Category: biosimilar interchangeability

information about FDA regulation specific to its interchangeability designation

Why State Employee Health Plans Should Push Hard for Biosimilar Use

A focus on biosimilars will save individual state employee health plans a conservative average of over $17 million, based on net costs.

A new survey from the Pacific Research Institute found that a greater focus on biosimilar utilization will save individual state employee health plans on average over $17 million each year, based on net costs.

In 2024, the year on which savings calculations were based, adalimumab biosimilars had begun to significantly cut into Humira’s market share, and savings were already being registered in a number of biologic categories, especially the oncology-related therapies.

State employee health plan savings with biosimilars

The study used data from CMS, IQVIA estimates, and a third party’s estimate of nonretail prescription drug expenditures. Based on these three sources, state private health insurance plans spent $20 billion on biologics in 2024. The author, Wayne Winegarden, PhD, Senior Fellow at Pacific Research Institute, confirmed to BR&R that these estimates are based on net prices, not gross costs. He estimates that roughly one-quarter of those expenditures were spent on biosimilars in categories of biologics with biosimilar competition, or a total of 7% of overall biologic expenditures.

State Employee Health Plans Save Big With Biosimilars

The research assumed two different scenarios: (1) biosimilars attain 52% of the biologic volume in categories with biosimilar competition (or 15% of overall biologic expenditures) and (2) 81% within those categories, or 24% of the overall biologic spend.

The author found that across the US, savings ranges from $871 million to $1.8 billion each year. From the analysis of individual states’ public employee health plans, biosimilars will save annually in the range in the from $0.9 million in Wyoming to $88.4 million in California (conservative scenario). In the more aggressive scenario, the biosimilars savings range was $1.8 million in Wyoming and $178.9 million in California.  

Dr. Winegarden concludes, “Due to the savings potential, prioritizing biosimilars in state employee health plans will enhance the fiscal soundness of the state budget while ensuring state employees have access to efficacious treatments. This is an easy win-win outcome that will benefit both taxpayers and state employees.”

In Other Biosimilar News

According to a report in the Korea Biomedical Review, Celltrion was given the FDA interchangeability designation for its rituximab biosimilar product Truxima. This is perplexing for all of the reasons I’ve stated in the past: (1) the drug is not covered under the pharmacy benefit so it is not subject to the sole automatic substitution purpose of the designation and (2) the interchangeability designation does not in any way infer that the product is better than another biosimilar, yet the report noted that “Truxima remains the only rituximab biosimilar officially recognized by the FDA as interchangeable with the reference product, which it believes will provide a competitive advantage through greater physician confidence and market differentiation.” Any suggestion that an interchangeable is better than a conventional biosimilar is false. Rituximab biosimilars were first approved in 2018. How much additional confidence do prescribers need?

This article was written by our Director of Content, Stanton Mehr. Stan has been writing commentary and reporting news about the biosimilar industry since the submission of the first biosimilar 351(k) application to the FDA 13 years ago. Since that time, BR&R has been tracking the US biosimilar marketplace, with the industry’s original, comprehensive and updated biosimilar approval database.

What Have I Got Against the Biosimilar Interchangeability Designation? Much.

The interchangeability designation for biosimilars has been a source of confusion, derision, and even change of philosophy for the FDA. Why is it still with us?

I was asked most recently why on a new biosimilar approval, where the drug was granted the interchangeable designation, I did not report on it as part of the article. This was intentional. I have made the decision that the interchangeability designation is immaterial to a biosimilar’s acceptance by providers, uptake by plans, or both, and am no longer reporting whether the designation has been awarded. This will include use of the designation in our biosimilar database, by the end of this year.

biosimilar interchangeability designation

Over many years, I have written and talked to anyone who might read or listen that the FDA’s interchangeability designation is a confusing, failed attempt to make biosimilars more accessible and to ease their way into the market.

Early on, the misperception gained traction, likely perpetuated by some manufacturers, that a biosimilar subjected to more testing as part of the approval process was actually a better product than a noninterchangeable biosimilar. It’s not a crazy notion; it’s just wrong. One can argue that despite the FDA’s efforts to dispel this idea, it still exists in lesser-informed circles. The fact remains: An interchangeable biosimilar is not more efficacious, safer, or higher quality than another biosimilar. Period.

Interchangeability for Automatic Substitution by the Pharmacy

The original intent in the BPCIA was simple: The biosimilar interchangeability designation was solely to allow automatic substitution by pharmacies of the interchangeable biosimilar for the reference product. Nothing more. Yet, automatic substitution has been employed to increase biosimilar adoption in only a couple of isolated instances. In fact, the FDA itself confused the issue, by applying the designation to some products that were not distributed by pharmacies, most notably ranibizumab biosimilars. The reason for this was never elucidated. I suspect that the manufacturer applied for the designation, and the FDA complied, perhaps thinking this buy-and-bill drug may sometimes be white-bagged through a specialty pharmacy. Let’s just say that it didn’t help the manufacturer, based on its anemic market share. In fact, interchangeable biosimilars have not led the way in uptake for any eligible drug categories.

The FDA itself has indicated that its current philosophy is that all biosimilars that receive approval should be considered interchangeable with the reference product. It just hasn’t codified this into regulation yet. The agency simply removed the requirement for additional switching studies to earn the biosimilar interchangeability designation.

Interchangeability Among Biosimilars

A greater, practical issue remains unaddressed by the FDA: The question of interchangeability with other biosimilars has never progressed. The FDA fell back on the regulatory guidelines, saying that one biosimilar was never tested to be interchangeable with another biosimilar. However, real-life practice by plans and PBMs with changing formularies have freely covered one biosimilar over another, with subsequently modifying their coverages annually, without any reported safety concerns or significant loss of efficacy. In other words, there is no clinical issue when substituting one biosimilar for another, much less for a reference product.

Several initiatives have been introduced to finally erase the biosimilar interchangeability designation or at least to neuter it. The Red Tape Elimination Act is one example, as was expunging it from the budget during the Biden Administration.

If someone in the payer or pharmacy space has actually leveraged the interchangeability designation to improve biosimilar uptake, I’d like to hear about it. Until I hear about a significant case, I’ll refrain from reporting on biosimilar interchangeability, except for its ultimate demise.

This article was written by our Director of Content, Stanton Mehr. Stan has been writing commentary and reporting news about the biosimilar industry since the submission of the first biosimilar 351(k) application to the FDA 13 years ago. Since that time, BR&R has been tracking the US biosimilar marketplace, with the industry’s original, comprehensive and updated database of biosimilar filings with the FDA.