Submitted: 15 April 2015; Revised: 5 May 2015; Accepted: 6 May 2015; Published online first: 19 May 2015
The US Food and Drug Administration (FDA) recently approved the first biosimilar in the US – the first of an influx of biosimilars expected for the pharmaceuticals market as a result of a number of biological medicines reaching patent expiration in the US [1–3]. The first approval granted was for a recombinant colony-stimulating factor which is the biosimilar version of Amgen’s filgrastim, marketed as Neupogen®. In particular, the FDA has given the biosimilar, made by Sandoz/Novartis, the interim name of filgrastim-sndz; thus, initially the FDA has decided on different non-proprietary names. More approvals are expected and as a result, many stakeholders are debating the regulatory frameworks around the introduction of biosimilars, including naming conventions for biosimilars. In particular, there is considerable controversy and debate around the use of identical versus distinguishable non-proprietary names between biosimilars and the reference biologicals.
A major issue is whether distinguishable non-proprietary names for biosimilars will affect market uptake of biosimilars . One perspective asserts that because biosimilars are not identical to the originator biological, distinguishable names will allow for identification between biosimilars and originator biologicals . It is argued that this will enhance traceability and pharmacovigilance thereby facilitating market uptake. Alternatively, proponents of identical non-proprietary names argue that distinguishable names will hinder market uptake and subsequent consumer benefits . This school of thought argues that identical non-proprietary names would minimize the cost of processing claims and potential confusion arising from the use of prefixes and suffixes to distinguish therapies. Another perspective is that the role of non-proprietary product names is less relevant in the marketing and sale of biological medicines. As we explain below, this is because of the highly technical nature of the products, product distribution channels, prescriber product familiarity, and the role of insurance in driving usage.
To help clarify and suggest a resolution on this debate, this paper examines the issue of naming from a multi-stakeholder perspective, and suggests that naming, by itself, will not affect market uptake. We describe how the biosimilar market in the US is likely to evolve, and provide analysis on the effect, if any, biosimilar nomenclature may have on pricing and ultimately market uptake. Using a targeted literature review, our analysis draws primarily from biosimilar entry and uptake in the European Union (EU), Australia, and Japan . In doing so, we consider the impact of healthcare regulations, reimbursement and pricing schemes, provider preferences, and consumer behaviours on the biosimilars market. We also consider aspects of the introduction of generics in the traditional chemical drug market in the US, noting similarities and differences between generics and biosimilars.
Biotechnology innovations have enabled the development of a number of biological medicines . By law, a biosimilar is required to be highly similar to an originator biological, which is also known as the reference product . The FDA states that, ‘[a] biosimilar is a biological product that is highly similar to a US-licensed reference biological product notwithstanding minor differences in clinically inactive components, and for which there are no clinically meaningful differences between the biological product and the reference product in terms of the safety, purity, and potency of the product’ . To qualify as biosimilar a drug must have the same mechanism of action, dosage form and strength, and prescribed use as the reference product . An important distinction between biosimilars and their small-molecule counterparts, generics, is that biosimilars are not necessarily therapeutically equivalent to the reference product. In contrast to therapeutically equivalent generic drugs that must have chemically identical active ingredients as their reference drugs, biologicals are manufactured using living systems resulting in variations in the active substance between and within manufacturers . Accordingly, the US Affordable Care Act (ACA) requires the FDA to make several key decisions about biologicals and biosimilars. This includes clinical trials investigation requirements, guidelines for biosimilar market entry, and the development of a naming policy .
There exists no uniform global definition for biosimilars. Countries around the world have enacted various regulatory requirements about what constitutes a ‘biosimilar’. For example, the EU has guidelines requiring evidence (clinical trials and studies) to demonstrate that a biosimilar is highly similar in quality characteristics and biological activity to the reference product, with comparable efficacy and safety . However, countries with less stringent regulations have classified a drug as a biosimilar when it might not receive approval under the EU guidelines because biosimilars are developed and commercialized for domestic patients at lower cost levels . For example, in South Korea, biosimilar guidelines implemented in 2009 allow for the extrapolation and exemption of Korean biosimilar products from phase II clinical trials . In March 2015, China issued final guidelines on biosimilars which mirrors that seen in the EU and US [11, 12]. Here, we define biosimilars as those products that would meet regulatory requirements in the US, EU, Canada, Japan, or Australia .
