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Biosimilar uptake: will the US catch up with Europe?

Updated: Jul 29, 2022

Uptake of biosimilars has been much slower in the US compared to Europe. Could recent and upcoming reforms change this?

Europe has been a global pioneer in the biosimilars space. The EMA was the first regulatory authority to establish a regulatory framework for biosimilars and approved its first biosimilar in 2006. Subsequently, another 62 biosimilars referencing 18 different active substances have been approved. However, regulatory approval is not the only market access challenge faced by biosimilars and European payers have helped drive their uptake through various activities. These range from clinically focused activities that seek to demonstrate or communicate the non-inferiority of biosimilars, to leveraging pricing or market access tools such as mandatory discounts, tenders, and financial incentives to support biosimilar uptake and drive cost savings.

The US, however, has lagged behind. It was not until 2009 that the abbreviated Biologics License Application pathway was established, allowing biosimilars to be approved with more limited data sets versus their reference originator biologic. Despite the Biologics Price Competition and Innovation Act (BPCIA) being enacted in 2010, it was not until 2015 that the FDA approved its first biosimilar, Zarxio (filgrastim-sndz). Since then, another 28 biosimilars referencing 9 different active substances have been approved.

Figure 1: Number of biosimilar marketing authorizations approved by the EMA and FDA.

Despite the US gradually catching up with the EMA in terms of the number of biosimilars granted marketing authorization, differences in the pricing, management, and reimbursement of biosimilars appear to have created large disparities in their market uptake between Europe and the US.

A key barrier faced by many US biosimilars is that despite having marketing authorization, patent litigation challenges from originator biologics have meant that they have not yet been able to launch on the US market. For example, all adalimumab biosimilars with FDA marketing authorization are not able to launch in the US until 2023 as per a patent settlement with the originator manufacturer, AbbVie.

Biosimilars that have managed to launch in the US have demonstrated that there are additional barriers to their uptake and limited incentive for US payers to encourage physicians to switch their patients to a biosimilar. These include:

  • Competitive originator contracting: some originator manufacturers have offered significant rebates via confidential contracts to obtain preferential access versus biosimilars. They have strong negotiating power with healthcare plans and PBMs because their existing patient share allows cost savings to be realized instantly.

  • Payer management of high-cost biologics: even if a biosimilar can obtain favorable access versus the originator biologic, it may still have unfavorable access versus therapeutic alternatives via step edits and prior authorizations. For example, a rheumatoid arthritis patient could be required to try methotrexate before they are eligible to be covered for a biologic disease-modifying antirheumatic drug.

  • Ability of payers to refuse coverage: if a healthcare plan already covers the originator biologic, then the biosimilar does not address an unmet clinical need and payers can refuse to cover it if they are not willing to pay the price negotiated by the biosimilar manufacturer.

  • Limited financial incentives to prescribe biosimilars: although the financial disincentive to use lower-cost drugs in Medicare Part B was resolved (biosimilars and their reference biologic are all reimbursed at ASP + 6% using a single billing code) the fact remains that everyone in the system, from drug manufacturers to PBMs and wholesalers, make their money as a share of list prices and higher priced drugs are more profitable.

  • Limited physician and patient experience and confidence with biosimilars: this is not a US specific challenge, and biosimilar uptake across European markets demonstrates that in the absence of educational campaigns that address concerns and promote awareness and acceptance of biosimilars, negative physician perceptions can be a key limiting factor for uptake.

  • Patient affordability: while biosimilars offer the potential for cost savings, substantial discounts have not yet been observed in the US and, consequently, affordability challenges remain for many patients who must pay a proportion of the drug cost via a co-payment or co-insurance.

  • Expansion of the biosimilar category: some categories of products, such as hormones and insulin, are considered biologics in Europe but were not categorized as such by the FDA. This prevented manufacturers of biosimilars versions of these products from attaining marketing authorizations for their products via the aBLA approval route.

Future Outlook

In 2020, US biosimilar market shares began to show an upward trend.

Figure 2: Biosimilar market share development 2016-2020.

There are some recent policy changes that could help drive biosimilar uptake now and in the future:

  • Grassley-Wyden Bill: if passed, part of this bill would incentivize biosimilar uptake in Medicare Part B by increasing the physician add-on payment for biosimilars by 2% for the first five years after their market introduction (i.e., the total reimbursement would be ASP + 8%, rather than ASP + 6%).

  • The S 3466 Bill: if passed, this bill would waive all out-of-pocket expenses for a biosimilar covered under Medicare Part B.

  • Additional Medicare Part D specialty tier: under the final rule, CMS will allow Medicare Part D plans to add a second specialty formulary tier for preferred, lower-cost specialty drugs that carry lower cost-sharing obligations for patients. Accordingly, this will incentivize beneficiaries to select lower-cost versions of a biologic.

  • Interchangeability status: several biosimilars, such as Cyltezo and Semglee, are seeking interchangeability status (a designation meaning that the product “can be expected to produce the same clinical result as the reference product in any given patient”). If approved, this would permit pharmacy level automatic substitution without the need for the pharmacist to consult the prescribing physician and could have a significant impact on physician perceptions of and clinical confidence in biosimilars. The approval of the first interchangeable biosimilar could also prompt further change in biosimilar management. For instance, Medicare have stated that when “interchangeable biological products become available, we would consider whether additional regulatory changes would be warranted.”

  • New utilization management policies: several private payers are taking steps to implement utilization management policies that favor biosimilars. These include the creation of a biosimilar tier with lower out-of-pocket costs for patients, requiring additional justification for use of originator biologics or implementing preferential physician reimbursement rates for biosimilars compared to originator biologics. However, even if formularies prefer biosimilars for new patients, without interchangeability status, payers could permit currently treated patients to remain on the originator biologic.

Perhaps the biggest impact will be seen once certain patent litigations are resolved, allowing a significant number of biosimilars to launch, leading to a dramatic increase in biosimilar competition. This could impact the level of discounting observed for US biosimilars, which to date has been around 9%-24%. However, due to the structure of the US P&MA system it seems unlikely that the 70%-80% discounts seen in some European markets would ever be realized in the US. Accordingly, the most impactful ways to drive biosimilar uptake will likely be through initiatives that focus on addressing physician and patient concerns about biosimilars, improving biosimilar access, and improving the patient affordability of biosimilar medicines.

About RJW&partners

RJW&partners works in the biotech and pharmaceutical sector globally. We provide expert market access advice, including pricing strategy, value proposition development, evidence support planning and payer negotiation training.

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