Biosimilars and Shared-Savings Programs

Shared-savings programs have been used by the Centers for Medicare and Medicaid Innovation (CMMI) to leverage financial incentives for providers into lower costs for Medicare. In the last 2 months, this idea has been floated to improve access to biosimilars–a biosimilar shared-savings program for Medicare Part B.

There is ample evidence that biosimilars in general are less expensive than their reference products. The introduction of a biosimilar agent end the price hikes associated with unopposed reference biologics. In addition, Bernstein Research demonstrated convincingly that biosimilars lower the average sales price of reference agents in their category by around 12% per year. After a couple of years on the market, the costs in the category are lowered substantially.

Lower prices are the objective—a partial objective anyway. Greater utilization at those lower prices will result in the real savings. Gaining that utilization by providers and coverage of the payers continues to be a concern, although many inroads are being made in those areas. One way of addressing this issue is to lower patients’ out-of-pocket cost for biosimilars relative to the innovator product. Another approach is to incentivize physicians financially to prescribe them over the reference biologic. A “shared-savings” approach has been recently raised to increase physicians’ incentives to prescribe biosimilars.

I understand how existing shared savings programs work in Medicare and how other value-based reimbursement models generally function in health care, but I’m still trying to figure out how this may apply to biosimilar utilization. Alex Brill, of Matrix Global Advisors and the American Enterprise Institute, published a white paper on how a biosimilar shared savings concept might work for Medicare Part B. A legislative proposal was introduced by Senators John Cornyn (R-TX) and Michael Bennet (D-CO) on July 1. Entitled the Increasing Access to Biosimilars Act of 2020, it relies heavily on shared-savings principles, though the full text of the bill was not yet available for viewing at the time this article was written.

Alex Brill biosimilar shared-savings programs
Alex Brill

Mr. Brill emphasizes in his white paper these principles must be kept simple in order for it to be accepted by e (and by providers). The Biosimilar Forum is fully on board with that idea, sponsoring the white paper and being mentioned in Senator Cornyn’s press release. I’m struggling with the idea. I guess I’m just a little thick.

A Shared-Savings Model on Top of Another One?

Currently, 14 of the 17 biosimilars marketed in the US are indicated primarily for cancer treatment (direct and supportive). Medicare’s Oncology Care Model is an ongoing value-based demonstration project (set to end in 2021) that focuses on the episode-of-care payment to practices for each patient receiving cancer care. It also relies on shared savings, offering performance bonuses for those practices that save money overall. This applies to the total cost of oncology care, not one component of it. One might expect that use of lowest cost medication would contribute towards low provider costs, giving the practice or medical group the best chance for receiving the savings bonus.

Limiting a shared-savings initiative to specific drug treatment within a disease state may seem overly complex and even counterintuitive. Does this narrow application actually make it easier to track and award bonuses? I’m not sure.

Beyond the oncology space, only infliximab and epoetin biosimilars remain (not counting rituximab, which could potentially be used for oncology and autoimmune indications). Considering the various physicians who might be prescribing infliximab, including rheumatologists, gastroenterologists, dermatologists, these agents are a singular, but significant, portions of their practice if they continue to purchase them on a buy-and-bill basis. Would they be interested in a shared savings program based on a singular drug?

Medicare Part B reimburses physicians for the use of individual pharmaceuticals based on the reference product’s average sales price (ASP). Payment is ASP plus 6%, for instance, whether a reference or biosimilar is administered. Essentially, it places these agents at parity; it does not advantage the biosimilar. It does improve upon earlier methodology, which gave a distinct reimbursement advantage to the reference product.  

Strength in Numbers

Differential cost sharing for biosimilars versus innovator products could be offered by payers, but this is not widespread because (1) there are still relatively few biosimilars available to justify a big policy change and (2) the currently marketed biosimilars are generally covered under the medical benefit. Under the pharmacy benefit (i.e., Part D), different copay tiers are well accepted, and it would be relatively easy to start a “biosimilar-only” tier. A few commercial payers prefer the use of biosimilars, but a larger share simply offer biosimilars on a level playing field, which leaves the decision up to the physician and patient.

