Biosimilars: A Closer Look

September 1, 2023
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Female and male pharmacists looking at medication


Biologic pharmaceuticals are used to target difficult-to-treat disease states for vulnerable patient populations. Even though they only account for about 2 to 3% of prescription drug utilization in the United States, they are responsible for between 40 and 50% of drug spending. By 2025, however, 17 big-name-pharma biologic molecules prescribed to treat conditions like cancer, chronic skin diseases, diabetes, inflammatory bowel diseases, kidney disease and arthritis will lose their exclusivity, potentially curbing their $60 billion annual sales trends.

Biosimilars are biologic drugs highly similar to those already on the market, with no clinically meaningful differences in safety, purity and potency. As their availability increases, patient access to these more cost-effective alternatives to the “parent compound” (original biologic drug) will decrease the cost of care in the form of reduced copays and insurance deductibles. According to a January 2022 RAND Corporation study, adoption of expanded biosimilars could drive down prices for expensive biologic medications, resulting in a savings of $38.4 billion, or 5.9% of projected total U.S. spending on biologics, from 2021 to 2025.

Safety First

Because biologic compounds are typically created in cells, there are inherent variations that result from the manufacturing process. That means in both biologics and biosimilars, there may be millions of slightly different versions of the same therapeutic protein—like a monoclonal antibody—in a single lot. This inherent variation can be expected during the manufacturing process of both the reference product and biosimilar.

Biosimilar products are manufactured and evaluated to perform within the historic safety, quality and efficacy standards of the parent compound, and products approved by the FDA as “interchangeable” must be tested for multiple switches (at least three) against the parent compound to ensure those standards are not compromised.

Thus far, there are more than 100 FDA/EMA (European Medicines Agency)-approved biosimilars on the market, all of which had to pass analytical testing for similarity, clinical pharmacology testing and animal toxicity testing. Biosimilars approved as interchangeable can be expected to produce the same clinical result as the reference product with no greater safety or efficacy risk than if patients were continuously treated with the parent compound.

Substitution of these products is regulated by the state. In both Louisiana and Mississippi, a pharmacist may substitute a biosimilar for a prescribed biologic if the FDA has determined it is interchangeable, the patient consents to the substitution and if the prescribing physician or APP has not indicated that substitution is prohibited for some reason.

There are already some examples of cost savings associated with a switch to biosimilars. In 2021, the Ford Motor Company adopted five biosimilars and saw an 88% conversion in their PPO plan that resulted in $4.8 M in plan savings and no patient complaints or disruptions.

At Ochsner Health, there has been good adoption of oncolytic agent biosimilars through the employee health plan. Through May 2023, there was a 59% adoption rate of the rituximab biosimilar, 79% adoption for the bevacizumab biosimilar and 100% adoption for the trastuzumab biosimilar.

But Savings are an Important Perk

“Savings to the Ochsner Employee Plan last year due to biosimilars was about $350,000, and our utilization is in line for this year as well,” says Matthew Malachowski, Pharm.D, MHA, BCPS, System Director of Population Health and Ambulatory Care Pharmacy at Ochsner Health. “These oncolytic agents are administered under the medical benefit, and we are starting to see opportunities in the pharmacy benefit for adalimumab (Humira) biosimilars as well. Biosimilar utilization is one way we can ensure our employees and family members get the care they need while keeping our insurance premiums as low as possible. This same benefit is imparted to our patients when we prescribe these agents for them.”

Proactive Adoption Keeps Our Physicians and Advanced Practice Providers at the Forefront of Treatment Decisions

Biosimilars for biologics covered under the pharmacy benefit are also now showing up in Real-Time Pharmacy Benefits, a digital tool that alerts physicians and APPs at the bedside if a lower-cost alternative to prescribed medication is available.

“This tool offers clinical decision support for our physicians and APPs, helping them select cost-effective medications that will save their patients money out of pocket,” says Malachowski. “When writing a prescription, they are prompted if there is an interchangeable drug that would save the patient at least $6 per month. This helps identify comparable products with lower insurance tiering, such as moving from a brand to a generic agent or to a preferred branded product. If the physician or APP decides to write a prescription for that drug, they can flip the script to the new product with equivalent dosage and frequency adjusted based on the measurements of the original product.”

This component of patients’ electronic medical records was originally designed to highlight cost-effective generic alternatives to higher-cost brand names. Ochsner Health Network’s Pharmacy & Therapeutics Committee is working on the medical side to help physicians and APPs using a particular therapy select the most cost-effective medication for their patients and the organization.

Kyle Kalanta, Financial Director of Pharmacy Operations, investigates biosimilars on the market on a quarterly basis to see which ones can be added to Real-Time Pharmacy Benefits to reduce costs for patients and OHN.

When a new biosimilar enters the market, the producer is allowed six months exclusivity, so it takes a while for the price of the agent to drop enough to produce significant cost-savings.

“For the rest of 2023, insurances will—in most cases—continue to cover the parent compound for many biologics. Pharmacy benefit managers will continue pushing patient coverage into the biosimilar market and so it’s probably better—from a patient education standpoint and to reduce disruption—for physicians and APPs to have these conversations with patients now versus later,” Malachowski says. “Expressing that biosimilars are safe, they’re not scary, and that the design of the package may change but everything will be OK, seems like a good strategy. New interchangeable products also empower our Pharmacy Teams to support our physicians and APPs with this conversion to lower cost agents without disrupting their clinic or adding another responsibility for them to manage. If we begin to address this with patients, face biosimilars head on, and manage the transition ourselves, that allows our care teams to keep oversight of what treatments are best for our patients as opposed to what is mandated by external insurance carriers.”

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