In 2010, the US Congress enacted the Biologic Price Competition and Innovation Act (BPCIA) in order to increase competition in the biologicals market . The BPCIA was developed to provide a novel regulatory pathway for the approval of biosimilars balancing the protection of innovation of new biologicals by providing 12 years of market exclusivity, with encouraging future access to these high cost drugs by allowing entrants to compete after exclusivity and patent expiration. However, the BPCIA left the FDA to determine how non-proprietary names should be assigned to biosimilars.
Action by the FDA is particularly salient because many high-revenue biologicals marketed in the US have or are scheduled to come off patent in the near future, providing manufacturers the opportunity and incentive for biosimilar entry . Now that the FDA is evaluating the first biosimilar applications, it is imperative to consider what factors are most likely to affect uptake in the US. Given the current debate around nomenclature and its impact on the development of the US biosimilars market, will product naming affect pricing and market uptake of biosimilar medicines?
To address its potential impact, we conducted a targeted literature review using PubMed and Google Scholar to examine the development of the biosimilar medicines market and the impact of product naming, if any, in the EU, Australia, and Japan, with a specific focus on the varieties of naming. Search parameters included ‘biosimilar’ OR ‘subsequent entry biologic’ OR ‘follow-on biologic’ AND ‘regulatory pathway’ OR ‘regulations’ OR ‘approval’ OR ‘uptake’ OR ‘market entry’ OR ‘naming’. Internet searches using Google web search were also conducted to identify industry publications, recent press releases, news items, and various regulatory guidelines related to biosimilars.
We assessed the impact of naming from four key stakeholder perspectives and the factors that drive each perspective. These were: from the perspective of 1) manufacturers; 2) patients; 3) providers; and 4) payers. In practice, these stakeholders are highly interconnected; however, addressing each position separately allows for a clearer analysis of incentives, constraints, and beliefs within each realm. An additional facet in the current debate on biosimilar naming centres on the role of distinguishable names in the pharmacovigilance system. For example, with manufacturers we focus on key areas of deviation between the regulations established for biosimilars versus generics. With respect to patients, we analyse patient perspectives in the small-molecules market and describe how patient acceptance influenced market uptake. For providers, we discuss the recent interest in Accountable Care Organizations (ACOs) and bundled payments, specifically describing how the growth of ACOs in the US may affect the uptake of biosimilars. Finally, we evaluate the pricing and reimbursement systems in the US in order to illustrate the ways in which payers can affect market uptake, with a particular focus on the Medicare system.
While in the US, the FDA is developing regulatory guidelines for a biosimilar pathway; other countries have already forged a path from which lessons may be drawn. In particular, the EU, Japan, and Australia already have experience with biosimilar licensing, market launches, and competition. We provide a detailed overview of biosimilar uptake and the impact of nomenclature from key perspectives in the EU (examining Germany and Norway as cases of special interest representing more advanced markets in the EU), Australia and Japan.
The EU has permitted the entry of competitive biosimilars which generally (but not always) share the non-proprietary names of their reference products since 2005 . While the approval of biological products for marketing within the EU is under the oversight of the European Medicines Agency (EMA), each EU country has a unique reimbursement system with different incentives in place for the use of biosimilars. One study estimates that between 2007 to 2020, biosimilars will have saved between Euros 11.8 billion and Euros 33.4 billion in eight EU countries . The median retail price reduction as a result of biosimilar competition from 2006 to 2013 was 35% .
In each EU country, a government agency determines whether a biological will be included on the country’s formulary and in the reimbursement system. The government agency may negotiate a biosimilar price that is 25% less than the reference price . However, despite a policy of shared non-proprietary names, the market structures have been such that often the consumer or physician had little financial incentive to choose the lowest-priced biosimilar .
