The use of biosimilar products in lieu of originator biologic products has been a hot topic of discussion since the first FDA approval of Zarxio (a biosimilar for Neupogen) in 2015. Since then over 30 new biosimilars have been FDA approved but the biosimilar market hasn’t taken off as expected. The slower than expected uptake of biosimilar usage could be attributed to a number of factors including lack of prescriber education on how a biosimilar compares to an original reference biologic, lack of interchangeability options available, and because the biosimilar has not been given the same coverage for FDA approved indications as the original biologic. It’s estimated that $38.4 billion will be saved from biosimilar usage between 2021-2025 and there are 38 new biosimilars in the pipeline1. The recent approvals of interchangeable biosimilar drugs could be the catalyst that heats up the market’s palatability for switching to a biosimilar.
In July 2021 the FDA approved the first interchangeable biosimilar Semglee (insulin glargine-yfgn), which can be substituted for Lantus as a long-acting insulin treatment for diabetes. In 2023, the second approved interchangeable biosimilar will be launched into the market with the release of Cyltezo, which will be interchangeable for Humira. Cyltezo will be the first of up to at least 12 different biosimilars for Humira that are FDA-approved and set to be released in the marketplace starting in 2023. This is anticipated to have a huge impact on the price of Humira, a specialty drug that grossed over $20 billion in 2021.
There will be fierce competition between AbbVie and competitor manufacturers of biosimilars as the Humira biosimilars and interchangeable biosimilar products start launching in 2023. The battle for market share is expected to positively impact payers by lowering costs.
Here are 5 factors that could reduce payers’ costs:
- Lower net costs
It is likely that increased competition will result in overall lower net cost. With biosimilars attempting to take market share from Humira we will likely see downward pressure on ingredient cost and the potential for higher rebates. - Bundling of rebates
Manufacturers may seek to bundle drug rebates for drugs within their portfolio to entice a payer to continue driving Humira utilization or in driving new utilization through a biosimilar manufacturer’s drug portfolio. If true therapeutic value is available for a bundled set of drugs with their associated rebates, then net costs should go down while still providing quality therapeutic options. - Prescriber detailing
There will be an aggressive drive for AbbVie and the biosimilar manufacturers to devise a tactical provider sales strategy around reasons for continuing use with Humira or why one’s members should want to switch to a Biosimilar. Obtaining prescriber buy-in around biosimilar efficacy, along with cost savings, could help biosimilars gain market share in the US. - Formulary positioning
Heading into 2023 it appears that Humira and at least some of the Humira biosimilars, could be co-preferred for many of the payers who may not choose a Humira-only or biosimilar-only strategy. In the past couple of weeks, we have seen one of the Big Three, OptumRx, declare that in 2023, they will prefer three Humira biosimilars, at parity with Humira on their formulary. In 2024, there will most likely be more shifting in adding Humira biosimilars to formularies where they were not preferred in 2023. - FDA indications
Humira has coverage for 12 indications, but over time, many of the biosimilar manufacturers could receive approval for the same indications as Humira thus leading to more of a focus on the overall net cost of the drugs. For 2023, many of the Humira biosimilars will still be seeking full approval for many of the indications Humira has access to. As a result, Humira biosimilars may not see a significant jump in growth, until 2024 and thereafter.
Source: 1. https://www.centerforbiosimilars.com/view/study-biosimilar-savings-through-2025-could-total-38-4-billion
