Some years ago, when people in and around healthcare happened upon the then-faraway prospect of biosimilars, they seemed almost in awe of their transformative potential.
Agents with biologically similar properties to established biologics that had already received an FDA thumbs-up, which could be developed for substantially less than the so-called originator product, and thus priced commensurately with that initial investment? I’ll take 65, please. It was the pharmaceutical equivalent of a no-calorie cake offering the same yummy goodness of the real article.
Biosimilars haven’t yet made a real dent in the U.S. Only one such product has reached the market: Sandoz’s Zarxio, biosimilar to Amgen’s cancer drug Neupogen. Another, Celltrion’s Inflectra, biosimilar to Janssen’s autoimmune drug Remicade, received FDA approval in April. And earlier this week, Samsung Bioepis said the FDA had accepted its application for a Remicade biosimilar. That said, it seems that every industry player wants in on the biosimilar action, in many instances teaming up with another developer to accommodate demand. Indeed, after 20 or so years, biosimilars have officially been anointed an overnight sensation.
See also: What do doctors think about biosimilars?
One thing is clear: This is not an if–when scenario. You’d be hard-pressed to find too many people in and around the pharma ecosystem who don’t believe that biosimilars will be big business before too long.
As Tim Fratus, executive director, U.S. marketing for Merck Biosimilars, puts it: “There is a uniformity of opinion that biologic competition [via biosimilars] is a really good thing and will be helpful for everybody who needs to pay for drugs.”
Adds Anna Walz, founder and CEO of Medisys Health Communications, “They’re an incredible addition to the armamentarium. They’re so unique and so potentially disruptive. And they’re arriving at a time where there’s so much focus on the value they could provide.”
A report unveiled in late March by the IMS Institute for Healthcare Informatics attempted to quantify their eventual impact. Pointing to an active (and ever-swelling) pipeline of 56 products, IMS estimated that biosimilars will deliver total savings to health systems in the U.S. and Europe of up to $110 billion through 2020.
While IMS hedges its prediction by noting that certain geographies are riper for biosimilar penetration than others, the report concludes that “by opening markets to biosimilar competition, healthcare systems could realize a 30% reduction in price per treatment day compared to originator biologics.”
IMS notes that around 30 companies are attempting to devise biosimilar versions of 16 molecules. Good luck to the marketer charged with differentiating the fifth-to-market Remicade biosimilar from those that came earlier. And from the payer perspective, there’s a too-much-of-a-good-thing component that those who are bullish on biosimilars have largely ignored.
In the report, IMS puts it thus: “A narrow focus by payers on price alone risks constraining the longer-term opportunities for savings. This would make the biosimilars market less attractive for manufacturers — reducing incentives to invest in the development of subsequent waves of biosimilars.”
That, in part, explains why we’re seeing some systemic angst about the introduction of biosimilars into the pharma mix even as just about every stakeholder within it welcomes their debut. Some of the concern centers around the basics. “Given how complex these molecules are and how difficult the manufacturing process is,” says John Clarkson, SVP, management supervisor at H4B Chelsea, “the questions if I’m an HCP are, ‘Can I rely on these manufacturers? Can I trust their clinical-trial programs?’ And if I can, ‘What level of concern am I going to have about switching patients from a reference product, which they’re doing well on, to a biosimilar?’”
Walz agrees, adding, “There are a lot of perceptions that need to be addressed, like the whole idea of ‘bathtub biosimilars.’ Who’s making them, and how? If you’re going to make a quality product, you need to have data and controlled manufacturing processes. I don’t know how low pricing can get if you’re doing all those things.”
Here, then, is a mid-2016 State of the Biosimilar Union, as viewed through the lenses of individuals and entities with horses in the race.
1. THE BIG PHARMA
Dr. Dora Bibila (left), general manager of Merck Biosimilars, and Tim Fratus, executive director of U.S. marketing for Merck Biosimilars (Photo credit: HollenderX2)
Among the world’s biggest pharma organizations, Merck ranks as one of the most advanced in its embrace of biosimilars. Through its three-year-old partnership with Samsung Bioepis, Merck has several biosimilar candidates (for Humira, Herceptin, and Lantus) in Phase III development. Its Enbrel biosimilar Brenzys and its Remicade biosimilar Renflexis have already received a thumbs-up from Korea’s Ministry of Food and Drug Safety. (Under terms of the arrangement, Samsung Bioepis handles development, manufacturing, and clinical trials, while Merck takes the commercialization reins.)