Throughout Europe, there is generally little financial incentive for the patient, the physician or the pharmacists to opt for the less expensive biosimilar product, with some exceptions, for example, Germany [19, 20]. Market shares of biosimilars vary considerably by product and country in the EU with those countries that have the highest market shares having the greatest incentives to use low cost products. While sales of biosimilars have been growing in the EU, the unintended consequences of some reimbursement systems have resulted in incentives that deter biosimilar competition, despite a shared names policy . Some EU countries have set biosimilar prices at a fixed percentage below the price of the reference biological. These mandatory discounts of 30% in Spain , at least 20% in Italy, 40–70% in Austria, and 15% in France can deter competition . Specifically, theoretically if a manufacturer of an originator biological decreases its price below the cost of producing the biosimilar, then the biosimilar will leave or not even enter the market. While such price competition might reduce prices in the short run, the long-run entry deterrence leads to increased prices.
Another example is Ireland’s hospital level tendering, which resulted in perverse incentives for hospitals. Hospitals actually  chose the highest price biological, since ‘the absolute size of the discount was largest and was retained by the hospital.’ That is, the tendering system caused hospitals to have the most financial gain when choosing the highest priced drug. However, tendering generally leads to lower prices. For example, in England, each hospital has a budget and the ability to purchase biologicals with a competitive tendering process; if a biosimilar product is the lowest in price, the hospital is incentivized to purchase the biosimilar and use the saved resources elsewhere . As a result, biosimilars constituted 80% of granulocyte colony-stimulating factor (G-CSF) sales and the UK physicians moved G-CSF back to first-line treatment due to the lower costs of the treatment. The UK’s National Institute for Clinical Excellence has examined the seven human growth hormones that have been approved in the UK (including the biosimilar somatropin) and found no difference in clinical effectiveness. This suggests that in the case of human growth hormones utilization of the lower price drug has not led to losses in quality .
Some countries in the EU have therefore begun to restructure incentives. Several methods have been used to financially incentivize stakeholders to utilize lower priced biosimilars, leading to increases in biosimilars uptake. For example, the tendering system provides a clear example where the financial incentives resulting from the market, and not the naming of drugs, drive biosimilar uptake. Under national tendering, for a given duration of time, either all patients in that country or only new patients will receive the product of the manufacturer who wins the tender. In a national tendering system, the government will only pay for tendered product on its formulary, leaving prescribers effectively no choice.
The example of infliximab in Norway demonstrates how national tendering may decrease prices. In 2014, the Norwegian Medical Agency published the hospital tender price for the infliximab biosimilar. Inflectra® was offered at a 33% discount whereas Remisima® offered a 39% discount over the reference product . Inflectra® and Remsima® are actually the same product produced by Cellitron, but Inflectra® is marketed by Hospira while Remsima® is distributed by Orion Pharma. In this case, Remsima® was chosen because it provided the government the lowest priced product. In 2015, the discount was increased to 72% . Also, Norway is conducting a study for Remsima® to determine if switching from originator (Remicade®) to biosimilar (Remsima®) is safe .
Germany has been successful in the uptake of biosimilars, and therefore provides an informative example regarding the factors promoting biosimilar uptake. For example, according to IMS in 2013, biosimilars had 53% of the epoetin and 51% of the G-CSF market in Germany . In general, the German Government has encouraged the use of biosimilars, and provides an incentive system that does so . Germany has a reference pricing system as well as biosimilar quotas for both regional sickness funds and physicians, and a rebate system. Biosimilar manufacturers also enjoy strong reputations with healthcare providers all of which result in stronger incentives for stakeholders to use low cost pharmaceuticals. Under reference pricing, physicians must inform patients that they must pay out-of-pocket the difference between the price of the drug chosen and the reference price. For drugs, patients pay 10% of pharmacy retail price with a minimum charge of Euros 5 and a maximum charge of Euros 10, a maximum of 2% gross income and difference from the reference price . Since 1998, ‘regional budgets replaced physician budgets based on practice specific prescription targets’ . If over budget by more than 15%, physicians receive a written notice asking them to reconsider their prescribing practices. If physicians exceed 125% of their budget they need to repay the amount above 115% unless this can be justified . Accordingly, generics increased from 57% of prescriptions in 1994 to 76% in 2008 . In Germany, the large insurance companies (sickness funds) use capitation payment and therefore create and run drug formularies . ‘These organizations negotiate for discounts and may choose the biosimilar to be on the formulary’ . Additionally, Germany’s Federal Healthcare Committee has encouraged the use of biosimilars and is able to bargain for rebates. Sandoz, for example, in 2007 increased its Binocrit® discount from 15% to 33%, and obtained 30% of the market .
