Biosimilar medications can offer meaningful cost savings for
payers, but market and regulatory barriers are still preventing them from
realizing their full economic potential, according to a March 31 Johns Hopkins
University study funded by the ERISA Industry Committee.
"We could see and empirically prove that patients…tended to
be better off if they were on the biosimilar," says Mariana Socal, a
physician and researcher at the Johns Hopkins Bloomberg School of Public Health
and one of the study's authors. "They had lower out-of-pocket costs when
they were on the biosimilar."
While 16 biosimilars have earned FDA approval, according to the
report, most of those drugs are the only biosimilar in their category, creating
a duopoly price structure rather than robust market competition with at least
three drugs.
Per the report, multiple biosimilars have entered the market for
only two drugs, Remicade (infliximab) and Neupogen (filgrastim). The report
concludes that, in those categories, biosimilar competition has generated
remarkable cost savings and has the potential to generate much more through
increased biosimilar use.
Socal says she believes opaque markets are to blame for
biologics' limited impact on drug markets at scale.
"When we looked at [the study companies'] formularies and
their utilization, we were surprised to see that even within the same company,
they had such a remarkable diversity in terms of biosimilar market share, in
terms of the prices they were paying, and how much biosimilars they were able to
use," Socal says. She adds that PBMs should do more to inform their
clients about the potential savings from higher biosimilar use in formularies.
Steve Cutts, head of specialty pharmacy for the PBM Magellan Rx
Management, says that Magellan makes an overt effort to tell clients about the
potential price savings from biosimilars.
Cutts says that many biologics are administered through a
medical benefit, rather than a pharmacy benefit. That claims structure could
explain some of the limited visibility of biosimilar substitution opportunities
for plan administrators designing formularies, and would require coordination
with providers to be addressed.
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