Europe is way ahead of the U.S. in biosimilar approvals and establishing a sustainable competitive marketplace, and it is not clear that the U.S. can even catch up. But over-protecting the U.S. originator market may hurt the next generation of innovators.
To prevent this, regulators including the FDA can take steps to advance the public perception of biosimilars and ease the path to creating them, and thereby help competition without prejudicing anyone.
Biologic medicines have made it into the headlines due both to their stunning successes and their high prices -- tens to hundreds of thousands of dollars per patient -- and the billions earned by their sponsors.
Biologics include game-changing immuno-oncology and gene therapies, but also treatments that have been available for years, such as insulins, hemophilia factors and decade-old drugs for rheumatoid arthritis, multiple sclerosis and cancers.
Data from the Congressional Budget Office show the expected savings from biosimilars after the expiration of biologics’ patents has not happened in the U.S. Moreover, it likely won’t without significant changes to our healthcare system.
“If the U.S. does not solve its reluctance to use biosimilars, U.S. payers and citizens will continue to pay more.”
Yet, in Europe, progress towards a multisource, competitive market is accelerating with the approval of multiple biosimilars. In a review of 90 peer-reviewed publications, we found patients who switched to these lower-priced drugs showed no change in clinical outcomes.
This disparity between the U.S. and Europe extends well beyond the obvious, to the innovation of therapies that appear unrelated. That should matter to everyone, even those with seemingly great access to care.
Sidebar: THE BROKEN HIGHWAY
The price of failure
The barriers in the U.S. against biosimilars appear overwhelming. Challenges include the FDA, patent law, payer financial incentives, drug store rules, and even naming conventions (see Sidebar: “A Broken Highway”).
Meanwhile, the European Commission has systematically and successfully promoted the use of biosimilars with financial incentives to create competition and choice. The EC has also developed educational materials that specifically explain biosimilars for stakeholders most impacted by their availability, including payers and patients.
This encourages faster uptake of biosimilars in Europe, with each country using its local purchasing mechanisms to enable the use of the cheaper products, thereby increasing access. International experience is unambiguous that biosimilars show the same clinical outcomes as their reference biologics.
If the U.S. does not solve its reluctance to use biosimilars, U.S. payers and citizens will continue to pay more. An even worse result is that barriers to biosimilars will delay or kill the promise of personalized medicine.
If cheaply mass-produced biosimilars fail in the U.S., we can never afford to mass-customize tailored treatments without further fragmenting healthcare into haves and have-nots.
Today success is stochastic and not personalized
The promise of personalized medicine is to tailor treatment to each patient, which will improve success rates by limiting therapies only to patients who stand to benefit. This contrasts to past successes, which were based on treatments that work for enough patients, but usually not all patients.
Historically, the success of medicines was stochastic. For example, breakthroughs such as treatments of infectious diseases do not work for everyone, but bring a favorable risk/benefit to society as a whole.
This collective public health view found its way into the workings of FDA and CMS. For example, FDA’s mission includes the phrase “to protect and promote the public health.”
CMS scores hospitals on population-level rates of adverse events, such as readmissions. CMS scores Medicare Advantage plans on preventive services, such as vaccinations or screening mammograms. However, even systems with very high quality scores do not produce great outcomes for everyone.
Insurance and drug company financial models also accommodate this stochastic success of treatments.
“U.S. obstacles to biosimilars will be even worse for personalized medicine in many ways.”
Pharmaceutical companies sell drugs knowing that many or even most patients will not benefit. Therapy today is a personalized experiment because we rarely know in advance which drug is best for each patient.
Step therapies may land on the right drug after failed attempts with other treatments, but trial-and-error can be inefficient or even too late for some.
Insurers also manage fluctuation risk, such as influenza epidemics, and have programs to support population health.
Both accept the unpredictability for individuals within a more predictable population outcome. The stochastic model currently works for society.
Will mass-customization happen if it is too expensive?
The healthcare system of the future will more quickly diagnose patients and get them the best treatment with fewer mistakes. This may include customized prevention of non-infectious disease, such as some cancers, and therapeutic vaccinations.