In Europe, government agencies often individually determine whether a biological will be included on the country’s formulary and in the reimbursement system. This is also the case in Australia and Japan. However, in contrast to Europe, Australia and Japan have policies requiring unique qualifier codes following the non-proprietary name for most biosimilar products. For example, in Japan the biosimilars use non-proprietary name of reference product plus biosimilar and a number that indicates the order that the biosimilar was approved, e.g. a designator of ‘3’ indicating the third biosimilar [15, 28].
The Australian Government adopted a biosimilar approval pathway in 2008, based on the existing system developed in the EU. In Australia, the Therapeutic Goods Administration (TGA) evaluates and licenses drugs, which then are evaluated according to the Pharmaceutical Benefits Scheme (PBS) . Australia had originally planned to establish a naming system in which non-proprietary names for biosimilars include a prefix ‘sim(a)’ and a three-letter code for each biosimilar to distinguish the biosimilar from the reference drug [29–32]. However, in January 2015, the TGA announced that it is currently undertaking a review of its naming policy .
Under the Australian system, biological drugs are primarily administered in hospitals and more recently in community pharmacies. As in some countries in Europe, Australian hospitals may practice tendering and receive discounted prices from bulk orders, but will be reimbursed by PBS at the original price . Thus, hospitals-based tendering puts downward pressure on drug prices and shapes the choices of its prescribers and patients.
Japan requires distinguishable non-proprietary names for biosimilars using qualifier codes . For most biologicals in Japan, both the reference biological and the biosimilar non-proprietary name must bear a suffix to the non-proprietary name to distinguish the product. In the case of most biosimilars, the suffix also specifies that it is a biosimilar, the exception to this rule is for somatropin, or human growth hormone . There has been a formal approval process for biosimilars in Japan since 2009, however, the government does not provide incentives to use biosimilars . The government sets biosimilar reimbursement at 70–80% of the originator’s price  and Japan does not allow interchangeability, substitution, or switching mid-treatment to a biosimilar . Overall, uptake for biosimilars in Japan was estimated to be 6% in 2011, although the uptake for the epoetin alpha biosimilar was estimated at 25% in its first year . A total of six biosimilars have received approval in Japan as of July 2014 .
Finally, while biosimilar competition in these three markets has fostered lower prices, price differentials between reference products and biosimilars in the EU have been smaller than in the small molecules market . In particular, the median price retail reduction as a result of biosimilar competition from 2006 to 2013 was 35% .
One of the main drivers of the BPCIA is to increase competition in the biologicals market and to control healthcare costs . In particular, policymakers seeking fiscal restraint have advocated for biosimilars in order to control healthcare expenditures. Thirty years ago, the US was faced with similar concerns as it developed a framework for generic chemical drug entry. The resulting Hatch-Waxman Act was intended to balance competition and innovation, and has helped generic drugs generate over a trillion dollars in healthcare cost savings between 2002 and 2011 . A similar trajectory is anticipated for biosimilars. A recent RAND study predicts that over the next decade biosimilar drugs in the US may lead to US$44.2 billion in savings related to direct spending on biological drugs . The targeted literature review revealed four US key stakeholder perspectives that are presented here.
First mover disadvantage
In many markets the first entrant gains considerable advantage. However, this may not be the case for biosimilars due to greater uncertainty for the first entrant. For instance, in addition to the uncertainty regarding regulatory frameworks in nascent biosimilar markets, the first mover may face various legal costs as a result of patent litigation concerning the reference product. Similarly, the risks for the first mover to apply for interchangeability status may be large relative to the potential benefits.
