Biosimilars: Patents, policy, and reimbursement
By Sean McGowan; Steve Miller; David Senior |
In the inaugural episode of the AmerisourceBergen Insights podcast, we’re looking at the biosimilars market with Sean McGowan, Senior Director of Biosimilars at AmerisourceBergen. Sean will be joined by David Senior and Steve Miller to discuss the policy and reimbursement issues that impact our customers and the overall growth of biosimilars. These three experts will look at how different policy issues can slow market growth and offer actionable guidance for providers on how to confront reimbursement-related challenges.
Welcome to the AmerisourceBergen Insights podcast. I'm Jennifer Kemper, director of content strategy at AmerisourceBergen and your host for this exciting new podcast where we'll talk to healthcare industry experts about the issues that matter most to pharmaceutical manufacturers, healthcare providers and our partners in moving medicine forward. Today, we're looking at the biosimilars market. We're joined by Sean McGowan, senior director of biosimilars at AmerisourceBergen. Sean will be talking to a couple of AmerisourceBergen's market economics and health systems experts on the policy and reimbursement issues that impact our customers and the overall growth of biosimilars. These products promise significant cost savings to the healthcare system, but only if they are accessible and utilized. Sean, welcome. Before you introduce our other guests for today, perhaps you could give us an overview of what you see as the biggest policy and reimbursement issues impacting the growth of the biosimilar market today.
Thanks Jennifer. I'm excited to join you today and discuss some of the biggest issues impacting the biosimilar market in the US. Before we dive into these topics, I'd like to bring our listeners up to speed on where the biosimilar market is in the US today. The biosimilars market in the US just celebrated its five year anniversary. It was five years ago in September when Sandoz launched the first biosimilar product ZARXIO in the US market. To date, the FDA has approved 28 biosimilar products and 18 of those products have launched in the US. These 18 biosimilar products compete in three broad pharmaceutical categories: supportive care, oncology and anti-TNF, where seven innovative products have biosimilars that have been approved and launched in reference to these innovative products.
Now that we've provided an update on the biosimilar market in the US, we can talk about the three broad topics that are impacting the adoption and growth of biosimilars in the US. First, we can talk about the overall rebating system that exists, not just for biosimilars but for other categories of products, where payers are able to create formularies and then force or mandate clinicians, hospital, health systems or other downstream customers into utilizing or adopting one product versus another regardless if one of the products is cheaper than the other.
Second, from a litigation standpoint and the defense strategies used by innovator companies to defend the existing patents of the innovator products and how these innovator companies and organizations push off launches or delay launches to create settlement dates for launches of biosimilars into the US which inevitably adds expense to the overall system when cheaper options are not available. Looking at the Humira market, Humira, being the largest grossing pharmaceutical product not only in the US but in the world, and how AbbVie has been very successful in basically controlling when the approved biosimilar products are going to launch in the US, which happens in 2023. We'll see at least five, maybe six Humira biosimilars launch during that calendar year of 2023.
The second example we can look at is how Johnson and Johnson has been successful in stifling the market share and adoption of biosimilars with biosimilar products that have launched in the US. Looking at the infliximab market as a whole and with now three products in that market, three biosimilar products competing with the innovator, we're seeing the innovator Remicade still holding onto about 85% market share. Their defense is basically customer contracting, a rebating type of strategy. Basically a pay to block out or pay to deny the biosimilars that access. I think that's going to change in the next year or two, just given that there are some overarching options in the market.
I also look at the example of Enbrel and the recent litigation decision that has advantaged Amgen, where essentially we won't see a biosimilar product on the market referencing Enbrel in the US until 2027 or 2028, based on their successful patent defense of that product, which is the second highest grossing pharmaceutical product in the US and around the world. They happen to be in that anti-TNF, multiple indications, et cetera, et cetera.
Then third, there's the idea around interchangeability. This is an American born concept of biosimilars that there needs to be an additional designation where a product can be switched out for another biologic without having to go through the prior authorization or layers of getting approval from a physician to do that, where this is the only market in the world that really, that concept of interchangeability exists.
Those are the top reoccurring issues. To help unpack these issues, I'm joined by a couple of AmerisourceBergen colleagues and experts. David Senior is the senior vice president of market economics at AmerisourceBergen and Steve Miller leads the healthcare systems and specialty services commercial deal strategy. David, I'm interested in your perspective on how these policy and reimbursement issues could impact the larger healthcare market.
Thank you, Sean. This has been an interesting year for the biosimilars market, as you mentioned. Biosimilars started five years ago, were introduced into the US market five years ago and there were a lot of questions for the last four years -- where this market was going to go and whether there would be success in introduction of biosimilars. And what we've seen in particular in the past two years is some success. It hasn't been across the board in all categories, hasn't been in each class of trade, but we have seen areas of substantial success. And what we see as it's played out is the importance of reimbursement. That's, I guess, some of the overarching pieces, but I think where we are seeing the most significant adoption is in the medical benefit in particular where providers have the decision making power around which products are getting used.
What we're seeing is the most rapid adoption is in the Part B medical space, where the physicians have incentives to utilize the generic products and are the decision makers around utilization of the product. But what we're seeing in other markets is, where the payers have more control of what reimbursement looks like. That's where we're seeing continued slower adoption of the product. Ultimately it really comes down to is the decision making being made by the customers around which products they should carry and which products they then utilize. Is those decisions really being made by the payer incentivized by a rebate structures, or is it made by the provider? And sometimes even when the provider has a financial incentive, it becomes very difficult for them to switch adoption if the payers are driving decisions. It becomes a real hassle if the provider needs to carry multiple biosimilars for the same product category. That's a lot to unpack probably, Sean, in that, but this thing about, who's the payer? Are they making the decisions? It's just really interesting to see how this playing out in different markets in different ways.