Not knowing the exact content of the legislative proposal, I hesitate to hazard a guess as to its individual steps. Judging from the positive response from the Biosimilars Forum, it may contain elements outlined in the Brill paper. In either case, the challenges of implementing such a model will be:

  • Creating a meaningful savings that will prompt quick action from physician groups and health systems
  • Encouraging payers (i.e., Medicare Advantage plans) to get on board—think buy-and-bill versus specialty pharmacy
  • Offering patients financial incentives as well as provider benefits
  • Avoiding confusion with the goals and methods of the oncology care model (even if this demonstration project does not become permanent)
  • Being extremely easy to administer for payers and Medicare fiscal intermediaries as well as easy to monitor for physician groups

The problem of taking advantage of the lower health expenditures afforded by the presence of biosimilars remains. New ideas for improving biosimilar access and utilization will always be welcome. Making them work is another matter.

Bevacizumab Biosimilar Launch and Development Still a Risky Proposition

Multiple biosimilars may have launched in a particular category, but this does not lessen the financial risk of a biosimilar manufacturer who has not settled (or cleared) their patent litigation. The recent filing by Genentech against Samsung Bioepis’ proposed Avastin® biosimilar, SB8, serves as a reminder.

The June 28th filing of Genentech v. Samsung Bioepis, which was reported by Big Molecule Watch. Genentech alleges that Samsung Bioepis is violating 14 different patents and failed to follow notification protocols as mandated in the BPCIA legislation, which established the biosimilar approval pathway.

Genentech had filed suit against Amgen (makers of Mvasi®) in October 2017, and although this litigation is unresolved, Amgen launched the biosimilar last summer. Genentech had also filed suit against Pfizer (makers of Zirabev®), but the parties reached a settlement September 19, 2019, clearing the way for a Pfizer launch in January 2020.

These patent litigations, including the newest involving Samsung Bioepis’ bevacizumab biosimilar, are not very interesting, except that there are at least seven biosimilars in development for this drug category. Samsung’s 351(k) application was accepted by the Food and Drug Administration in November 2019, with a decision expected in Q4 2020. However, partners Mylan and Biocon have also filed an application for their own Avastin biosimilar (MYL-1402O) just a month later.

No doubt, Genentech is committed to defending its intellectual property. Yet, does it intend to file suit against each developer, especially as its Avastin US marketshare drops precipitously (35% loss in marketshare since Mvasi’s introduction less than a year ago)? It seems apparent that Genentech is fighting a losing battle against a tide of manufacturers, and perhaps seeks little more than royalties or licensing fees from the upcoming challengers. This seems to be the case with Abbvie in its settlements with biosimilar producers of adalimumab. We’ll know more if Genentech announces a new suit against Mylan or Biocon involving MYL-1402O, which may also launch in the fourth quarter of this year if approved.  

Don’t expect safety in numbers, in any case. Amgen still faces significant uncertainty with its at-risk launch last year. A jury trial is supposed to begin in November 2020. If the jury rules in Genentech’s favor, the profits from Mvasi in addition to punitive damages could be awarded by the judge.

Biosimilar Etanercept: Amgen’s Victory in Federal Appeals Court Further Delays Launch

On July 1, a US Appeals Court sided with Amgen, maker of Enbrel®, in patent litigation against biosimilar maker Sandoz. This is a source of continuing frustration for payers, health systems, and perhaps most of all, patients. Will this product be effectively shielded from competition for 31 years?

Sandoz’s Erelzi® was approved in 2016, but has not been available to the US market. Samsung Bioepis’ Eticovo® received approval from the FDA in 2019 and likewise is not yet launched. As reported previously, etanercept was first approved in the US in 1998, one of the first biologic response modifiers approved for autoimmune indications. Amgen believes that Enbrel should be protected from biosimilar competition until its final patents expire in 2029. Both etanercept biosimilar agents have launched in Europe, where in 2019, Samsung’s sales reached $486 million.

US sales of Enbrel in 2019 was approximately $5 billion, up from $4.8 billion in 2018. Enbrel generates Amgen’s greatest revenue today.  