Interchangeability and automatic substitution
The use of identical non-proprietary names does not indicate interchangeability, although may be perceived as doing so. According to the FDA, ‘[a]n “interchangeable” biological product is biosimilar to the reference product, and can be expected to produce the same clinical result as the reference product in any given patient. In addition, to be deemed an interchangeable biological product, it must be shown that for a biological product that is administered more than once to an individual, 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 alternation or switch’ .
Interchangeability may not be allowed until the biosimilar has a track record and has been demonstrated (through post-marketing studies) to produce results identical to that of the branded product. It is uncertain as to how long this process might take, if it ever occurs. In addition to the costs and uncertainty in how long it would take to achieve an interchangeability rating from the FDA, manufacturers must carefully consider the implications of applying for interchangeability and subsequently not achieving it.
The primary benefit of being the first interchangeable biosimilar in the US derives from one-year interchangeability market exclusivity accorded to the first interchangeable biosimilar. This exclusivity period is not granted to a biosimilar that is not interchangeable. If a drug can be the first biosimilar and also be interchangeable, it may only foreclose other interchangeable (not non-interchangeable) biosimilars from the market. This has very different implications from the exclusivity granted to small molecule generics. Specifically, an abbreviated new drug application (ANDA) grants market exclusivity for 180-days to the first generic drug for a given originator product. Thus, in the case of small molecules, the first approved generic drug is deemed the sole supplier of the generic for the branded drug product for 180 days and thus has more control over price until other competitors are permitted to enter the market. In this time period, the generic drug can generate substantial profits .
In the case of interchangeable biosimilars, it is likely that a few non-interchangeable biosimilars may already be approved and in the market. Thus, the interchangeable biosimilar may be competing against not only the reference product but also other biosimilars. The primary advantage of being interchangeable is that the therapy may become automatically substitutable at the pharmacy level, pending state law requirements. However, since most biologicals are administered by healthcare providers, such substitutability at the pharmacy level may not be important for a given product. Further, the costs associated with proving interchangeability are non-trivial . Nonetheless, some sponsors developing biosimilars may seek an interchangeability designation as a differentiator for payers who may then grant more favourable formulary status to the interchangeable product. Such a formulary placement would favour the interchangeable product irrespective of the non-proprietary name.
Thus, the reduced benefit to manufacturers granted through interchangeability compared to the small molecule market suggests that interchangeability may be sought by few manufacturers and may not play a large role in promoting biosimilar entry. On the other hand, there is notable concern that physicians may perceive shared non-proprietary names to imply safe interchangeability between drugs . In a 2012 survey of US physicians, 67% of respondents assumed that shared non-proprietary names implied it was safe for a patient to be switched between products when prescribing . While below we describe why the decision to prescribe either a biosimilar versus the originator product may be driven by clinical and financial incentives instead of nomenclature, this lack of physician understanding suggests that physicians are indifferent to products, and shared non-proprietary names could lead to medically inappropriate switching.
In the EU, the substitutability between biologicals must be decided by each country . However, based on the existing literature for markets where payers have more influence over prescribing practices (as is the case in the US) the issue of uptake will likely be around price negotiations – with the lowest price products likely to gain sales. Costly risks such as these may likely play a primary role in determining entry and dominate any effect that a naming policy may have.
In addition, there remains some confusion around what a biosimilar is and its relationship to its reference product. Recent physician surveys demonstrate that this confusion persists in the EU, where biosimilars have been approved since 2006 and share non-proprietary names with reference products . The first biosimilar sponsor for each reference product market may likely need to invest resources educating stakeholders to achieve sufficient market utilization.
In the small molecules market, an overall lack of price responsiveness from originator product makers led them to lose over 80% of the overall market in a few months . In contrast, biological reference product manufacturers have responded in myriad ways to the potential entry of biosimilars. The considerable competitive response from originator biologicals in the EU includes lowered prices, development of second generation biologicals by the originator, patent extension, and reduced frequency of dosages [45, 46].
