Market share is often held up as the most relevant metric for the success of a biosimilar class. I believe there are other metrics, like cost savings or signs of greater patient access, that should also be used to define biosimilars’ successes or failures.
In the U.S., the first biosimilar was launched in September 2015. As I write this, there are 38 FDA-approved biosimilars; 22 of them are commercially available. These 22 products compete in nine molecule classes across oncology, rheumatology, diabetes care, and now ophthalmology. According to the most recent “U.S. Generic & Biosimilar Medicines Savings Report” from the Association for Accessible Medicines, biosimilar savings in the U.S. were $7.9 billion in 2020 (three times higher than savings from 2019) and have the potential to increase to $133 billion by 2025.
Biosimilars for oncology have been among the most often-cited success stories. Nearly 80% of biosimilars launched in the U.S. have indications for oncology, and market adoption has been strong across both therapeutic and supportive products. Biosimilars for Avastin (non-proprietary name bevacizumab, used to treat various types of cancer) are nearing 80% market share; biosimilars for Rituxan (non-proprietary name rituximab, used to treat certain types of cancer and autoimmune diseases) surpassed 70% market share; and biosimilars for Neupogen (non-proprietary name filgrastim, often used in combination with many cancer treatments to stimulate the growth of white blood cells to fight off infections) have started to stabilize in the low 90% share range.
More impressive than adoption rates is the speed of adoption for many of biosimilar products. Although biosimilars for bevacizumab, trastuzumab, and rituximab have been commercially available only since mid- to late 2019, the rapid acceptance and adoption of these oncology biosimilars is frequently noted as the key driver to biosimilar savings in the U.S. market.
In contrast, market share for biosimilars to Remicade (non-proprietary name infliximab, used to treat many autoimmune diseases including rheumatoid arthritis, psoriatic arthritis, Crohn’s disease, ulcerative colitis, ankylosing spondylitis, and plaque psoriasis) just crossed 40% this past quarter, even though the launch of the first Remicade biosimilar was in July 2016.
Does this seemingly less-than-robust biosimilar competition against Remicade represent a failure? I say “No,” based on my analysis of data from the Centers for Medicare and Medicaid Services around beneficiary spending for Part B drugs — drugs administered in doctors’ offices and other outpatient settings by physicians and other health care providers — going back to 2012. The table below shows total spending across the infliximab category from 2015 to 2020:
While it took about two years before Remicade biosimilars were used in Part B, the impact to the cost curve has been quite striking. In the last three years, total spending on the infliximab category has dropped 42% since its peak in 2017. Despite more than $300 million in new spending on infliximab biosimilars between 2018 and 2020, total spending in the category has plummeted. Why? A significant portion of the drop is coming directly from the declining prices of the branded reference product, Remicade. In fact, sales of Remicade in Medicare Part B fell by $678 million (51%) between 2017 and 2020.
Rheumatology, unlike oncology and other therapeutic areas, has seen fierce price competition between biosimilars and the reference product, Remicade, that has resulted in significantly lower costs for the entire class. The average sales prices for infliximab products show that Remicade’s has declined 58% since 2018, moving in lockstep with its biosimilar competitors quarter to quarter.
In response to fierce competition on price, Remicade’s manufacturer, Janssen Biotech, recently launched an unbranded version of Remicade called Infliximab that comes with an incredible almost 60% discount to the list price, formally known as the wholesale acquisition cost. This unbranded version now has a list price below Remicade’s original average wholesale price in 1998.
In my analysis, it is unlikely that the price erosion of branded Remicade, as represented by the average sales price, and the launch of an unbranded version of Infliximab at roughly 60% off, would have occurred without the launch of biosimilar competition.
The Biologics Price Competition and Innovation Act, which was passed into law as part of the larger Affordable Care Act in 2010, had the ultimate goal of creating a pathway for manufacturers to develop and launch biologic products to compete with reference products after their loss of exclusivity. Biosimilars were designed to help drive down the costs of high-price biologics, and also spur further innovation into the next generation of therapeutics, hence the inclusion of the word “innovation” in the name of the act.
In oncology, biosimilars have driven significant cost savings by obtaining high market share for modest price decreases. In rheumatology, biosimilars to Remicade have pushed its manufacturer to fiercely defend its market share and dramatically lower prices, making biosimilars a key factor in driving competition, lowering prices, and increasing patient access to life-changing treatments.
Even though biosimilars in rheumatology do not yet represent half of market share, they have not failed. On the contrary, I believe they have been a huge success.
Looking ahead, market sustainability is a topic that warrants increased focus, particularly for infliximab products. As average sales prices continue their aggressive downward trend, so too will provider reimbursements under the buy and bill model, in which providers acquire medicines to administer to their patients and then bill the patient’s insurance to recoup the cost of the medicine. The economic benefit for a provider in this model is the margin between the cost of the medicine it buys versus the value of the reimbursement it receives from a patient’s insurance.
Reimbursement is driven by a product’s average sales prices. If it declines more rapidly than the provider’s cost to acquire the medicine, it is likely that provider economics will turn negative — acquisition cost higher than reimbursement — and could create meaningful disincentives to convert to biosimilar products with lower average sales prices. This dangerous cat-and-mouse game may ultimately require new policy or economic models to change the dynamic, and is worth further analysis to ensure a robust and competitive biosimilars market that is sustainable in the long run.
Jeff Baldetti is the director of biosimilars at Cardinal Health, a global health care services company and distributor that provides distribution access and solutions for a wide array of pharmaceutical products, including biosimilars.