Biosimilars Update

Quality and consistency

The manufacturers will need to ensure both high-quality manufacturing and consistency between batches. The good news is that the companies entering the biosimilar market are familiar to the industry and have already established themselves in both of these measures. In February it was announced that Pfizer plans to purchase Hospira for $16 billion. This signals the company's continued push into the market for biosimilar drugs. Hospira already has several biosimilars on the market in Europe.

Evidence of equivalency in efficacy and safety

Back in the 1980s, a firestorm was created when states began to repeal their anti-substitution laws, allowing pharmacists to dispense generic drugs in place of the brand name counterparts. There were numerous detractors who did not believe this practice constituted good medicine and prescribers would never support it. After a short period of reluctance and concern, this practice became the standard.

Now we have biosimilars that represent a new challenge. These are large complex molecules that will need to be duplicated closely to ensure efficacy and safety. The good news is the pharmaceutical companies have been working behind the scenes with the FDA to understand what testing will be required to show interchangeability. The next step will be to present the clinical and pharmacokinetic evidence to prescribers and P&T Committee members to support the claim that these agents will produce the same clinical response and carry the same safety profile as the innovator product.

Cost savings with biosimilars

The manufacturing process for biologics is complicated and expensive. Many in the PBM industry are concerned the discounts companies will offer for their biosimilar will be conservative. If the discounts are in the 15% to 20% range, the innovator companies may simply offer higher rebates in an attempt to squelch the new competition. Several managers at MedImpact have held discussions with manufacturers expressing our concerns that the discounts offered for biosimilars will need to be significant to truly compete and offer any true cost savings to payors. Of course, if the innovator companies offer more substantial rebates on their products to compete with biosimilars, that in itself would lower specialty costs for biologics. The question will be: Can biosimilar manufacturers capture sufficient market share to keep the pipeline full of new biosimilar products? This remains to be seen.

In conclusion, the progress of biosimilar approval will be closely monitored over the next two years so that PBMs and health plans are prepared to analyze the evidence, understand the issues and develop appropriate materials to educate prescribers.

Other Specialty in the News: First Quarter 2015

Hepatitis C treatments

Several PBMs have negotiated significant rebates on hepatitis C medications by going with a one-agent approach. ESI was the first to announce this decision. They preferred Abbvie's new medication, Viekira Pak. Most of the other major PBMs and health plans decided to favor Gilead's Harvoni. MedImpact went this direction as well to take advantage of the better dosing regimen and to gain better rebates on Sovaldi, which will continue to have significant usage.

New treatment for metastatic breast cancer- Ibrance (palbociclib)

Pfizer announced the approval of their new agent to treat certain kinds of metastatic breast cancer. The new drug must be used in combination with letrozole for postmenopausal women with estrogen receptor (ER) positive, HER-2 negative, advanced breast cancer. This new agent is expected to be a blockbuster for Pfizer and the AWP cost is approximately $10,094 for 21 tablets (one-month supply).

New oncology drugs approved over the next decade will improve treatment with a high price tag

IMS reported the outlook for oncology therapies over the next five years. There are 374 cancer drugs in stage 2 and stage 3 trials, according to the IMS Institute for Healthcare Informatics' global outlook report published late last year. Approximately 25% to 30% are immunotherapies. The hope is these new therapies will prolong patients' lives by years, not months. The cost of these agents will be in the range of $150,000 per year and will need to be administered in most cases for as long as the patient lives. Some of the new personalized treatments could carry an even higher price tag. These new agents will require significant clinical review to understand their true value and the cost consequences for payors.