That's a good point, David. Currently all of the biosimilar products that are on the market right now do fall in to that Part B or that medical benefit reimbursement and payment category. We do see a little bit of pharmacy benefit kind of leak into some of the markets, but overall the majority of them do fall under that part B as in boy or that medical benefit. And it really is the payer that's creating a formulary and either allowing or denying access or creating a tiering structure or a step through, or a fail on one product before being able to gain access to another product, which really does impact the level of adoption for these biosimilar products. And I think it's also important to mention that we are going to see some of these new product categories open up in the biosimilar market in the US in the coming years that fall into that medical benefit category.
Back in March, the FDA moved a bolus of about 90 to a 100 products over into the biosimilar pathway or product category. And within those products, largely in the insulin space or the human growth hormone or infertility space, looking at some of these product categories, those will inevitably fall into that pharmacy benefit. And so I think focusing on the insulin products that where we could see the first of many biosimilar insulins that launch in the US, could happen before the end of calendar year 2021 that will fall into that pharmacy benefit category, that PBM category. And as we look towards 2023 and the number of Humira biosimilars that are set to launch, those products will also fall into that pharmacy benefit category, which is going to be a dramatic change to this market that's five years old in the US and largely exists in that medical benefit or that part B benefit. This really isn't anything new to the industry or anything that the industry has experienced, it just really impacts the adoption around biosimilars. Moving over to Steve, can you shed some more light on what we're hearing from our health system customers?
Sure. Thank you, Sean. Recently we started hearing that the health systems are now seeing most, if not all, commercial health plans have at least one biosimilar on formulary for every innovator product. That said, with the health systems needing to work with several different commercial plans and those plans aligning to different biosimilars, it now becomes difficult for our customers and health systems to have to carry and manage all of the different biosimilars and originators. And it also limits their ability to dedicate and move market share.
That's the first that I've heard from our customers, where they're saying that we're seeing improvements in access to the biosimilar products. I think still that some of these challenges exist where you may be able to get all of your payers to cover one biosimilar, as far as reimbursement is concerned at parity with the innovator product. Then that second, third, fourth biosimilar that's on the market, that may be that clinic inside that hospital or that health system or that oncology group has made the decision to use the non-covered product. That's still, I think the challenge of this with the payer intermediary imposing some level of advantaging and disadvantaging. Maybe one product over another or covering one parity to the innovator, but then the other two or three or four are disadvantaged.
I think it's something we hear mostly from our GPO clinic customers. They have to overcome the challenge and the hurdle of the parity component here. It's also a reality for every hospital and health system that has access to these multiple products, that it's great if one payer covers a biosimilar and an innovator product. What happens when the health system wants to strike a deal with a large manufacturer, but there are certain payers that aren't covering that certain product? What are health system customers saying about how they're confronting these challenges? How are we advising them? What are some of the best practices that you've learned?
We're hearing that customers have great success in partnering with their regional players, like a regional Blue Cross or Blue Shield. If you think about an independent Blue Cross that's regional to Philadelphia area, or a Harvard Pilgrim that's regional to the greater Boston market where they can go out and they can create an economic model that demonstrates savings for both the customer, as well as the payer, then they can link arms and move forward with the policy that benefits both of them. If you think about what you do from a P and T perspective internally and how you evaluate multiple products that come out at different times of the year, how do you create speed in evaluating products instead of having to convene a P and T committee every time a product is approved? This will help health systems adopt these products faster when they're able to create speed in the evaluation process and eventually the approval process of these products.
Another recommendation would be think about how your IT infrastructure and your EMR infrastructure within your health system is going to be impacted by this. You've got multiple products in a specific category, you've got one innovator, you've got five biosimilars. How are you organizing yourselves around the prior auth process around, how that operation happens? How are you ensuring that you've got everything set up in your order sets so that when you're ordering the right product that your health systems will be reimbursed for and how are you engineering your EMR platform to account for all of these variables? It's both process and technology that you have to maintain focus on, but this will greatly increase the speed for approval.
Steve, David, thanks for the conversation. I think it's important to note that all these issues kind of blend together, but as a distributor and as a partner to both our manufacturers who are developing these innovative and less expensive products and to our downstream customers who are accessing and delivering these products, we truly work to create and expand the most access to these products. It's important that we're partnering not only with our downstream customers, but with our manufacture partners to ensure full and complete access to these products.
Thank you, Sean. To hear more from Sean and other biosimilars experts, be sure to listen to next month's episode. And in the meantime, you can always visit amerisourcebergen.com/insights for resources and content on the issues that matter most to healthcare stakeholders. The AmerisourceBergen Insights podcast is produced and delivered to you by AmerisourceBergen. AmerisourceBergen is a leading global healthcare company with solutions for manufacturers, pharmacies and providers. With a foundation in pharmaceutical distribution and through longstanding partnerships across the industry, we create unparalleled access, efficiency and outcomes for human and animal health. The work of our 22,000 associates powers our purpose: We are united in our responsibility to create healthier futures.
Continue the conversation
Contact our biosimilars experts to learn more about our solutions for this important product category.