Biosimilars Struggle to Gain Market Share in the U.S., Analysis Shows

Two separate analyses point to difficulties biosimilar manufacturers have had in carving out market share of branded drugs.

Over the past several years, the U.S. Food and Drug Administration has approved a number of biosimilar medications, therapies that have similar properties to a branded drug, but are different in composition, which differentiates them from generic drugs.

The approval of biosimilar treatments has been supported at the highest levels as a means to increase competition in the market and help regulate some of the high costs of prescription drugs. However, despite the numerous approvals of biosimilars, they have not yet gained a significant stake in the marketplace. A recent analysis of the biosimilar landscape in the United States published in Forbes points to several reasons, including the thickets of patent protection some companies, such as AbbVie, have established to protect cash cow drugs like Humira, as well as reticence from some doctors in prescribing those that are available.

In May, the FDA provided its final guidance on the pathway for “interchangeable” biosimilar drugs, which allows for their substitution without the involvement of the prescriber. At the time the guidance was released, the FDA said the rules will provide clarity for developers who want to demonstrate that their proposed biological product meets the statutory interchangeability standard under the Public Health Service Act.” Still, when the guidance was established, there had been no approval of interchangeable biosimilars in the U.S. That could change. For the past two years, Boehringer Ingelheim has been conducting interchangeability studies for a biosimilar to Humira.

Another barrier to increased U.S. use of biosimilars, which are more widely used in Europe, is concern over insurance payments. In its analysis, Forbes said that 40% of payers in the U.S. have no policies in place for conversion to biosimilars, hampered, in part, due to the current rebate system in place. As an example, the analysis in Forbes pointed to approved biosimilars of Janssen’s Remicade. Despite the availability of biosimilars to the Crohn’s disease drug, insurers wildly preferred covering the branded medication.

While it’s been a rocky road for biosimilars in the U.S., there is a fervent belief among some healthcare analysts and activists that increasing the use of these treatments will lead to vast savings. On Thursday, the Pacific Research Institute released a report that shows Americans could pocket more than $71 billion in savings if the use of biosimilars was expanded. But, much like Joshua Cohen who wrote the Forbes analysis, Wayne Winegarden, director of PRI’s Center for Medical Economics and Innovation and author of that group’s analysis, said biosimilars have a small share of the marketplace in the U.S. Only nine biologic drug classes have approved biosimilars, Winegarden said, but, despite this, those biosimilars are currently generating $253.8 million in annual savings. More savings could be generated if those numbers were expanded, he added. Much like the Forbes analysis, Winegarden noted numerous barriers in place, including the “buy-and-bill” method. This, Winegarden said, is when providers purchase medicines and then bill the payers. Providers often lose money when prescribing biosimilars over the originator biologic because reimbursements are based on the sales price of the medication plus a percentage markup, he said.

“Biosimilars are innovative medications that can treat patients at lower costs. Our research shows that as their market share increases, biosimilars can lead to billions in savings for patients, health providers, and taxpayers – while also helping to treat some very serious illnesses,” Winegarden said in a statement.