January 31 is set to mark the start of a watershed year for the biosimilars industry with the release of Amjevita, the first biosimilar for Humira, the world’s best-selling drug. Several more Humira biosimilars will also be released this year.
But without support from regulators and policymakers to make all biosimilars available on formularies, the full promise of these price-cutting drugs could be lost, costing the U.S. health care system $133 billion in the next three years.
It has been eight years since the FDA approved the first biosimilar in the United States. To date, 40 biosimilars have been approved in the United States after rigorous evaluation by the FDA; 25 of these are on the market.
Biosimilars have effectively promoted price competition in the U.S., directly saving patients money and forcing the makers of brand-name reference products to lower their prices to maintain market share. The shift away from reference products begins almost immediately after a biosimilar enters the market, and continues over time.
After all this progress, it pains me to say that the biosimilars industry’s promise and growth are under threat.
The launch of a wave of Humira biosimilars throughout 2023 will help create a more competitive market that can drastically reduce prescription drug costs — but only if these biosimilars and others are available to the people who need them. Humira, which can cost upward of $84,000 annually, has so far not faced U.S. competition amid a 470% price increase since it was launched in 2003. The cost of Amjevita and the other Humira biosimilars has not been announced, but are expected to be less than what Humira costs.
Access to medicines is determined by formularies, the list of prescription medicines covered by a person’s health insurance plan. Treatments not included on a formulary — which is set by pharmacy benefit managers (PBMs) — are not covered by insurance. Some formularies have excluded biosimilars, even though they represent equally effective but lower-cost alternatives to brand-name reference products.
Americans should not face sky-high prescription prices and fewer options for the treatments they need because of market domination by brand-name biologics and PBM shenanigans.
The Biden administration, Congress, and federal regulators must ensure that, as a starting point, the new Humira biosimilars will be available to all Americans covered by Medicare. A 2021 report by the Department of Health and Human Service’s Office of Inspector General found that Medicare could have saved more than $2 billion on Humira over four years if biosimilar competition had been available. It’s time that all biosimilars be placed on Medicare formularies to ensure that seniors have access to lower-cost medicine options.
Pharmacy benefit managers have stated their intent to include just a limited number of Humira biosimilars on their formularies. This is happening as the Federal Trade Commission investigates the business practices of the six largest PBMs in the United States. The FTC and other regulators should ensure that anti-competitive rebate schemes and monopolistic tactics are removed from the formulary allocation process, and that lower-cost, FDA-approved products are fully included Medicare formularies.
Formularies tend to be set for the full year, and newly launched medicines aren’t included until the following year. Pharmacy benefit managers and regulators must allow for biosimilars and other new drugs to be added to formularies as they come online to ensure maximum competition, cost savings, and access.
2023 is set to be a make-it or break-it year for drug pricing — if regulators, policymakers, and pharmacy benefit managers make good on the promise of biosimilars. A competitive and equitable market that provides Americans with lower-cost, safe, and effective treatment options is vital for the future of U.S. health care.
Juliana M. Reed is the executive director of the Biosimilars Forum.
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