In January 2017, Sandoz CEO Richard Francis thought that the legal battle would last no later than 2018. In 2017, that seemed a very long time. From 2020’s perspective, that was about $15 billion ago. Assuming an average of $5 billion per year in US sales, Amgen could rack up another $40 billion between 2021 and 2028 on Enbrel alone. The missed opportunity for savings is truly staggering (both in terms of lower biosimilar costs and avoided price increases).

In its press release on Amgen’s victory in the federal appeals court, Sandoz stated that it is evaluating all of its options, which may include an appeal to the US Supreme Court. Carol Lynch, President of Sandoz US, stated, “Our company respects valid intellectual property; however, Sandoz continues to believe the patents asserted by Amgen are not valid, and that it should not be able to use them to extend the drug’s exclusivity.”

Whether this case should be decided by the US Supreme Court is a separate question. This is an area where the Federal Trade Commission (FTC) might want to step forward and exert some authority. If this patent litigation is not anticompetitive in nature, I’m not sure what is. I’ve said it before: 31 years of marketing exclusivity flies in the face of reason.

Sandoz may be forced into the position of settling with Amgen (if Amgen wants to settle). Abbvie was well rewarded for its litigation efforts with adalimumab, resulting in licensing or royalty payments with eight biosimilar makers, and continued exclusivity through 2022. Ironically, Amgen was the first biosimilar maker to settle for an “early” adalimumab launch date in 2023.

This was not intended when the Obama administration signed the BPCIA into law, and Amgen knows well that every day it avoids competition is just icing on the revenue cake. Even if the suit was dismissed today by the Supreme Court, the marketing exclusivity period enjoyed by Amgen far surpassed the 12 years afforded by the BPCIA.

This may also be affecting company plans to offer additional etanercept biosimilars in the future. Although Coherus Biosciences still lists an investigational agent as completed phase 3 studies, it had finished them in 2017. There seems to be no rush in applying for FDA approval. Judging on the etanercept patent landscape for Sandoz, who can blame them?

COVID-19 Pandemic Is not Necessarily an Opportunity for Biosimilars

Will biosimilar manufacturers and patient access somehow benefit from the COVID-19 pandemic? I am having some trouble following the logic of those who believe it will. If people who cannot afford their medications when economic conditions decline, they may not be in a better situation to afford biosimilar versions of biologic medications, especially if their insurers don’t dramatically lower cost sharing for these biosimilars.

Bernstein Research

Payers who do want to lower patient cost sharing may be struggling to achieve this based on pharmaceutical contracts that are currently in force. In other words, they may not be able to rapidly lower coinsurance for biosimilars if the reference agent is guaranteed preferred access.

On the other hand, there is some evidence that biosimilar utilization has actually taken a hit during the COVID-19 pandemic. The most recent report from Bernstein Research shows this to be the case in one biosimilar drug category, and the logic behind this trend is easy to understand.

The COVID-19 Effect

With three marketed biosimilars (and another only recently approved) and two reference product formulations, pegfilgrastim is an extremely competitive drug category. One can even add the short-acting products (filgrastim) to the market basket to further complicate the picture. Out of this busy dynamic, a few trends have been obvious (and reported on):

  • Coherus Bioscience’s Udenyca® has been steadily gaining marketshare
  • Amgen’s reference product Neulasta® (the original syringe form) has been steadily losing marketshare
  • Utilization of Neulasta’s OnPro® on-body injector (the dominant player at > 55%) has been relatively steady
  • The other biosimilar products (Fulphila® and Ziextenzo®) have not yet gathered momentum

Bernstein’s analysts do note that oncology utilization overall has contracted somewhat with the onset of the COVID-19 pandemic. Therefore, these figures should be considered in the context of less oncology drug use across categories.  

However, as recently as January 2020, Coherus reported that Udenyca’s US marketshare climbed to above 20%, and Bernstein Research’s analysis show that this reached 22% in March in the pegfilgrastim category. Something happened to the April figures, however, which gave the analysts pause. Udenyca’s momentum stopped dead. It lost two percentage points in terms of share, a 10% drop in one month, whereas Neulasta OnPro gained more than 3.5 percentage points, a 7% increase. Use of the other biosimilars remained the same or fell slightly, and utilization of Neulasta syringes continued its decreasing trend unabated.

