Building a viable U.S. market is the next big quest for biosimilars

While the FDA may have opened the biosimilar pipeline with its approval of Sandoz Inc.'s Zarxio Friday, a lot of heavy lifting has to be done before biosimilars are a viable market in the U.S.

But the challenge of opening a new market hasn't dimmed interest in biosimilars. As of the end of February, 50 biosimilar development programs, referencing 15 biologics, had been submitted to the FDA, agency spokesman Kristofer Baumgartner told BioWorld Today. How successful those biosimilars will be if they come to market depends in large part on the regulatory scene and public acceptance.

To begin the marketing lift, the FDA issued a consumer update, along with Friday's approval, to acquaint the public with the differences between biosimilars and generic drugs and to reassure doctors and patients about the safety of biosimilars.

"Patients can rest assured that they'll be able to rely upon the safety and effectiveness of an FDA-approved biosimilar, just as they can rely on the reference product that the biosimilar was compared to," the agency's Leah Christl said in the consumer update.

She stressed that a biosimilar, unlike a generic, is not an exact duplicate of the reference biologic, but it works the same way as the innovator for its approved indications. It also must have the same strength, dosage form and route of administration as the reference product, with no clinically meaningful differences between it and the biologic it references. A biosimilar also must be manufactured in accordance with good manufacturing practices.

Judging from some of the reaction to Zarxio's (filgrastim-sndz) approval, it's going to take more than savvy marketing or a consumer update posted on the FDA's website to build the requisite level of confidence to turn biosimilars into a profitable U.S. market.

For instance, Patients for Biologics Safety and Access (PBSA) expressed concern that the FDA approved Zarxio before adopting policies to safeguard patients. "Contrary to its own policy of transparency, FDA has not published any final standards," the coalition of patient advocacy groups said, noting the absence of guidance on a range of issues impacting patient safety, including interchangeability, naming and extrapolation of indications.

"Transparency is essential to build patient confidence in this new category of drugs," PBSA said.

The Alliance for Safe Biologic Medicines (ASBM) raised another issue – the labeling of Zarxio. Although the Sandoz drug was not approved as an interchangeable drug, which would allow automatic substitution, the label doesn't make that distinction, ASBM Chairman Harry Gewanter said. The labeling also doesn't specify what data were supplied to earn approval or note which indications were extrapolated or specifically studied. That's information doctors would want to know. "If we are to ensure that biosimilars are to be accepted and successful, patients and physicians need clarity in both labeling and naming," he said.

BIOSIMILAR STRATEGIES

On the other hand, regulations that create hurdles on both the state and national levels could jeopardize the biosimilar market in the U.S., warned Prime Therapeutics LLC, a nonprofit pharmacy benefit manager. As it is, only a limited number of biosimilars referencing biologics with annual sales of about $900 million or more are likely to break even, Prime said, citing a study it sponsored by health economist Alex Brill.

So far, the biosimilars that are known to be in development in the U.S. are following the blockbuster strategy. In addition to Zarxio, which references Amgen Inc.'s Neupogen, with $1.4 billion in global sales in 2013, the other biosimilar candidates under review at the FDA reference Janssen Biotech's Remicade (infliximab), which had $6.7 billion in sales in 2013; Amgen's Epogen (epoetin alfa) and Janssen's Procrit, with combined 2013 sales of $3.3 billion; and Amgen's Neulasta (pegfilgrastim), with $4.4 billion in 2013 sales. (Another Neupogen biosimilar also is under review.) (See BioWorld Today, July 25, 2014, and March 9, 2015.)

As for candidates that aren't as far along, BioWorld's report Biosimilars: A Global Perspective of a New Market – Opportunities, Threats and Critical Strategies 2014 shows that most of the known biosimilars under development in highly regulated markets are targeting biologics with more than $1 billion in annual sales.

Adding to the uncertainty of breaking even is the FDA's stepwise approach to biosimilar development. If the agency wants more extensive testing for a particular biosimilar than expected, the additional expense "would make it more difficult for a biosimilar manufacturer to break even because it would raise costs without being offset by an increase in sales," Brill said.

A Pwc report echoed Brill's concerns about unexpected clinical trial costs, but it stressed price rather than targeting a blockbuster as a way for biosimilars to build a market – even in the absence of automatic substitution. "Purchasers are likely to incentivize the use of biosimilars as a lower-cost option," it said. "Passing along a portion of those savings to consumers in the form of lower out-of-pocket costs could help overcome inconveniences at the pharmacy counter."

As with generics, price is driving the demand for biosimilars. But the 20 percent to 30 percent discount being seen with biosimilars in Europe is nowhere near that offered by generics. When asked about Zarxio's price at an FDA advisory committee meeting, Sandoz's Mark McCamish responded that he couldn't say what the U.S. price would be given the complexity of drug pricing in the country. In some cases, it may be on par with Neupogen, he added.

However, in the EU where Sandoz's Zarzio is one of nine filgrastim biosimilars on the market, the follow-ons have led to expanded use of filgrastim and about a 30 percent price reduction, McCamish said. (SeeBioWorld Today, Jan. 8, 2015.)

The discounts for biosimilars may increase over time, according to the Pwc report, but they're unlikely to match the generic discounts, "given the complexity and expense of manufacturing biological products." However, over the next 10 years, biosimilars are expected to reduce drug spending in the U.S. by about $40 billion, the report added.

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