Back in 2010, the FDA implemented the Biologics Price Competition and Innovation Act (BPCIA) as part of the Affordable Care Act (ACA), which created an abbreviated pathway for biosimilar drug approval.
Despite this, it still took five years for the first biosimilar to be approved by the FDA, and there are only nine biosimilars available on the market in the US to date. As a result of this slow entry into the market, it is estimated that only 3% of spending on biologics may face competition from biosimilars. So why are biosimilars struggling to enter the market despite the BPCIA?
A superficial detail that presents an educational barrier is the recent biosimilar naming system employed by the FDA. They require the biosimilar to include the non-proprietary name and a suffix that identifies the manufacturer in order to improve pharmacovigilance, but this results in confusion for physicians and patients who might be led to believe that the clinical effects of the biosimilar differ from the original product. Without a meaningful education drive, biosimilars are likely to be dismissed as less effective than their reference products, which physicians are more experienced and comfortable using, and so the financial incentive for entering the biosimilar market is significantly reduced.
Another barrier reducing financial incentive is the tendency of pharmacy benefit managers (PBMs) to continue favouring the original product over the biosimilar, despite discounts. This is because the initial discounts on biosimilars of 15–20% are offset by the likely small population of patients being initially moved to the biosimilar. As a result, biosimilar sponsors are unable to offer large patient volume-based rebates on their products and PBMs therefore try to limit biosimilar uptake so as to maintain rebate payments. Moreover, manufacturers of the reference product often instigate ‘pay-to-delay’ schemes disguised as rebates or contracting provisions to PBMs to prevent the biosimilar entering the market.
Expensive and complex manufacturing
On top of lacking financial incentives to use biosimilars, manufacturing a biosimilar that is interchangeable with its reference product is no easy feat. A biosimilar designated as interchangeable can replace the reference biologic at the pharmacy without the permission of the prescribing physician, but FDA draft guidance from January 2017 means biosimilar manufacturers may have to conduct additional clinical studies to demonstrate that “the risk in terms of safety or diminished efficacy of alternating or switching between use of the biological product and the reference product is not greater than the risk of using the reference product without such alteration or switch.” Due to the difficulty of conforming to the FDA’s guidance, no biosimilar has yet been designated interchangeable as of April 2018.
In comparison to the relatively straightforward manufacturing process of generic small molecules, the manufacturing process of biosimilars is much more expensive and complex. Reference product producers tend to be secretive about their manufacturing practices even after patent expiry, delaying biosimilar development. Furthermore, biologic products are difficult to characterize, unlike small molecules, which can be characterised by analyzing their end products. The process is not as simple for biologics and so biosimilar manufacturers may struggle to replicate the reference product even with a sample of the biologic.
In spite of all these barriers, the FDA seems to be taking proactive measures to ensure the continued growth of the biosimilars market in the US by educating patients and physicians through online resources and information campaigns. In time, these measures should encourage what the BPCIA originally set out to achieve: more competition and lowered prices of biologics.