Second Etanercept Biosimilar Receives FDA Approval

Samsung Bioepis scored another biosimilar approval in the US, as the Food and Drug Administration gave its nod to etanercept-ykro on April 25, 2019. Formerly known as SB4, Samsung Bioepis dubbed this agent Eticovo™. It is the second
Enbrel® biosimilar to to receive US approval.
This approval covered all of the reference product’s autoimmune indications, including ankylosing spondylitis, polyarticular juvenile idiopathic arthritis, psoriatic arthritis, plaque psoriasis, and rheumatoid arthritis. Clinical studies were performed in patients with moderate-to-severe rheumatoid arthritis, finding that in combination with methotrexate, Eticovo achieved ACR20 scores that were equivalent to that of Enbrel by week 24 (78.1% vs. 80.3%, respectively). Safety and immunogenicity were also comparable with those of the reference agent.

Eticovo has been approved in the EU and Canada, in addition to other parts of the world, under the brand names Benepali and Brenzys. Samsung Bioepis has not announced a launch date in the US for its biosimilar, and this can be delayed for quite some time. Sandoz’s Erelzi® was approved in 2016, but has not yet reached the market because of patent litigation. Amgen, which manufacturers Enbrel, believes its patents extend effectively into 2028, which would provide for nearly 30 years of product exclusivity.

Both Coherus and Lupin have investigational etanercept biosimilars that are in phase 3 trials. Neither has publicly filed for FDA approval to date.

What Will Cost Savings on 2023 Adalimumab Biosimilars Really Be Worth?

AbbVie executives are sticking to their pledge to restrict annual price increases on Humira® below 10%, but even payer price protections won’t mitigate the increasing expenditures before adalimumab biosimilars hit the market. In 2023, when adalimumab biosimilars become available, the savings biosimilars represent may not be real savings at all.

Pharmaceutical companies generally seek to lock in preferred coverage status for their agents through the use of rebates, which lowers the net costs. Typical in these contracts is a price guarantee, which shields the payer from annual (or more frequent) price increases for the duration of the contract. The contract life is one or two years, after which the health plan, insurer, health system, or pharmacy benefits manager must renegotiate—that means significantly higher costs for each successive contract renewal.

Humira adalimumab

Drug price increases for self-injectable medications like adalimumab, are reported on top of its wholesale acquisition cost (WAC), or the list price. Rebates are applied to WAC pricing. Therefore, if for example, a manufacturer announces 9% price increase to drug X, that applies to the WAC price and does not include consideration of rebates or price guarantees secured by a payer. Rebate information is notoriously difficult to obtain, as payers and pharmaceutical companies consider them proprietary.

However, in a January piece in the New York Times, the author cites research by SSR Health, which concludes that the price of Humira with rebates rose 100% since 2012 to an average of approximately $38,000. Assuming AbbVie executives hold to their price increase pledge, raising their prices by only 6% per year, by 2023 when patent expirations will bring a rash of biosimilars to market, Humira’s price after rebates would have risen 33.8%, to $50,844. If the price is jacked up 9% per year, that would be an increase of 53.9%, to $58,482. This is assuming of course that AbbVie does not increase the rebate at each contract negotiation to offset the higher net cost. To make this dystopian vision complete, let’s not forget that the full savings will not obtained over a population unless all utilization is fully converted to a biosimilar from Humira. That may require an interchangeable biosimilar product (which has not yet been approved) .

As we reported last year, the Institute for Cost-Effectiveness Research established that to meet accepted thresholds for cost-effectiveness, Humira would have to be discounted 55% from its list price. Rises in the cost-effectiveness thresholds (currently $100,000–150,000 per quality-adjusted life-year) would never keep up with this pace of price increases. By 2023, Humira will be even further off the mark in terms of providing value.

The most important point of this, is that the cost savings of the biosimilars that are finally introduced could be an illusion. If a price war in 2023 for newly available adalimumab biosimilars results in 50% discounts, we may have received little but a roll back in costs to those of today. From the perspective of 2018, that’s not savings. That is price stability.

I wrote in 2016 of the same effect for Enbrel®. Because Amgen had taken multiple price increases in the previous years, the WAC cost jumped 37%. And in 2018, no biosimilar is presently marketed for prescription in the United States. The relative discount by Sandoz (presently the sole US company with an approved biosimilar etanercept) needed to actually save payers money for etanercept will not be realistic.

Predicting Coverage Changes in the Psoriasis Field: Will Biosimilars Play a Significant Role?

If you haven’t noticed, there is a good bit of action occurring on the plaque psoriasis treatment front. One long-used anti-TNF drug (Cimzia®) may be nearing approval of its  psoriasis indication, one new interleukin drug was recently approved (brodalumab), and another interleukin inhibitor is being considered by the U.S. Food and Drug Administration for approval later this year (guselkumab).

The general idea that the interleukin inhibitors have superior efficacy to the anti-TNF agents is becoming more accepted, but this is rarely reflected in the formulary preferences of health plans and insurers. Typically, these plans prefer both adalimumab (Humira®) and etanercept (Enbrel®). As with most therapeutic classes, this is the result of marketshare and net cost. AbbVie maintains the number 1 position, meaning that forcing a change or encouraging the use of an alternative preferred product is more difficult—moving significant marketshare to another agent will take considerable resources, and competitors’ pricing may not justify this battle.

Image result for Psoriasis Activity Severity Index

There is evidence that etanercept is not the most efficacious of the anti-TNF inhibitors for the treatment of moderate-to-severe psoriasis, but few health plans manage the autoimmune category by specific indication (other than arming themselves with the usual prior authorization criteria). For instance, it may be a stretch to assume that FDA approval of a new psoriasis indication for a covered biologic will suddenly force plans to change its formulary positioning of the product.

