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Navigating the Complex Nature of the U.S. Biosimilar Field
Written by John Patten
Published on September 15, 2016
Growing activity in the development of biosimilar medications has many envisioning another period of high growth in pharmaceutical manufacturing, just as the development of generic pharmaceuticals exploded in the 1990s.
As ANDREW M. PETERSON, PharmD, PhD’09, the John Wyeth Dean of Mayes College of Healthcare Business and Policy noted in his introduction for the Mayes College “Making the Connections: Biosimilars” presentation and discussion, the developing field of biosimilars is a topic of growing importance to the business side of pharmaceuticals, even as regulatory and business challenges impede growth.
“While [biosimilars] have been available in Europe for more than a decade, the recent introduction in the U.S. marketplace has not been without its controversy,” Dr. Peterson said.
Robert Field, JD, MPH, PhD, founder and former chairman of the USciences Department of Health Policy and Public Health, moderated the March 15 presentation sponsored by an unrestricted educational grant from AstraZeneca Pharmaceuticals. Panelists MICHAEL CASTAGNA P’00, PharmD, MBA, and Mesfin Tegenu, MS, RPh, president of PerformRX, a pharmacy benefit provider, discussed the growth of the U.S. biosimilar industry from their perspectives. Dr. Castagna has led biosimilar development at several pharmaceutical companies, including recent work as a global biosimilars commercial lead executive at Amgen Biosimilars. Tegenu spoke on the challenges facing payors, prescribers, and pharmacists in navigating the complex challenges new medications present.
Many seem to view biosimilars as analogous to generics since both use existing pharmaceutical products coming off of patents as a springboard to build market share. But while generics are based on small molecule drugs, biosimilars are based on highly effective — and very complex — biologic drugs.
To highlight the challenges of developing these drugs, Dr. Castagna compared the complexity of somatropin, a human growth hormone (hGH) biologic approved in 1998, which has 3,091 atoms, to a modern IgG1 antibody biologic with more than 20,000 atoms.
“When you think of complexity, think about how many companies can build an F-14 fighter jet — that’s how complex these molecules are to build,” Dr. Castagna said.
And because developing biologics and biosimilars costs hundreds of millions of dollars, the costs to enter the industry will likely limit the number of competitors. Companies having to commit to nearly a decade of development and outlays approaching half a billion dollars have to be prepared to make expensive decisions along the way, Dr. Castagna said.
He pointed out that a company several years into development of a biosimilar may have already invested more than $100 million only to find it necessary to purchase a competitor working on a similar product, further increasing costs. “People have gotten smart and patented a lot of stuff around biologics,” Dr. Castagna said.
Then there’s the still-evolving approval process for biosimilars, which can lead to designations of a new product that are less desirable than hoped. Biosimilars can be classified as either “interchangeable” with its biologic parent or “highly similar,” requiring different indications, administration methods, and record-keeping requirements. Dr. Castagna pointed out it’s even possible for two biosimilars based on the same parent drug to not be equivalent when considered for prescribing to patients.
Tegenu said nearly all states are considering or have enacted distinct requirements for prescribing biosimilars, adding another layer of complexity. “It varies from state to state,” he said. “It can be crazy restrictive or at the other end.”
While this lack of clarity is holding back development of biosimilars in the U.S., pricing may be an even greater impediment. Tegenu said it’s not unusual for a full treatment cycle with a biologic to cost as much as $300,000 or $400,000 with the potential to save about 10 to 20 percent with a biosimilar. These are costs that — even discounted — draw high scrutiny from insurers and CEOs trying to keep an eye on benefit costs.
All of these factors give manufacturers reasons to reconsider whether or not to enter the field.
“People [in the industry] are going to take a step back and say, ‘Given all these hurdles, given all this unclarity, should I just take a different strategy?’” Dr. Castagna said.
He said after 10 years of development in Europe — which is perceived to be more encouraging of biosimilar development — there are only three groups of biosimilars, suggesting many industry players are choosing alternative strategies.
The panelists agreed pharmacists will play a critical role in biosimilars as the need to recognize the proper applications and determine the true costs become crucial. Pharmacists and prescribers will need to recognize whether a biosimilar product is equivalent to the more-expensive parent drug or only “highly similar” or if Biosimilar B is equivalent to Biosimilar A.
“Which one do you pick? Which one is the most logical one?” Tegenu asked.
When looking down the road, the panelists agreed biosimilars will likely force substantial changes on healthcare and the pharmaceutical industry though just how it will shake out is not very certain at this early stage.
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