Delivering on a Watershed Moment for Biosimilars and Patients
By Juliana M. Reed | This opinion piece originally published in Real Clear Health and can be found here.
The American healthcare system is at a critical point. Specifically, a wave of lower-cost biosimilars for the world’s best-selling drug Humira will launch this summer and may determine the future affordability of prescription drug prices in the U.S. If successful, these biosimilars could increase patient access to life-saving treatments and save patients and the healthcare system more than $5 billion dollars per year.
Biosimilars are FDA-approved lower-cost, safe and effective treatments that mirror biologic medicines. Biosimilars treat chronic and debilitating conditions like cancer, arthritis, diabetes, psoriasis, Crohn’s Disease, and more. These treatments effectively promote long-term cost-savings by selling at lower prices than their reference products and by promoting competition in the prescription drug marketplace.
In the eight years since the first biosimilar became FDA approved in the U.S., the industry has become a crucial element of delivering cost-effective treatments to patients – with a total of 40 biosimilars approved by the FDA after rigorous testing. But uncertainty surrounding accessibility and equity for these treatments looms large.
This uncertainty comes at the most consequential time in the biosimilar industry’s history. Following the January launch of the first Humira biosimilar Amjevita, the industry witnessed extremely low uptake – highlighting the importance of formulary access.
Pharmacy Benefits Managers (PBMs) determine the success of prescription drugs by negotiating prescription drug rebates with manufacturers and developing formularies that decide cost and access to treatments. While PBMs claim to lower costs for patients, they prioritize high cost, high rebate products.
PBMs actively favor the higher-cost biologics by placing them on a preferred formulary tier or requiring fewer restrictions for a patient to access them – simply because this is better for the PBMs’ earnings. This lack of access to lower-cost treatment options stifles free market competition, limits patient savings, and harms the long-term sustainability of the biosimilars industry.
Biosimilar manufacturers intend to offer patients lower-cost treatment options, but they are often required to offer high rebates to PBMs to earn formulary access – giving savings to PBMs that should be going to patients. These rebates are blatantly anti-competitive and harmful for patients.
This lack of patient access and prominence of PBM rebate schemes underscore the need for urgent federal intervention to lower drug costs. It is unacceptable that Humira can cost upward of $84,000 annually and has risen in price 470% since first introduced and PBMs can limit access to lower cost biosimilars.
Support for biosimilars is bipartisan, commonsense, and for the greater good of patients.
The Federal Trade Commission (FTC) should continue its investigation into how the practices of PBMs limit patient choice and patient cost savings.
The Biden Administration, Congress and federal regulators should ensure lower-cost Humira biosimilars are available to Medicare patients by placing these treatments on preferred tiers on Medicare Part D formularies. Since Amjevita’s launch, there has been little to no Medicare uptake of the biosimilar. This demonstrates a lack of prioritization by CMS to provide patients with access to lower-cost medicines and a lack of government accountability to realize healthcare savings.
Congress should pass legislation to remove barriers that prevent patients from accessing lower-cost biosimilars. This legislation could include de-linking fees for PBMs that have a relationship with high list prices and mandating rebates are provided at the point of sale – giving the benefits to patients, not PBMs.
Ultimately, this summer marks make-it-or-break-it watershed moment for U.S. biosimilars. Policymakers must deliver access- and equity-driving policies for these new biosimilars. Without critical support, the promise of biosimilars could be lost forever.
Juliana (Julie) M. Reed currently serves as the Executive Director of the Biosimilars Forum. Previously, Julie served as the Forum’s President for more than eight years and was one of its founders.