Economic Implications of Biosimilars in Oncology

Caroline Helwick

December 2011, Vol 2, No 7 - Drug Updates

Alternative versions of biologic agents—biosimilars—will be coming soon to a formulary near you. In the meantime, many details must be worked out before patients can be safely and effectively treated with these new products.

Gary H. Lyman, MD, MPH, an oncologist and the Director of Comparative Effectiveness and Outcomes Research, Duke University School of Medicine, Durham, NC, and his colleague Bradford Hirsch, MD, recently published an article on biosimilars titled “Are Biosimilars Ready for Primetime in the United States?” (Hirsch BR, Lyman GH. J Natl Compr Canc Netw. 2011;9:934-942). Dr Lyman discussed this issue with Value-Based Cancer Care.

Biosimilars Coming Soon to Cancer
Care Biosimilars will enter the marketplace as patents for many cancer agents near expiration. First among these are the hematopoietic growth factors and erythropoietin, but active treatment agents will follow. The process has already started in Europe, where the first monoclonal antibody is expected to be rituximab (Rituxan). Teva Pharmaceuticals announced it has an agent set to begin clinical trials in anticipation of rituximab’s patent expiration in 2013.

The European Union in 2004 introduced a new regulatory path for biosimilars; approval will be a stepwise process that is similar to the approval of traditional biologics. In the United States, however, the US Food and Drug Administration (FDA) has not yet finalized a biosimilar path, for which many believe that better analytic tools (such as new laboratory techniques) are needed to characterize critical aspects of biosimilars.

“We are still waiting for final FDA rules on what will be required for approval,” Dr Lyman said. Companies are moving ahead in Europe and are submitting applications in the United States based on anticipated requirements, “but these will not be acted upon until FDA regulations are ap – proved and implemented.”

The FDA is expected to finalize its regulations regarding biosimilars by the end of this year, which means that some biosimilars could emerge on the market by early next year, unless new clinical trials are mandated. And the requirement for new clinical trials would mean an “enormous investment, especially if the goal is to bring down the cost of drugs,” Dr Lyman said.

Huge Economic Implications
The economic implications are huge: nearly $67 billion was spent on the top 20 biologics in 2009, of which 6 are routinely used in oncology—rituximab, trastuzumab (Herceptin), bevacizumab (Avastin), epoetin alfa (Epogen, Procrit), pegfilgrastim (Neulasta), and darbepoetin alfa (Aranesp). “These are a big part of what insurance companies are paying out,” Dr Lyman noted.

Because of the complexity of their production, biosimilars are unlikely to achieve the price discounts of generics, according to Dr Lyman. It is estimated that bringing a biosimilar to market will cost between $10 million and $40 million and take 6 to 9 years compared with the $1-million to $2-million cost and 3-year process for generics.

It is expected, therefore, that biosimilars will be marketed at 20% to 30% the cost of the original products— whereas generics are sold at about a 75% discount.

“However, even a 20% discount on the $66 billion spent in 2009 on the top 20 biologics is substantial,” he noted. The US Congressional Budget Office estimates that biosimilars could save consumers an aggregate of $25 billion per decade.

“These drugs are not ready at the moment, but there is going to be big pressure among payers to find ways to encourage their use,” he predicted. “The hope is that the presence of biosimilars in the marketplace will drive down the cost of the entire class of drugs, that is, that the cost of the originator drugs will also drop.”

The originator product will probably always have the market share and will command more dollars, backed by more extensive research and clinical experience, he acknowledged. “But if the cost is 2 to 4 times that of the biosimilar, and there is no evidence that they are significantly different clinically, then the originator product will lose market share,” he predicted. “I think biosimilars will gravitate into use and prices will come down, but not as substantially as for the generics. There is too much up-front cost in development.”

Biosimilars versus Generics
Generics must prove their bioequivalence by showing that the active substance and characteristics of an agent are similar to its predecessor (the pharmacokinetic range must be 80% to 125% of the original, according to Drs Hirsch and Lyman). Since generics can be produced with some consistency, large clinical trials are often unnecessary, the article states.

The case of biosimilars is more complicated. It is uncertain that a given biosimilar is the “same functional entity” as the originator compound. Pharmacokinetic equivalence does not ensure “comparability,” and inherently, there are variations in the development of biosimilars, which may not result in clinically meaningful differences but may affect the immunogenicity or other important attributes of the newer product. The development of these products is more difficult, and the approval process will be more stringent, probably requiring more extensive clinical testing.

“Whether they will be required to show comparability or true interchangeability remains to be seen,” Dr Lyman added. Interchangeability is a more stringent requirement, mandating that the new agent provide the same clinical result in any given patient. “Clearly, this is a high bar.”

Payers’ and Physicians’ Dilemmas
Payers will be “torn in 2 directions,” Dr Lyman predicts. They will want, and need, to bring down the cost of treating cancer. But they will resist any notion of promoting a “subpar product.”

“Also, how quickly and to what extent providers and hospitals will embrace biosimilars is unclear,” Dr Lyman added. Pharmacy and therapeutics committees will have significant financial incentives to integrate biosimilars into their formularies as long as adequate safety and comparability data are available.

Community oncologists may em – brace biosimilars as long as the financial incentives are aligned appropriately; however, comfort and experi – ence with the older agent may influence decisions in clinical practice, he suggested.

“Companies may meet regulations and conduct trials, but that doesn’t mean that clinicians will use these agents with comfort, or that patients will accept them,” he pointed out. “This is not irrational, because we have seen a lack of FDA oversight in the manufacturing of generics. The comfort level may be even less clear for biosimilars, so their use is not a foregone conclusion.”

“Biosimilars will be routinely used only when clinicians are convinced of their safety and efficacy,” Dr Lyman concluded. “This will be a difficult but essential balance to achieve moving forward.”

More guidance on incorporating biosimilars into cancer care will soon come from the National Com prehensive Cancer Network, which has convened a panel of stakeholders— scientists, oncologists, industry, regulators, payers, and patients—to generate a white paper.