Introduction
"Biosimilar" medicines are characteristically different from generic medicines because of their molecular size and structure, together with the sheer complexity and cost of their development. For example, a 500mg generic Paracetamol tablet will be identical to that of licensed manufacturers.
Biosimilars are biological medicines that are similar to other existing biologic medicines already licensed and in use. The big difference is that biologic and biosimilar medicines will have much higher research and development costs and the associated risks of successful production involved with their manufacture. They are also more complex to manufacture than regular, small-molecule generics.
Product and pricing
Biosimilars do offer considerable savings, both to patients and healthcare providers alike. But their pricing can be complex and will depend on numerous factors.
Biosimilar medicines require a much more extensive and costly development and regulatory approval process than the standard generic drug. This makes them more expensive. Unlike smaller molecule, mass-produced pharmaceuticals, biologics are developed from living organisms. This means they will have intricate structures which cannot be replicated precisely.
There are numerous factors that have to be considered before a retail price can be confirmed. These include its type, procurement costs of its constituents, costs of indications for usage, and the distribution channel used. Also, the "similar" tag of biosimilar medicines compared with the "identical" tag of traditional generics can affect patient take-up, as patients prefer the latter as a descriptor.
Biosimilars in retail
Inflammatory, chronic conditions, such as rheumatoid arthritis, which are quite widespread, are extensively treated with anti-TNF (drugs that help with stopping inflammation) inhibitors. These are a class of retail biologics. However, these autoimmune conditions can be otherwise quite expensive to treat with biologics where a large population requires support.
As a result, biosimilars are often considered, because their relative cost-effectiveness can allow more people to receive the treatment they need.
In an attempt to encourage the take up of biosimilars, producers can offer incentives to doctors, other qualified prescribers and decision managers.
In the UK, the NHS helped with the implementation of biosimilars from Adalimumab
In France, automatic substitution is allowed and the biosimilar can be substituted at the pharmacy without the prescriber having to be consulted.
In Germany healthcare professional quotas are set to encourage biosimilar uptake.
The opportunities for those manufacturing biosimilars are commercially viable in areas with a large population who are higher payers. In Europe, anti-TNF biosimilars enjoyed a 60% market share.
While the price of biosimilars can be heavily influenced by the rivalry between the original manufacturers and the biosimilar producers, payers expect large discounts on biosimilars, especially anti-TNF products. Price erosion can often also be seen.
As tends to be the case for traditional drugs, when patents expire, cheaper biosimilars can quickly fill the gap. Back in 2018, when Humira's patent expired, it took only six months for 63% of UK patients to switch over to cheaper biosimilars. In some countries, biosimilars to adalimumab achieve a full 100% market share where discounts were as high as an astounding 85%. Other countries witnessed 50%-70% discounts. This meant that in order to maintain some form of market share, Humira was reduced in price by discounts in the order of up to 80%.
Biosimilars for oncology
The European Medicines Agency (EMA) approved 33 oncology biosimilars between 2007 and 2020. This saw discounts of between 10% to 25% to originators. Hospital drugs are usually purchased by a tendering process and can include either International Reference Pricing (IRP) or sometimes a statutory "discount vs. originator" list price. Naturally, money talks, in particular, the saving of it, but sometimes the clinicians involved do input their professional opinion into the tendering procedure. Those prescribing the drugs are also reticent to encourage the introduction of any curative treatment without proven added clinical benefit, especially for high-risk treatments.
Imitator drug manufacturers tend to distinguish their products from that of the original manufacturer by altering the formula. Or they may appear to be seen as bringing more value to their own product than that of the original. An example is the subcutaneous trastuzumab offered as a direct substitute for intravenous in breast cancer treatment.
However, for this to be successful, physicians and key opinion leaders have to communicate this successfully with patients so as to encourage successful uptake. They also have to encourage the prescription of their products through the use of incentives such as supporting patients, offering research grants and other informal support that garners interest.
Biosimilar orphans
A biosimilar orphan is defined as "one that prevents, diagnoses or treats a rare disease or condition". The costs of developing these drugs have been conservatively estimated at between $40-50 million. And certainly, in Europe, there are only around 12% of the current 42 designated biologic orphan drugs that have a commercial market impact in excess of €100 million annually. With the discounts expected (around 20-30%), and economic return for the manufacturers can be very difficult, especially in regions where patient numbers are finite and small.
Original orphan drug manufacturers tend to generate a loyal customer base. With the extra lead time required to produce and patent them, this enables a strong connection to be established between the manufacturer and key opinion leaders. This gives them a substantial advantage before biosimilars can come to market. Soliris (eculizumab) from AstraZeneca is a perfect example of this. And with some of these originals, where the drug companies improve their products with, for example, improved and more convenient dosing, patients may indeed prefer these to the older biosimilars. Ultomiris (which has been designed for the treatment of atypical haemolytic uremic syndrome and paroxysmal nocturnal haemoglobinuria) from AstraZeneca, is an example of this.
In conclusion
As far as those paying for the drugs are concerned, cost savings for healthcare providers and patients is paramount, biosimilars provide valuable access to medicines globally and provide millions of patients with crucial medication. It is one of the key drivers of the biosimilar market, especially where substantial discounts, or for that matter, erosion of price are considered. As mentioned, yes, oncology and orphan drugs are not as discounted where familiarity tends to breed intent with the prescriber, who tends to stick with what they are reliably familiar with.
Competitors and local policies all play a major part, but it is very much up to the biosimilar manufacturer to have a firm understanding of any market they are considering when it comes to pricing.