Assuming that the interleukins do represent a better chance for complete resolution of plaque psoriasis symptoms (i.e., PASI 100 vs. PASI 75), albeit at a higher net cost, it means that biosimilars for etanercept or adalimumab won’t change the clinical outlook for patients. For example, a new study announced at this week’s American Association of Dermatology meetings found that Lilly’s interleukin-17A inhibitor ixekizumab (Talz®) beat Janssen’s interleukin-12/23 inhibitor ustekinumab (Stelara®) in a head-to-head trial. The point is that anti-TNFs cannot match this level of efficacy (based on PASI scores): 83% of those treated with the interleukin-17A product achieved PASI 90 scores compared with 59% of those treated with the comparator; 49% of those treated with interleukin-17A achieved PASI 100 scores compared with 23% of those treated with the interleukin-12/23 inhibitor.

Yet health plans have not decided that the clinical benefits of the interleukins outweigh their higher costs, making them preferred products or available as first-line biologic agents. Marketshare and price are the usual sticking points.

Furthermore, the basic problem of biosimilar pricing still remains. In personal correspondence with several health plan pharmacy directors, the 15% discount offered for Pfizer’s Inflectra®, the only biosimilar anti-TNF available, is easily matched by Janssen for its Remicade® originator. Health plans could actually wind up paying more for an aggressive campaign to replace the originator brand with the biosimilar at current pricing.

This will certainly play a role in deciding whether Enbrel® can be knocked off its preferred positioning perch. With billions of dollars in annual revenue at stake, Amgen will surely take measures to match any modest discount from Sandoz on biosimilar etanercept (or at least get closer to that net-cost neighborhood with increased rebates). This may well be all that is needed to discourage biosimilar uptake on drug formularies.

Frustration Mounts as Sandoz’s Etanercept Biosimilar Launch Delayed into 2018

Call it irritation, exasperation, or frustration, but biosimilar manufacturers and payers alike are feeling it, as the fight over drug patents has barred the way to approval for yet another biosimilar for a costly biologic.

In this case, Sandoz’s Erelzi™, which was approved by the Food and Drug Administration on August 30, 2016, has been caught in the patent litigation web. The originator drug, Amgen’s Enbrel® was first approved in 1998. Amgen asserts that its patent on the agent protects exclusivity until 2029, which would give Amgen 31 years of sole marketing rights. Despite the unlikely event that it can defend its patent for this extraordinary period, Sandoz has acknowledged that it will need to hold off launch of the biosimilar until at least 2018.

In a report from Reuters on January 25, Richard Francis, CEO of Sandoz, stated that the legal battle “won’t really reach a conclusion until 2018. That’s the frustration sometimes of the legal situation, but the way I look at that, we’re carving the landscape out as we go.”

Indeed, Sandoz has been at launch-delaythe forefront of legal battles, also fighting Amgen on the validity of the 180-day notification period, which is now being readied for US Supreme Court arguments in the Spring. The 180-day notification period for Erelzi was due to end in
late February 2017. After this time, Sandoz may still launch the product, at risk of financial penalties and loss of revenues, if the courts rule that Amgen’s remaining patent is valid.

However, the potential for savings on Enbrel, through biosimilar competition, continues to be a mirage for payers. The agent, which pulled in US revenues of $5 billion in 2015, has been the subject of numerous recent price increases. Health plans and insurers, while believing these costs untenable, may have little choice but to pay up or find ways to more aggressively restrict access.

A Modified View of Price Behavior in the anti-TNF Category

A couple of undercurrents are apparent in the payer market when it comes to biosimilar competition. A project that I worked on recently through the Health Payer Council revealed how the thinking of pharmacy and medical directors has evolved in the last few months.

Web image 2I was reminded that in the early days of anti-TNF drugs, series of price increases were fairly common. And this gets to an important point: the introductions of a new anti-TNF biologic did little, if anything, to blunt the effects of new price increases. Why then should I expect that to be the case with biosimilar introductions?

I wrote in February that pharmaceutical companies often raise their prices when new generic competition is anticipated, in an effort to optimize revenue before the insurers and health plans inevitably switch to generic coverage. And these revenue hikes can be eye opening and frequent. For example, the Elsevier Gold Standard Drug told us that Amgen has been hiking the price of Enbrel impressively over the 18 months: 4 hikes at an average of 8%, for a cumulative price jump of 36.7%. I said at the time that perhaps payers can expect the introductions of the first anti-TNF biosimilars to guard against this sort of price-hiking behavior by the manufacturers of innovators—this would be the quickest way to expand the spread in pricing and persuade managed care organizations to move as quickly as possible to the biosimilars.

My most recent input from payers indicates that they are less concerned about this behavior, because they actually apply only to wholesale acquistion cost or average wholesale prices. In other words, price jumps like these will not affect contracted pricing to much extent, especially in contracts with price guarantees.

Now we are nearing a situation in which biosimilars for Enbrel®, Humira®, and Remicade® may all be on the market before mid-year 2017. Price competition for the anti-TNF inhibitors may well be on the contracted business, and it is distinctly possible that WAC prices may continue to rise. “Once biosimilars are on the market, the fight will be over net price and the ability of biosimilars to shift market share away from brands.  At that point, brands are likely to step up their rebating gains to try and outflank the biosimilars,” said one pharmacy director.

Something else that may affect competition is the question among the anti-TNF brands. Of course, some are infusibles and others are self-injectable, which could discourage switching. More importantly, perhaps, is the payer’s suggestion that if a prescriber’s go-to choice of Humira, for example, doesn’t provide the expected benefit, that physician is more likely to move to a therapy with a different mechanism of action—not another TNF inhibitor.