FAQ – Biosimilars Adoption | Breaking through Barriers

A biosimilar is a biologic that is highly similar to, and has no clinically meaningful differences from another biologic that is already approved by the FDA (known as the reference product) .

Comparative clinical studies and testing are needed to demonstrate that there is no clinical meaningful differences in terms of safety and efficacy between a biosimilar and the reference product.

While not common, biosimilars can be approved for fewer indications than the reference product. This may sometimes occur if the reference product has patent exclusivity for an indication or protected by some other reason related to an indication (such as orphan drug designation or a different mechanism of action).

The FDA has implemented a policy that requires distinguishable suffixes as part of the non-proprietary name of biologic (biosimilar) medicines. For the reference product, the FDA recommends the use of a “core name” that is designated by the United States Pharmacopeial Convention with a 4-letter suffix. For a biosimilar product, the core name will be the same as the reference product but with a different f-letter suffix. This is useful to track adverse events, facilitate the appropriate targeting of any actions against a specific product vs. the enter class of products, minimize the risk of inadvertent substitution, and promote the accurate identification of a product to pharmacists and other healthcare provider.

In 2020. The US healthcare industry spent nearly $350 billion dollars on prescription medicines. In 2029, approximately 43% of all US medication costs was spent on biologic drugs alone. In terms of developmental costs, a biologic reference product can cost over $800 million currently in the US, whereas a biosimilar product can range from $75-$250 million dollars in developmental costs.

After marketing approval and launch, the reimbursement for biosimilars is the next largest barrier to overcome in the adoption and use of a biosimilar. Medicare, Medicaid and commercial payers have all approached biosimilar reimbursement differently. For example, the revenue landscape is dynamically changing and laden with new and greatly varying reimbursement models, margin declines and cuts from payer and governmental agencies, which may result in a yield of lower net revenue relative to the reference product. This may have an multi-million dollar net revenue impact for some agents.

Pharmacists and administrators must take several key factors in how to approach the reimbursement and therefore cost savings/net revenue determinations for an approved biosimilar to be used. Since payers will vary from patient to patient, key factors will include product utilization by site-of-care, wholesale acquisition cost, average selling price, reference product costs vs. biosimilar costs, rebates, 340b status, rebates, payer mix (federal and commercial) status, etc.

Multiple teams must coordinate and work together to successfully adopt and deploy a biosimilar product. These teams consist of but may not be limited to, Pharmacy, Prescribers, Information Technology, Nursing, Educators, Drug Authorization, Drug-Patient Assistance Team, Schedulers, Financial Counselors, Inpatient vs. Outpatient Teams, etc.

Items to consider include changes to workflow (formulary items vs. non-formulary in order entry), pharmacy lead in product build, updates to treatment plans, prior authorization necessity, conversion of existing patients and therapy starts for new patients, order entry (single order vs. treatment plans), inventory, storage, and automatic dispensing cabinet use are just a few.

As with the institutional approval of any medication, biosimilars fall under the same criteria to gain approval for use in any practice. It is critical to utilize checklists that clearly outline not only the interchangeability of biosimilars to the reference products, but also, the cost savings that can be realized in the adoption of a biosimilar product. A robust checklist will produce a better and more effective rationale for the approval of a biosimilar since many approved biosimilar agents will have either the same or fewer approved indications when compared to the reference product.