While Merck may be ahead of the competition, top execs in its biosimilars unit are very clear that they don’t have all the answers — not about imminent opportunities, eventual vulnerabilities, or the myriad pieces of the puzzle yet to fall into place. The company’s overseas experience provides a base of learning upon which the U.S. team can build, but the payer, HCP, and patient landscapes are so different as to render most analogues moot.
“Europe, at this point, is the most advanced in terms of biosimilars — there are more than 20 biosimilars on the market right now,” notes Dr. Dora Bibila, general manager, Merck Biosimilars. “That said, we’re trying to marry the learnings from those markets with the understanding that several other markets, including the U.S., are a very different archetype.”
“We’re learning as we go,” Fratus adds. “We’re seeing some models from outside the U.S. we can follow that have been effective in bringing physicians up to speed in terms of the basic questions: ‘What are biosimilars?’ ‘How are they produced?’ Things like that. But there’s a definite change in mind-set required.”
While many marketers are already obsessing over the task of conveying minutiae about biosimilars to patient populations, Fratus downplays such concerns. “Really, when you think about it, patients are patients. Same thing with physicians: They want to help their patients get better,” he notes. “The key difference in the U.S. is that the payers are certainly more diverse.”
In advance of Merck’s first U.S. biosimilar launch — still a few years down the road — the company is proactively engaging any number of stakeholders, everyone from payers to physicians to policymakers, in order to lay the groundwork for the sustained success of the product class.
“We want to make sure that there is a perspective of long-term viability, not just short-term cost savings,” Bibila points out. “The perspective that [biosimilars are] going to be just like generics may undermine a lot of what we think is necessary to be successful.”
See an infographic: The growing biosimilar market in the U.S.
There’s a customer-support program in place and HCP education efforts are already in full swing. That said, without putting words into her mouth, Bibila’s approach to commercializing biosimilars appears to be something along the lines of “don’t take anything for granted.” Merck isn’t assuming that physicians will immediately recognize the aforementioned difference between biosimilars and generics, or even that they’re paying a whole lot of attention right now.
“Physicians in a particular therapeutic area of specialty don’t really engage with biosimilars until they have one approaching,” Fratus says.
Look, then, for Merck to continue to press hard on the education front, perhaps even harder than it needs to at this point in the commercialization process.
“The biosimilar is a hybrid model,” Bibila says. “It’s not an innovative brand and it’s not a generic. Very parallel to what Merck typically does when we’re launching innovative brands, our commitment is [to be] fully behind our biosimilars product and committed to generating the data that is going to make physicians and customers feel comfortable in the longer term.”
2. THE GENERICS COMPANY
Pharma has never done “new” all that well. Whether in regard to new classes of products or mystical marketing mechanisms like social media, companies have always worked for the silver medal. Why? Because the gold medalist has always been the crash-test dummy, so to speak, the one that attracts the attention of pesky regulators. But when Sandoz VP and head, biopharmaceuticals, North America, Greg Oakes is asked about his company’s launch of the first biosimilar in the U.S., he dismisses any such worries.
“We’re happy to be the pioneer,” he says.
Speaking nearly seven months after the September 2015 debut of Zarxio, Oakes recounts how Sandoz parent Novartis embraced first-to-market status.
“The thing to remember is that it wasn’t really that new. Novartis has been in this space for quite some time. There’s always been an unwavering commitment,” he says.
It was in the execution phase of the Zarxio launch that Sandoz’s biosimilars team truly distinguished itself. The company’s education efforts had a singular aim: “Basically, to tell everyone what biosimilars are and what they’re not,” Oakes reports. In retrospect, the key decision, and the one that earns Sandoz huge plaudits from other marketers, was marketing Zarxio as a distinct product rather than a mere knockoff of an existing entity.
“It seems they were able to differentiate a product that was developed to be a clinical equivalent of something else,” Clarkson says. “Standing out when a product isn’t meant to be different is a pretty significant hurdle to clear.”
This was not easy. As often as the Sandoz team told stakeholders that it didn’t have all the answers, the questions kept coming. There was uncertainty about issues as basic as naming (ultimately, to stem market confusion, the Zarxio biosimilar would be officially registered as filgrastim-sndz) and as complicated as reimbursement. Yet when asked about the challenges he and his team faced, Oakes has a surprising response.
“One of the biggest obstacles was apathy,” he says. “There was some question if there was really a need or a sense of urgency for [individuals/organizations in the U.S. healthcare system] to begin adopting and utilizing biosimilars. It took time and effort to bring those stakeholders along in their understanding.”
But while one senses that Sandoz execs received many a congratulatory or appreciative fruit basket from other would-be biosimilar marketers, Oakes pooh-poohs the notion that there was a single eureka moment or learning. “There was no playbook. Everyone wanted the benchmarks and uptake curves, but they really didn’t exist here.”
