to participate in the “patent dance.”

James Carey

Even some biotechnology manufacturers are beginning to recognize the inherent problems with patents and access. James Carey, Executive Director, US Health Policy, Merck & Co., Inc, said, “Intellectual property [IP] is the lifeblood of our innovation. However, we have made it clear that we have a strong belief that once the IP has been exhausted, safe and effective biosimilars should be available on the market.” One bill in the House would require more transparency around patents; this would be reflected in a far more useful Purple Book than exists today.

Christine Simmons, Executive Vice President of the Association of Accessible Medicines, and President of the Association’s Biosimilar Council, reminded the audience that the inter partes review system “still remains an important avenue to resolve patent disputes.” Yet, as Mr. Carey pointed out, “The courts are clogged with cases—we need more judges to get through the backlog.” Ms. Simmons believes that we must maintain the ability for the biosimilar and innovator manufacturer to settle, and avoid waiting for the full patent expirations (perceived by the reference manufacturer).

What should be the role of the FTC? Ms. Simmons commented that the FTC has long been active on the biosimilars front. “The agency argued that an exclusivity period for biologics was unnecessary, and the FTC argued that the use of four-letter suffixes would harm their uptake. They’ve been engaged around the misinformation as well. However, much of their participation has been rhetorical. They haven’t had the opportunity to dig in,” she said. The panelists would not comment on FTC’s potential role in considering whether rebates were anticompetitive.

Reference Pricing and Drug Pricing

Ms. Satterwhite asserted that the success of biosimilars in Europe was not the result of an external referencing pricing model. “Implementing tenders in a place that does not use them does not get you to lower pricing,” she said.

Reference pricing, Ms. Satterwhite emphasized, could actually reduce access. “The European Commission has recommended against its use on the continent,” she said. “You need to look at the market context of the country you’re focused on.” Ms. Burich added that in the different EU countries, “many incentives were implemented for physicians and patients,” with the objective of  driving awareness of biosimilars.

Biosimilars in the US have long been viewed as a market-based way of increasing competition and lowering drug prices. The proposals today to negotiate Medicare drug prices for up to 250 drugs (as well as use of reference pricing mechanisms) could have a dramatic adverse impact on the pharmaceutical industry—perhaps up to $1.2 trillion over 10 years. “That means jobs will be lost and products won’t make it to market,” said Mr. Carey. He pointed out that Medicare drugs (in the Part B benefit by Medicare Advantage plans and in the Part D benefit by Part D plans) are negotiated heavily today.

Ms. Satterwhite reemphasized that the key point is sustainability of the biosimilar market in the US. “We need to unlock the barriers to sustainable competition, not just seek a short-term price cut.”

The question remains whether the myriad proposals put forth will enable the federal government to have a greater ability to assure this sustainability. To date, there is a great deal of talk but very little substantive action.

In other biosimilar news…Biogen is taking a more active role in promoting biosimilars in the US market. The Massachusetts-based company has been a principal investor in Samsung Bioepis. In 2018, it increased its investment in the South Korean company (to 50%). On November 6, it announced a deal with Samsung Bioepis to be the commercial marketer for SB11, an investigational ranibizumab biosimilar (reference drug, Lucentis®), and SB15, an investigational aflibercept (Eylea®). The new agreement also covers marketing rights for these products in Australia, Canada, Europe, and Japan. Biogen already markets Samsung biosimilars for etanercept, infliximab, and adalimumab biosimilars in Europe.

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