SAN ANTONIO — Biosimilar drugs, which could have provided cost relief to the nation’s health care system as early as this year, have been delayed, putting more pressure on patients and payers as the demand for specialty medications is projected to climb by double digits through the end of the decade, according to the National Association of Specialty Pharmacy (NASP).
NASP presented the findings, from IMS Health, this week at its Strategic Business Exchange in San Antonio. In its presentation at the event, IMS reported that the specialty drug market, now about $93 billion, will top $100 billion in sales for the first time this year.
However, as more patients are being treated with cutting-edge specialty medications, there will be a lack of biosimilar products in the market to offset the rising costs of specialty pharmaceuticals in 2014 — a scenario that many stakeholders had hoped to avoid, NASP noted. At the start of the decade, health care analysts had expected the passage of government regulations that would have allowed the introduction of biosimilars. But regulatory pathways have been delayed.
"Three-and-a-half years later, we still do not have final biosimilar regulations," stated Doug Long, vice president of industry relations at IMS Health.
Gary Cohen, chief executive officer of NASP, said the association can help in offsetting costs via efficient administration and optimization of specialty drugs.
"It is essential that we continue to empower our specialty pharmacists by providing them with tools and education to improve both clinical and economic outcomes," Cohen explained. "Our members represent all stakeholders and will continue to focus on aligning goals to improve the health of populations with specialty therapeutic needs."
Last week in California, a veto by Gov. Jerry Brown illustrated lingering issues with the introduction of biosimilars.
Brown rejected Senate Bill 598, which would allow interchangeable biosimilar medications to be substituted for biologic medicines — which he supports — but also would require pharmacists to send prescribers notifications when a substitution is made in filling a prescription.
"This requirement, which on its face looks reasonable, is for some reason highly controversial. Doctors with whom I have spoken would welcome this information. CalPERS and other large purchasers warn that the requirement itself would cast doubt on the safety and desirability of more cost-effective alternatives to biologics," Brown wrote in his veto message. "The FDA, which has jurisdiction for approving all drugs, has not yet determined what standards will be required for biosimilars to meet the higher threshold for ‘interchangeability.’ Given this fact, to require physician notification at this point strikes me as premature."
Brown’s veto of the bill was applauded by the Generic Pharmaceutical Association (GPhA). The association noted that more than 30 organizations had urged Brown to reject the legislation, including CalPERS, the California Pharmacists Association, AARP, Walgreens, the California Retailers Association, the California Association of Health Plans, CVS Caremark, California Correctional Health Care Services, the Pacific Business Group on Health, Express Scripts and Kaiser Permanente.
"The reason that such a diverse coalition opposed this bill, and continues to oppose bills like this nationwide, is simple: It adds unneeded burdens to the dispensing of biosimilar medications that will drive up costs," commented Ralph Neas, president and CEO of GPhA. He cited an Express Scripts study released in September indicating that the savings from biosimilars to the state of California would be $27 billion over 10 years but that "state legislation that frustrates efforts to use biosimilars will undoubtedly jeopardize these savings."
"Gov. Brown wisely recognized that there is no need to rush to legislate while the Food and Drug Administration is still developing guidelines for these new medicines," Neas added.
The Biotechnology Industry Organization (BIO), however, expressed disappointment with Brown’s veto.
"Senate Bill 598 received overwhelming bipartisan approval, passing 176-13 in five committees and three floor votes in the [California] Assembly and Senate and was supported by hundreds of patient advocate, physician, health care, biotech, labor and business groups," BIO stated after Brown rejected the legislation. "The vetoed bill aligned with all five of BIO’s principles on biologic substitution, properly preserved patient access to accurate prescription information, maintained incentives for innovation and promoted a competitive market for biologic therapies. The bill included full transparency in the substitution process — providing patients and their physicians the right to know what biologic medicine the patient receives from the pharmacy."
BIO explained that unlike conventional generic drugs, biosimilars aren’t the same as the medications they’re designed to substitute. The group said that, for example, two biologics made using different cell lines and differing manufacturing processes will rarely, if ever, be exactly the same.
"As other states continue to address issues related to biosimilars, BIO encourages policy makers to continue to put patients first," BIO added.
In a report on biosimilars released earlier this month, Fitch Ratings said the impact of biosimilars on the U.S. drug channel will be like that of generic drugs but less pronounced initially.
"Biosimilars will likely present a compelling margin expansion opportunity for most drug channel participants, excluding originators. Fitch expects specialty drug distributors, specialty pharmacies, pharmacy benefit managers (PBMs) and payors to each capture a component of the cost savings derived from switching to lower cost drug alternatives from often very expensive biologic drugs," the ratings agency said in the report, titled "Trekking the Path to Biosimilars."
Still, Fitch noted, the lack of direct interchangeability and the overlap of novel biologic and biosimilar developers will result in much differentiation between the traditional generic and biosimilar markets.
"Today, there exist technological and scientific limitations that do not allow drug developers to show bioequivalence between a novel biologic and a biosimilar product to ensure a consistent efficacy and safely profile. As such, physicians may need to prescribe biosimilars specifically," Fitch observed. "Some physicians may be reluctant to adopt new therapies that cannot be proven to be identical to established pharmaceutical products and/or that have limited clinical data. Fitch expects that technological and scientific advances will eventually allow for bioequivalence to be established. But these types of developments are likely many years down the road."
This week, the Academy of Managed Care Pharmacy (AMCP) announced that it has created a Biosimilars Task Force to develop a Biosimilars Collective Intelligence System to document the safety and effectiveness of biosimilar medications, using continuous analysis of available data for innovator specialty drugs as reference points.
AMCP said it’s engaging data consortium and specialty drug experts from leading U.S. managed care organizations for assistance in building and launching the system before the first biosimilars hit the market. Armada Health Care and the Specialty Pharmacy Association of America (SPAARx) are the lead sponsors of the task force and the proposed multiyear initiative.
"Creating a Biosimilars Collective Intelligence System that documents biosimilars’ safety and efficacy could fundamentally change the landscape for specialty pharmacies, the most promising and fastest-growing sector in pharmaceuticals," stated AMCP CEO Edith Rosato.
