The Great Potential of Biosimilars in Lowering Drug Costs

Innovations in technology and science are changing the way health care is delivered every day. Learn more in this Cal Broker article by Philip Carroll, VP of Sales and Account Management.

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The Great Potential of Biosimilars in Lowering Drug Costs

By Philip Carroll, Vice President of Sales and Account Management

The following article appears in the May 2022 issue of Cal Broker magazine.

Across the country, households are struggling to keep up with skyrocketing healthcare costs, which can reduce access to care, deplete retirement savings and even cause bankruptcy.

Leading the way as the biggest expense are prescription drugs. As one of the costliest areas of health care, $345.7 billion was spent on prescription drugs in 2019, with that number expected to climb to a new high by 2021, with approximately 46% of the U.S. population using at least one prescription drug within a 30-day period, according to the National Center for Health Statistics.

But poor health outcomes due to cost doesn’t have to be the path forward. New innovations in technology and science are changing the way health care is delivered every day, with advancements in treatment and prevention options helping improve outcomes while lowering costs.

As a pharmacy benefit manager (PBM), we play a role in making innovative options available for patients that deliver high-quality care and constrain prescription drug cost growth. From new technologies and science and the potential of new drugs on the market, we look at everything to guide employers on how they can best serve employees.

One trend we think holds great promise in lowering drug costs is biosimilars. These are medical products that are highly similar to already approved biological medicines, Biosimilars offer cheaper options to drugs that are traditionally more costly, with no clinically meaningful differences in safety, purity, and potency.

Biosimilars first came onto the scene in 2015, when the FDA approved Sandoz’s Zarxio, a drug used in cancer patients to decrease incidences of infection while undergoing myelosuppressive chemotherapy. Their hope shone a bright light on a potential new era of prescription drugs, one in which the cost of innovation wouldn’t get passed to consumers’ pocketbooks. Yet, despite their potential, biosimilars have been met with challenges.

For the last five years, response from providers, payers, and other health care stakeholders has been lukewarm, with negative exposure due to legal action filed against biosimilar manufacturers by innovator companies, cooling their excitement. However, we are beginning to see positive momentum in the market, with 28 approved FDA biosimilars available today.

More than half of biosimilars launched in the United States were taken to market in the past year, with three competing against anti-cancer-drug heavyweights. Additionally, a handful of big brand and generic manufacturers are now getting into the market with biosimilar programs of their own.

Health care leaders and PBMs should pay special attention to what happens next. The potential of biosimilars to improve outcomes and lower costs is a powerful combination.

A good example of a biosimilar’s potential to improve outcomes while lowering costs is in the area of arthritis care. The drug Humira, a commonly prescribed medication, and one I see in a majority of employers top 10 plan paid lists, typically costs $5,800 for a supply of two kits. However, the FDA has approved six biosimilars for Humira, the most recent approval being Hulio earlier this year, which will bring a more affordable treatment option to 23% of all adults—over 54 million people—living with arthritis.

One challenge PBMs and health care companies may face as they work to increase biosimilar adoption is health literacy. General knowledge gaps among health-care providers and patients alike has inhibited awareness and adoption, with questions around safety a big concern. However, it needn’t be. While fear of biosimilar’s newness may make some partners skittish about putting their own brand equity behind them, biosimilars have gone through the same process that any other drug approved by the FDA has gone through. Companies can, and should, use their platforms and credibility to help educate through health-care provider and patient education programs.

It is possible to transform the drug market to one that is a high outcome and lower cost, however, I believe all players must be willing to consider new approaches to the model. We must be driven by the potential of innovation and science. PBMs can use clinical and analytical data around both traditional drugs and biosimilars to determine which drugs to include on their formularies. And while rebate programs have been an incentive to PBMs in drug selection, efficacy and cost should be explored in tandem.

Science has always driven healthcare and moved the field forward. Biosimilars could change the business model of drug pricing and serve as a real calamine to soaring healthcare costs. With affordable options that provide results, biosimilars could provide affordable options to clients and, at the end of the day, offer much-needed respite for consumers.