Save money with biosimilars

Monday, March 27, 2017
3.5   based on 9 votes
Get More from Your Benefits, Understanding your drug coverage

Save Money with Biosimilars

Will Biosimilars Rescue Your Drug Plan from Rising Drug Costs?

Biologics are the fastest growing segment of the pharmaceutical market. In 2015, they accounted for over 20% of the total expenditure of Canadian private drug plans1. Biologics are complex drugs made of proteins derived from living organisms and then manufactured through biotechnology. They are very important therapies in treating conditions like rheumatoid arthritis, inflammatory bowel disease, anemia, skin conditions, cancer and rare diseases. Being a protein, biologics must be administered by injection because they are ineffective when taken orally.


What are Biosimilars?

In Canada, biologics have dominated the market and not faced competition until recently. Biosimilars, also known as subsequent entry biologics, are lower cost versions of biologics. Once an originator biologic is no longer under patent protection, biosimilars can be manufactured. Similar to a traditional (non-biologic) drug, generic versions can be produced after patent expiry of the reference (originator) brand.


What Will the Savings Be?

Biosimilars are more complicated than traditional chemical-based drugs. Since they are complex living organisms, making a replica isn’t easy. While they will be cheaper, the percentage discount will not be as significant as with generics (see Table 1). However, the amount saved is still substantial given their high cost. In the United States, savings are estimated to be in the billions if simply new patients are put on less costly biosimilars. Remicade™, a reference brand, had global sales of $7.19 billion in 2011. In Canada alone, private drug plans spent nearly $342 million in 2015 on Remicade1.


Biosimilars in Canada (Table 1)

Biosimilar Reference Brand Therapeutic Use Cost Difference BC Pharmacare Listing
Biosimilar Reference Brand
Inflectra™ Remicade™ Autoimmune conditions 47% Yes Only for existing patients
Grastofil™ Neupogen™ Increase white blood cells 17% Yes Only for existing patients
Basaglar™ Insulin Lantus™ Diabetes 15% No Yes
Brenzys™ Enbrel™ Autoimmune conditions 25% *New patients for RA and AS Existing patients and psoriasis patients

* RA = Rheumatoid Arthritis, AS = Ankylosing Spondylitis


Selected biologic patents due to expire in Canada by 20202 (Table 2)

Drug Brand name Patent Expiry Date Therapeutic Use
Adalimumab Humira™ Feb 2017 Crohn’s, rheumatoid arthritis, psoriasis
Bevacizumab Avastin™ Apr 2018 Cancer, eye diseases (off-label)
Ranibizumab Lucentis™ Apr 2018 Eye diseases
Rituximab Rituxan™ Aug 2020 Rheumatoid arthritis, cancer, autoimmune conditions
Trastuzumab Herceptin™ May 2021 Cancer
Pegfilgrastim Neulasta™ Jul 2024 Supportive treatment for cancer

Why is there a slow adoption rate for biosimilars?

  1. Lack of interchangeability between the reference brand and biosimilar

    This is a big barrier. For traditional drugs, the reference brand and generic are considered identical and, as a result, interchangeable by the pharmacist without authorization by the physician. However, Health Canada’s guidance document on biologics states that biosimilars are “similar” but not declared to be “equivalent” with the reference brand drug. The authority to declare two drugs automatically substitutable by a pharmacist does not rest with the federal government, but with the provincial regulatory bodies. Currently, none of the provinces have made them interchangeable.

  2. Patient and physician acceptance
    When traditional generics were introduced in the 1980s, there was skepticism and the uptake was initially slow3 . Today, as soon as a generic version is available, Pharmacists choose biosimilars for patients almost immediately. As we are charting new territory with biosimilars, there are some concerns:
    • Safety: An approved biosimilar and its reference brand are expected to have the same safety profile. Clinical studies performed for the biosimilar must demonstrate similarity in this regard. To date, there have not been any biosimilars withdrawn from the market because of safety concerns.
    • Education: A survey was conducted in late 2015 by the Biosimilars Forum to assess the knowledge and perception of biosimilars among American specialists who commonly prescribe biologics. The results indicated there is a need for more evidence-based education about biosimilars before they are comfortable choosing biosimilars for their stable patients4.
  3. Government
    • Price: Pricing negotiations for the provincial drug plans are conducted through the pan-Canadian Pharmaceutical Alliance (pCPA). Through its mandate of increasing patient access to clinically and cost-effective drug treatments, the pCPA will encourage a competitive environment to support biosimilar market growth and sustained price reductions that are transparent to all Canadians, including private drug plans.
    • Provincial Listing: BC PharmaCare will continue to add biosimilars to the formulary. For the time being, patients already on the originator product may continue to get the reference brand.

What are the next steps?

There will be savings by preferentially listing the biosimilar for new patients going forward. However, it will be even greater when current patients on the reference brand choose biosimilars, especially since most of these are chronic, ongoing therapies. By the time a biosimilar is launched, the reference brand has been on the market for more than 10 years.

The results of the highly anticipated study from Norway, Nor-Switch, have been presented. It demonstrated that choosing biosimilars for patients instead of the reference brand, Remicade™, to the biosimilar is not inferior to continued treatment with the brand. However, some physician groups are still urging caution against choosing biosimilars for all patients in every instance. Despite this, public and private payers may implement policies that mandate choosing biosimilars for patients instead of the reference brand in carefully selected individuals.

As real world evidence continues to confirm the safety and effectiveness of biosimilars, physicians will feel more comfortable about prescribing biosimilars. However, can payers afford to wait while opportunities for savings pass by? Without competition from biosimilars, biologics will not lower their prices. But for biosimilars to stay in the Canadian market, they need to have a market and not simply be used as leverage for payers to negotiate lower pricing for the reference brand on the back end.

In 2017, Pacific Blue Cross is building a strategy to support the use of biosimilars under the following conditions:

  • There is evidence supporting similar clinical efficacy and patient safety
  • It is cost effective compared to the originator brand
  • It is eligible with BC PharmaCare so that coordination of coverage with the government is possible



1 QuintilesIMS Canada
2 Canadian Agency for Drugs and Technologies in Health, Environmental Scan, Jan 2014 (Issue 43)
3 Berndt E et al. Brand loyalty, generic entry and price competition in pharmaceuticals in the quarter century after the 1984 Waxman-Hatch legislation. Int J Econ Bus.2011; 18(2): 177-201
4 Cohen et al. Awareness, knowledge, and perceptions of biosimilars among specialty physicians. Adv Ther 2016;33:2160-2172.

How did we do?

Not
helpful
1 2 3 4 5 Very
helpful