This does make sense if viewed from the perspective of patient care in the COVID-19 pandemic environment. People do not want to visit health facilities or physician offices unnecessarily. Patients who are undergoing chemotherapy for the treatment of cancer are immunocompromised and at high risk.

The use of an on-body injector allows patients undergoing chemotherapy to skip at least a couple of in-person visits to the infusion center without exposing them to higher risks of neutropenia and infection. Therefore, use of on-body injector technology seems to be a reasonable choice. Unfortunately, pegfilgrastim biosimilars are only available for administration by syringe at this time.

Whether this becomes a longer-term trend may well depend on the duration of the pandemic crisis. The market penetration data released by Bernstein Research does not yet capture May or June figures, and the release of the newer data should help validate or debunk this theory. It does potentially represent how an unusual factor can affect biosimilar uptake trends.

Amgen Settles With Alexion on Soliris Biosimilar, Dropping Litigation and Getting a Release Date

As reported by several sources, Amgen and eculizumab maker Alexion Pharmaceuticals have come to an agreement on patent disputes that will allow Amgen to begin marketing a biosimilar version of Soliris® in 2025.

Soliris biosimilar news
Eculizumab biosimilar marketing may begin in 2025

Amgen has been developing ABP 959 for some time, and a phase 3 clinical trial in patients with paroxysmal nocturnal hemoglobinuria (PNH) is underway. The estimated completion date of this 18-month study is March 2022.

On May 29, Alexion Pharmaceuticals notified the US Securities and Exchange Commission that it settled with Amgen. Amgen filed a motion on June 1 that terminated the inter partes review (IPR) process, which disputed three Alexion patents. Big Molecule Watch reported that the initial hearing on the three IPRs was scheduled for June 1, which may have prompted the settlement. The three patents at issue were to expire in 2027.

The settlement itself is confidential, but it is nonexclusive and provides for royalty-free use of the patents. It clears the way for Amgen to produce and market its eculizumab biosimilar in the United States (pending Food and Drug Administration approval of ABP 959) on March 1, 2025.

Eculizumab is an interesting target for biosimilar development, in that it treats rare diseases. One of its primary indications, PNH, is a very rare disorder, affecting only up to five people per million population. Its other indications include atypical hemolytic uremic syndrome, myasthenia gravis, and neuromyelitis optica spectrum disorder. In 2018, Alexion introduced a follow-on drug, Ultomiris®, which is a meant to be given every eight weeks, as opposed to every two weeks in patients with PNH. The company reported that the majority of patients who were taking Soliris for PNH have been converted to the newer agent.

For the first quarter of 2020, Alexion stated that Soliris sales were slightly more than $1 billion (6% higher than Q1 2019). In comparison, Ultomiris, which does not have the full set of indications that Solirisdoes, earned $223 million for the same quarter and was growing rapidly since its introduction. Without a biosimilar appearing until 2025, the question remains as to whether payers will get on board with the conversion to the follow-on agent.

New Entrant into Insulin Market Wants to File as Biosimilar in 2022

Lannett, a maker of generic pharmaceutical products, disclosed that it has been in talks with the Food and Drug Administration (FDA) about bringing a biosimilar version of insulin glargine into clinical trials.

March 22, 2020 marked the transition of new insulin agents from being considered a 351(a) biologic to a 351(k) biosimilar. Few manufacturers have publicly announced their intention to introduce biosimilar insulins. In fact, the most recent FDA decision on an insulin glargine agent was for Mylan and Biocon’s follow-on version, approved under the 505(b)2 pathway (under the 351[a] regulations).

Sanofi Lantus Insulin Glargine Pen

According to Lannett, the company had a type II biosimilar biological product development meeting with the FDA last week. Tim Crew, Chief Executive Officer of Lannett reported that “FDA provided positive feedback on the clinical and [chemistry, manufacturing, and controls] advancement of our biosimilar insulin glargine that was consistent with our expectations. Our path forward is clear with regard to what is expected in the planned 351(k) biosimilar application, which we anticipate will be filed in calendar year 2022. We will work with our strategic partner to complete all the necessary development activity, including human clinical trials, in accordance with FDA’s guidance.”