Matching available therapies to the person, by genotype and/or phenotype, and to the disease, by pathogen or mutation, can bring the right medicine to the right patient the first time they are treated -- avoiding today’s step-edit or personalized experimentation.
In the future, the mass customization of personalized medicine may mean that we can tailor treatments and even fix genetic and epigenetic problems within this generation and add to future generations’ individual and national wealth.
However, making drugs targeted to precisely defined patients could reduce the potential market for each drug to the small size of Orphan drugs.
Such drugs command high prices, often over $100,000 per patient. “Financial toxicity” is already essential to oncologist-patient discussions alongside the biological toxicity of their chemotherapy.
If mass customization means “orphanizing” disease, such personalized medicines will become unaffordable, and breakthroughs may never happen unless, implausibly, other parts of healthcare or the economy make sacrifices to provide financial subsidies.
“FDA should articulate that interchangeability is a designation to enable pharmacy substitution and is not relevant to physician prescribing.”
Current development costs and prices of medicines, along with the other obstacles biosimilars face, could make mass customization impossible. Ironically, this is happening just as the science that is so promising for mass customization -- such as cell and gene therapy, and immunotherapy -- is beginning to show its potential. But mass customization cannot happen unless manufacturers can deliver drugs to each patient quickly and cheaply.
Inexpensive biosimilars in Europe demonstrate that development and production costs can be low -- all essential for mass customization.
But U.S. obstacles to biosimilars will be even worse for personalized medicine in many ways.
Each patient’s medicine will be different, but FDA has not publicly embraced acceptable variation for even current complex medicines.
For biosimilars, there is already an established comparator biologic -- sponsors know what they are making. By contrast, personalized medicines’ value is that they vary from patient to patient.
One path forward for both biosimilars and mass customization would be for the FDA to be more transparent about acceptable variations for both medicines and patients.
Where has U.S. leadership and innovation gone?
Today, expensive, decades-old products dominate U.S. spending for some diseases and can quash lower-cost competitors such as biosimilars.
The EU’s leadership on implementing biosimilars is impressive, but having the U.S. take a vacation from innovation is certainly not in the U.S.’s or EU’s interest.
Traditionally the U.S. has carried a disproportionately heavy load in original research. But investors with U.S. interests are leery to fund the innovation required for low-cost biosimilars and the associated efficient manufacturing capacity, because of the numerous barriers in the U.S.
Furthermore, if global biosimilars sponsors are unable to access the U.S. market at all, this will reduce sponsors’ ability to leverage investment efficiently in any market, on any continent.
The path forward means recognizing we are on the wrong road
We believe that the FDA wants a viable biosimilars market, but it needs to move faster so as to not further squeeze biosimilar pipelines.
Here are some quick fixes: the agency can counter misinformation about biosimilars being inferior. FDA should articulate that interchangeability is a designation to enable pharmacy substitution and is not relevant to physician prescribing.
However, much more important is “right size regulatory” for all complex medicines, meaning the agency should stop requiring non-decisional data. For biosimilars, this includes unnecessary analytical bridging studies of reference products, and “feel-good” clinical studies that do not contribute to regulatory decisions.
Starting today, FDA could also promote change within HHS and the general public by supporting use of biosimilars in the manner for which they are approved. Specifically, the agency should make clear that there is no meaningful clinical difference between the biosimilar and the reference product; it can be used by any prescriber irrespective of having an interchangeability designation, and patients can be safely switched.
Health is not a zero-sum game, and the incredible advances in science in which society has invested so much should inspire us to help more patients, sooner rather than later, both individually and collectively. Let’s do it now.
Bruce Pyenson is principal and consulting actuary at the actuarial, risk and healthcare consultancy Milliman Inc. Gillian Woollett is SVP at healthcare consultancy Avalere Health.
Guest commentaries reflect the views of the author, not necessarily those of BioCentury.
Companies and Institutions Mentioned
Avalere Health, Washington, D.C.
Centers for Medicare & Medicaid Services (CMS), Baltimore, Md.
Milliman Inc., Seattle, Wash.
U.S. Department of Health and Human Services (HHS), Washington, D.C.
U.S. Food and Drug Administration (FDA), Silver Spring, Md.
World Health Organization (WHO), Geneva, Switzerland