What Should the Supply Chain Expect?

Biosimilars are poised to become a major weapon against medical costs within the next few years. As directed by the Biologics Price Competition and Innovation Act, which was part of the Patient Protection and Affordable Care Act, the U.S. Food and Drug Administration was to have an approval process for biosimilars in place by 2014.

The FDA is working on standards for approval. Once the agency finalizes its regulations, the biologics industry will move quickly to begin the approval process and make biosimilars widely accessible.

“The biosimilars market is primed to take off, as the generic drug market did after the 1984 Hatch-Waxman Act,” says Kara Fortune, PharmD, BCOP, director, Clinical Integration at HealthTrust.

Biosimilars are new, affordable versions of costly brand biologic medicines used to treat cancer, immune disorders and other complex diseases. Soon, they could become the fastest-growing sector of biologics, thanks in part to a raft of expiring patents on original biologics over the next five years and the FDA approval process, according to IMS Health Inc.

IMS Health Inc. projects that sales of biosimilars are expected to reach between $1.9 and $2.6 billion by 2015, from well under $1 billion in 2011.

Other factors fueling this growth include the anticipated introduction of new biologics in Europe and the first-ever use of biosimilars to treat cancers and autoimmune diseases.

Estimates vary: IMS Health Inc. projects that sales of biosimilars are expected to reach between $1.9 billion and $2.6 billion by 2015, from well under $1 billion in 2011. VisionGain predicts far faster growth—reaching about $9 billion by 2015 and $50 billion by 2021.

This rapid growth curve actually promises significant savings. Biologics are extraordinarily expensive. Express Scripts projections show that the U.S. healthcare system would save $250 billion from 2014 to 2024 if biosimilar versions were available for just 11 of the most widely used biologics, according to the Generic Pharmaceutical Association (GPhA).

With so much at stake, it’s not surprising that certain companies that developed many of the original biologics are trying to significantly restrict or stop the use of biosimilars.

In addition to opposition at the federal level, Genentech and Amgen have urged state legislatures to impose restrictions on substituting biosimilars for their original counterparts.

So far, only North Dakota has passed the bill as drafted by the companies. Virginia and Utah passed amended versions with sunset clauses that will render the restrictive sections moot before biosimilars come to market, according to the GPhA.

AbbVie, meanwhile, has asked the FDA not to approve any biosimilar for its Humira treatment for rheumatoid arthritis. AbbVie says that it supplied trade secrets to the FDA as part of the Humira approval process, and that the FDA would illegally have to reveal those trade secrets in order to evaluate a biosimilar. If AbbVie prevails, Congress likely would have to completely overhaul the legislation that established the approval process.

Hurdles Ahead

Besides legal challenges, opponents of biosimilars will deploy their reps to argue against using the new pharmaceuticals whenever they become available.

Biosimilars are not generic drugs as most people define the term, Fortune says. 

Traditional drugs and their generic forms are chemical compounds and are sometimes referred to as “small molecule” substances, while biologics and biosimilars derive from living matter and are often described as “large molecule” substances because of the size of the basic genetic structure.

Biosimilarity means “highly similar” to the pioneer or innovator product, with no clinically meaningful differences in terms of safety, purity and potency between the original and the biosimilar, though there may be minor differences in clinically inactive components.

The process of making biologics is complex, and it’s been argued that generics manufacturers won’t be able to master the technology. While the techniques are sophisticated, the technology is readily available, well understood and very reliable, Fortune says. The science, techniques and equipment have changed tremendously in the last 30 years since Genentech and Amgen first released their recombinant products on the market.

Makers of biosimilars will use a multitude of sophisticated assays to demonstrate to the FDA that their biosimilar products are similar to the originals from a molecular structural aspect.

For example, they must prove their products are indeed “biosimilar.” Biosimilarity means “highly similar” to the pioneer or innovator product, with no clinically meaningful differences in terms of safety, purity and potency between the original and the biosimilar, though there may be minor differences in clinically inactive components.

“FDA approval will mean the drug has been tested and proven to have lived up to this definition,” Fortune says.

Because biologics are produced from living cells, it is a messy process that produces a lot of useless byproducts, Fortune notes. Even after sophisticated filtration procedures, the final lots may not be as homogeneous as desired.

Biosimilar Readiness Plan

HealthTrust recommends that members take the following steps to be ready for the biosimilar transition:

  • Review biosimilar educational materials on the HealthTrust member portal.
  • Develop a proactive plan for the introduction of biosimilars into routine health system pharmacy practice, including an approach to transition of care.
  • Engage a physician champion (hematologist or oncologist preferred).
  • Ensure administration, physician and nursing committee support to help drive pharmacy and therapeutics (P&T) approval.
  • Prepare your P&T decision-making process. Points to cover include:
    – Relative efficacy and safety
    – Approved and non-approved indications
    – Dosing equivalence/conversion (i.e., insulin, IVIG, epoetin)
    – Nomenclature/information system implications
    – Consideration of prescription benefit plans. Plans will likely use patient financial incentives to drive use of biosimilars.

The sensitivity of a biologic manufacturing process to any slight change can be enormous, causing impurities that can affect performance. And the presence of impurities can be very subtle and may not be detected by even the most sophisticated assays available now.

However, this problem holds both for the makers of the original biologic and also for makers of biosimilars, Fortune says. “Both have to prove similarity from lot to lot. In fact, it is an accurate statement that the Epoetin alfa used today is not the exact same epo used by your parents. It is similar based on allowed margins of differences in the assay testing and structural analysis.”

Next, biosimilar manufacturers will have to show their products are interchangeable with the originals. This means that a biosimilar product can be administered more than once to an individual and the risk (in terms of safety or diminished efficacy) of alternating or switching between the biosimilar and the original is no greater than the risk of using only the original.

“It likely will be some time before the FDA grants the interchangeable designation to a product. I don’t expect we will even see guidelines out of the FDA for interchangeability until sometime in 2015,” Fortune says.

Getting Ready

The various legal challenges, twists and turns are only beginning. But, barring a complete collapse of the FDA’s efforts, biosimilars may begin to go through the FDA approval process within the next two to three years.

Most expect the FDA will go slowly to ensure a minimal risk position. However, the FDA has great latitude in determining what will be considered necessary for approval, and the requirements will undoubtedly evolve over the next decade.

When prescribing, physicians will have the option to indicate whether biosimilars may be substituted. Pharmacists must help assure safe and effective utilization of biosimilars and should lead educational efforts with healthcare providers and patients, Fortune says.

Don’t expect immediate “generic-like” savings on competing biologics. The barriers to market are very high, and the number of competitors will be few. Estimated savings from current prices will be in the range of 10 to 30 percent. A prepared, well-informed GPO membership will be key to driving top savings in the U.S. market.

HealthTrust recognizes the cost savings opportunity the market introduction of biosimilars/competitive biologics will potentially bring to the membership. As a result, it proactively educated and aligned its membership in preparation for the launch of these productsThe Biosimilars/Competitive Biologics Initiative is based on optimizing both clinical and financial outcomes with the use of these agents. For HealthTrust to optimize utilization and savings of these product entrants, it will be essential that member facilities are fully engaged in educating and preparing their clinicians and corporate leadership to fully optimize the value of this emerging market opportunity.

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