This biosimilar news release does have some missing interesting information. In December 2019, Lannett announced phase 1 clinical trial results, “with its strategic partner, the HEC Group of Companies.” Based on a Web search, the “HEC Group of Companies” seems to be a corporate recruitment firm. Another company, named the “H.E.C. Group Corporation” seems to be based in Osaka, Japan, and lists pharmaceutical development as one of its capabilities. Finally, a third company, located in China, is called “HEC Pharm,” and it is a distinct possibility. HEC Pharm does specify on its website that it has produced the active ingredient in insulin glargine.

Though not listed in the clinicaltrials.gov database, Lannett described the phase 1 trial as a single center, single-dose, double-blind, randomized, two-period crossover study comprising 27 healthy volunteers. Lannett claimed in its press release that the study met its objectives, comparing the pharmacokinetics and pharmacodynamics of this biosimilar candidate with US-licensed Lantus®, after a single subcutaneous dose. 

Lannett has not disclosed what additional trials FDA believes will be needed to complete the submission package. However, based on an estimated submission date of late 2022, one may assume that additional human studies will be needed.  

Mylan/Biocon’s Insulin Drug Saga Ends With an Approval

Although Mylan and partner Biocon did not beat the March 22, 2020 deadline for the transition of new insulins to biosimilar status, they were able to secure a 505(b)2 FDA approval for their insulin glargine follow-on agent.

On June 11, the partners announced receiving FDA approval for Semglee™. Technically, Semglee has the same amino acid sequence, and provides outcomes that are not significantly different than that for Sanofi’s originator agent Lantus®. However, insulins were not subject to the biosimilar approval pathway until the designated transition date of March 22, 2020 (which was extended in the case of Mylan and Biocon’s product through legislative action). The second FDA decision in September 2019 resulted in a complete response letter related to plant deficiencies. An initial FDA decision in 2018 also did not result in licensing authorization.

Extending the deadline spared the partners having to reapply for approval under the 351(k) biosimilar pathway, citing Lantus as the reference agent. This would have delayed another FDA decision by perhaps 18 months or more. The other US marketed insulin follow-on products—Basaglar® and Admelog®—were approved like Semglee, under the 351(a) pathway. Whereas Basaglar is a glargine follow-on product, Admelog is a lispro follow-on agent.

Semglee approval Rajiv Malek
Rajiv Malek, President of Mylan

The approval was supported by two phase 3 studies (INSTRIDE-1 and INSTRIDE-2), which demonstrated that Semglee had no significant differences in terms of safety, efficacy, and immunogenicity compared with Lantus.

In the press release, Mylan President Rajiv Malik stated, “Today’s milestone makes Mylan the first company to have approvals on both the vial and pen presentations of insulin glargine treatment options to Lantus.” 

Pfizer’s Pegfilgrastim Biosimilar Approved by the FDA

The ranks of the pegfilgrastim biosimilar competition is filling out, with the latest approval by the Food and Drug Administration. Pfizer announced the approval of its product Nyvepria™ on June 11.

Officially designated pegfilgrastim-apgf, Pfizer has not yet announced a launch date for this agent. However, in its press release, Andy Schmeltz, Global President, Pfizer Oncology, stated, “We look forward to making Nyvepria available to US patients and physicians later this year.” The company submitted its 351(k) application for the agent in the third quarter of 2019.

Pfizer pegfilgrastim biosimilar

The indications for use of Nyvepria mirror those for the other pegfilgrastim biosimilars. In addition, the adverse events listed in the prescribing information are essentially those of other pegfilgrastim competitors.

The 27th biosimilar approval, Nyvepria is the fourth pegfilgrastim biosimilar to receive the FDA’s nod. Another agent, developed by Fresenius Kabi, is not expected to receive an FDA decision until the second quarter of 2021. Nyvepria was a legacy product from Pfizer’s acquisition of Hospira, and originally designated HSP-130 (but changed to PF-06881854).

Pfizer’s pegfilgrastim biosimilar submission application included a package of data derived from its analytical and characterization research as well from two phase 1 studies in healthy volunteers, which helped to establish the similarity of this agent to the reference agent. [A clarification to this story was posted 6/18: Additionally, an open-label phase 1/2 study was conducted with HSP-130 in patients with nonmetastatic breast cancer, which also tested the pharmacokinetics and pharmacodynamics of the agent. This trial did not compared the results with those of a reference product]. 

