During the Senate Finance Committee hearing earlier this year addressing Drug Pricing in America, the committee posed questions to the seven biopharmaceutical executive witnesses. All seven witnesses have now provided written responses to the committee’s questions. Contained in those responses was much discussion about the biosimilars market, and specifically why biosimilars have largely failed to gain traction in the US market. For instance, Merck’s Renflexis and Pfizer’s Inflectra, both biosimilars for Janssen’s Remicade, have each only captured a small percentage of the market share, despite being priced 35% and 25% respectively lower than Remicade. Much of the discussion surrounded questions regarding the interchangeability of biosimilars, and the market barriers to biosimilar use.
Unlike small molecule pharmaceuticals, biologics are large, complex molecules. They are produced using biotechnology to alter living organisms. This manufacturing process results in inherent variations in the biologic, which can present challenges in characterizing the product. These challenges do not exist in the development of small molecule drugs. There is even lot-to-lot variability in biologics produced on the same manufacturing line. Furthermore, biologics can produce undesirable immune system responses in patients, and switching between interchangeable biologics can “prime the immune system to recognize subtle differences in structural features between products.”
Richard Gonzalez, the Chief Executive Officer (“CEO”) of Abbive, the manufacturer of Humira, acknowledged that an FDA-approved biosimilar has no clinically meaningful difference from the reference product. However, noting the risk regarding switching the same patient between interchangeable biologics, he noted that “without clinical data assessing the effects of switching between two biosimilars of the same reference, there is no evidence to scientifically justify interchangeability or automatic substitution between them.”
Jennifer Taubert, the Executive Vice President and Worldwide Chairman of Janssen Pharmaceuticals, the manufacturer of Remicade, also urged caution. She noted that healthcare providers and patients may be hesitant to switch medicines in cases of serious, chronic conditions where many patients have “taken years to become stable on a branded product.” She added that the “goal of biosimilar policy should be to lower costs …, and not simply to encourage biosimilar uptake without regard to price.”
Kenneth Frazier, the Chairman and CEO of Merck struck a different tone. He focused on market conditions that limit biosimilar utilization, and added that Congress should pursue policies that encourage and support biosimilar uptake, including, for example, reducing cost sharing in Medicare Part B. He added that Renflexis uptake was limited due to “physician confusion regarding interchangeability, and “a lack of physician, patient and payer incentives.”
Albert Bourla, the CEO of Pfizer, also highlighted the “adverse incentives” and market barriers to biosimilar uptake. He discussed the “rebate trap” in which pricing penalties, such as the loss of significant rebates, are used to “coerce” insurers into exclusive deals that block biosimilar use.
Increasing the use of biosimilars is a wise area for cost reduction policy initiatives as a Rand Corporation study found that biosimilar use could save the US more than $54 billion over a decade. However, to accomplish this, more work needs to be done to address the interchangeability issue, whether it is justified or merely fearmongering, and to decrease market barriers to biosimilar uptake.