3. THE TRADE GROUP
In discussing the factors that will ultimately contribute to widespread acceptance in the U.S. of biosimilars, both Bibila and Oakes point to an unusual degree of collaboration among companies used to battling one another for market domination.
“We’ve taken advantage of the opportunity to align with our colleague,” as Bibila puts it. “We have a unified perspective when it comes to what we should be talking to policymakers about.”
That perspective has been articulated with uncommon skill by the year-old Biosimilars Forum, which states as its aim the development of a vibrant biosimilars market in the U.S. Counting Allergan, Amgen, Pfizer, and Teva among its other founding members, the forum has already been involved in user-fee negotiations with the FDA and developed a wealth of informational and educational materials.
Its origin story isn’t exactly something out of the Marvel canon. When manufacturers of biosimilars started to reveal their rollout plans, they were met with an unusual degree of policy pushback at the state level. “The companies realized they had some issues in common,” says forum policy adviser Michael Werner. “There needed to be a venue for everyone to talk through those issues.”
In the months that have followed, the forum has been heavily involved on the policy front, particularly when the Center for Medicare and Medicaid Services set a single reimbursement price for all biosimilars of a given brand-name biologic covered under Medicare Part B — in essence ruling that all biosimilars in a class are the same. The forum has led industry pushback against the rule.
“It forced us to get right up to speed — we didn’t have a long runway,” Werner says. “A lot of activity had to happen and happen immediately. But it showed the value of what we’re doing.”
Werner refrains from making big-picture pronouncements (which makes him a rarity in the world of pharma policy shaping), but it’s clear he believes that the Biosimilars Forum’s messages are being heard. It certainly helps that none of them advocates buying a particular product. Rather, the group is advocating for a technology.
“If you and I are having this conversation 10 years from now, biosimilars are going to be a major part of the market. Will there be a biosimilar for every indication of every biologic?” Werner asks. “We don’t know. But they’ll be there.”
The forum doesn’t plan on restricting membership to biosimilar makers. In the months and years to come, look for the organization to align with payers, employers, patient advocates, and anyone and everyone else sharing its singular goal.
4. THE PBM
It’s widely assumed that, among all stakeholders, pharmacy benefit managers and payers are the giddiest about the imminent arrival of additional biosimilars. The thinking goes something like this: More products that are just about equally effective and safe equals more competition equals more opportunity to negotiate on price.
But to hear Steve Johnson, Pharm D, senior director of health outcomes at Prime Therapeutics, tell it, the payer–PBM approach to biosimilars is more nuanced than commonly assumed. Last year a PBM collectively owned by 13 Blue Cross Blue Shield–owned or –affiliated plans, Prime, tapped renowned healthcare economist Alex Brill to author a study, The Economic Viability of a U.S. Biosimilars Industry. In it Prime cited numerous factors that could retard the growth of the U.S. biosimilars market, among them state legislation governing biosimilar substitution. Mostly, though, the report focused on the economics at hand, questioning whether manufacturers will find it worth their while to develop biosimilars of non-blockbuster biologics.
Johnson, a pharmacist by training, says that everyone in the biosimilars stakeholder set is lacking critical guidance on interchangeability. “With traditional generics, pharmacists can make substitutions — a generic version of a product for a branded one,” he explains. “But with biosimilars, nobody knows yet what will happen with interchangeability. Right now, manufacturers obtain that on a product-by-product, application-by-application basis. It’s an open question on how this will evolve.”
As for the economic concerns expressed in the Prime report, Johnson says they haven’t changed significantly in the year-plus since its publication.
“The cost for a manufacturer to bring a biosimilar to market, we believe, is quite high,” he says. “That naturally limits the number of biosimilars that will be developed.” That’s why he — and, ostensibly, his peers at other PBM organizations — is anxious to see how Inflectra, the Remicade biosimilar approved by the FDA in April, will be received by the marketplace.
“Zarxio was biosimilar to Neupogen, not Neulasta — and Neulasta has the majority of spend in that particular category. So what you saw there was a biosimilar of a product that was already being used less,” Johnson notes. “Remicade is one of the highest-cost products administered through the medical benefit. It presents a very, very different situation.”
That said, Johnson remains a believer in biosimilars. “The concerns you used to hear about generics — ‘not as good as the brand’ — were refuted over the years,” he says. “And in a bigger-picture sense, whenever you add competition for the same use, indication, or patient population, it’s inevitably a good thing. It’ll be interesting, that’s for sure.”