Nyvepria is the ninth FDA-approved biosimilar in Pfizer’s portfolio (including two versions of infliximab: Inflectra®, which it markets for Celltrion, and Infixi®, which is not marketed in the US).

Budget Impact Modeling: Good Information but Don’t Take Them Literally

At the recent virtual conference of the International Society of Pharmacoeconomic and Outcomes Research, two budget impact models were presented in an effort to demonstrate potentially sizable benefits of biosimilar coverage by health plans. The studies were supported by Pfizer, manufacturer of the two biosimilars in question (Zirabev® and Ruxience®). Both were authored by the same research team, using similar assumptions.

In the bevacizumab study, the research team stated that a 10 million member plan could save more than $14.7 million cumulatively by year 3. For the plan, that translates to $0.12 per member per month or $20,791 per patient per year. This assumes a transition from 23% biosimilar utilization in year 1 to 70% biosimilar utilization in year 3 across bevacizumab indications. They also assume a steady 20% difference in net costs.

I don’t doubt the accuracy of the estimates, but the devil is usually in the assumptions, which is where potential savings often become narrower or less likely to occur in real life. To the authors’ credit, they did include a sensitivity analysis, calculating savings from 15% discounts to upwards of 40%. The problem is that the present net cost difference, based on Avastin®’s average sales price, and Pfizer’s stated wholesale acquisition cost at launch in January, is only 12%. Like in the budget impact analysis, this doesn’t include the existence of any rebates by either Pfizer or Roche (the maker of the reference product). At a 15% net cost difference, the authors estimate savings with the one biosimilar to be $11.0 million—still a significant amount over 3 years. After only 1 year, this savings would be $2.6 million.

On the hopeful side, when plans do decide to cover biosimilars, they often charge forward to gain greater biosimilar market share rapidly. Kaiser Permanente, for instance, switched utilization of bevacizumab biosimilars (prior to Zirabev’s launch) over almost all of their population within only 1 month in 2019. And when this type of switch occurs, you can bet that the rebates provided by the biosimilar manufacturer will create a net cost difference of greater than 15% or 20%.

With all of this considered, the best guidance a budget impact model can provide is directional. That said, the common refrain from payers has been “I’ve never seen a pharma-sponsored budget impact study where the company’s drug didn’t save money!” Manufacturers are almost expected to provide them though, and this type of modeling can describe under what conditions savings might accrue. However, your actual experience will almost never reflect these conditions!

The Botox® Cure: Biosimilar OnabotulinumtoxinA Development Moves Ahead

A joint press release from Mylan and Revance issued on June 1, 2020 stated that progress is being made on characterizing a proposed Botox biosimilar. As a result, Mylan has agreed that the onabotulinumtoxinA biosimilar development program should proceed.

According to the press release, the partners engaged the Food and Drug Administration to discuss the possibility of an onabotulinumtoxinA biosimilar in early 2019. Based on the positive results of that meeting, Mylan and Revance took their analytical and characterization program to the next level, which would await Mylan’s decision to proceed. Specific developmental milestones have been passed, and Mylan has paid Revance based on its existing agreement.

A fascinating aspect of this biosimilar news is that Revance has been focused on a novel botulinum toxin A agent called daxibotulinumtoxinA, which has undergone more than a dozen studies for primarily cosmetic uses. The development of a biosimilar version of Botox could compete directly with this follow-on agent. Revance had filed for 351(a) approval from the FDA drug in February 2020 for daxibotulinumtoxinA.

Not only is Allergan’s Botox indicated for cosmetic uses, but this reference agent is approved for use in muscle spasticity, migraine prevention, overactive bladder, and other disorders (several of which are potential targets of daxibotulinumtoxinA).

In other biosimilar news… Fresenius Kabi announced its first FDA-accepted 351(k) submission—for MSB11455, a version of pegfilgrastim. It is likely the application package includes data from two phase 1 clinical trials (in healthy subjects) to test the safety and pharmacokinetics/pharmacodynamics of MSB11455. Based on a May 27 submission date, Frenenius Kabi should expect an FDA decision in Q2 2021.