In the US, patent defenses will likely play a role in determining market share. Also, companies that manufacture originator drugs are seeking to expand and improve all aspects of product formulations, dosing and perceptions over biosimilar competitors . Given these dynamics, one would expect that, irrespective of naming policy, biosimilars will not achieve the same percentage of market share as generics even after the market has developed. Given the high costs of development and manufacturing, prices are unlikely to decrease by 80% or 90%, as was observed in the generics market. Prior to 2014, reductions ranged from 20% to 30% . However, the recent discount of 72% observed in Norway may change this scenario and lead to larger discounts.
Consumer uptake of biosimilars will depend on both perceptions of safety and quality as well as price incentives. Presently, 84% of the total US small molecules chemical market consists of generic drugs, but this market share was only achieved over a long time . It took time for US consumers to accept generics despite the fact that they share a non-proprietary name with the reference product. Although having both shared names and bioequivalence, today, patients still perceive differences between reference products and generics, and believe that in particular, brand-name drugs are more effective and safer than generics . In the case of generics, shared non-proprietary names have not resolved consumer perceptions around whether drugs are identical; yet the market for generics remains substantial because generics are priced lower . Notably, third-party payers have induced patients to use generics in a number of ways, including higher copays and excluding the branded product from their formulary and forcing consumers to pay full price for a non-formulary branded product .
In the US, there has been a heightened interest in ACOs and the use of alternative payment systems, such as fixed bundled payment systems to providers that would cover a group of products and services for a given diagnosis. to reduce healthcare costs while still delivering quality care [50–52]. Bundling will give physicians the incentive to prescribe the lowest cost and effective alternative in a given indication, whether a reference biological or a biosimilar, regardless of name. As long as physicians believe that the reference product and the biosimilar are truly similar, they will likely choose the lowest price product; as has been the case in Germany, a country with relatively high penetration of biosimilars .
In the US, tier pricing with higher copays for patients or percentage of cost, or reference pricing may be utilized . Under reference pricing, the consumer is incentivized to take the lower priced biological, since they are paying out-of-pocket for the difference between the price of the drug they choose and the reference price. This may influence physician’s prescribing patterns, particularly if patients question the higher price of a biological. Thus, under such a payment system, physician and patient incentives may be aligned and driven by reimbursement policies more than naming.
Our analysis of regions where biosimilars have already been introduced, combined with a review of the introduction of generics into the small molecules market in the US, reveals that financial incentives created by these systems, particularly through pricing, will determine the development of the biosimilar market, with little or no effect from naming. While in the US, the FDA is developing regulatory guidelines for a biosimilar pathway; other countries have already forged a path from which lessons may be drawn. While there is some evidence that biosimilar competition in other countries has fostered lower prices, price differentials between reference products and biosimilars in the EU have been smaller than in the small-molecules market [6, 16, 17, 54].
As market share of biologicals increases in the US, they may come under greater scrutiny from payers, due to high cost and efficacy questions, leading to an increasingly difficult market landscape for manufacturers. The mean annual cost of an originator biological is estimated to be US$34,550, and some payers require co-insurance rates of up to 35% . Moreover, the rate of price increases for biologicals far exceeds the overall rate of inflation. Pricing suggests that in the US, the reimbursement system, and not naming, will greatly influence the development of the biosimilar market.
While the US reimbursement system is more complex than the EU, with both large private and public payers, financial incentives will still drive the biosimilar market. Reimbursement will develop similarly to the generic drug reimbursement system with one exception being that the reference product will likely compete in pricing. Manufacturers face risks when entering the market because they may have to compete for preferred formulary placement. Thus, third-party payers will have the ability to negotiate the best deal for their clients and may specify different copays for biologicals and biosimilars under a tier system. As in the US generics market, the tier system and copays will likely drive choice in the biosimilars market, with naming of little impact in market uptake.
Medicare spends billions of dollars on biologicals each year with expenditures expected to increase annually [55, 56]. The Medicare payment system is therefore a key driver in uptake. For Part B practitioner-administered biosimilars, Medicare reimburses each biological or biosimilar at its own ‘average sales price’ (ASP) (an amount set by the government based on pricing information submitted by manufacturers) plus 6% of the reference product’s ASP. As a result, physicians receive, on average, the same monetary reward for both the reference product and biosimilars. Congress devised such a policy so that on average, physicians do not have a monetary incentive to prescribe the higher-priced originator product [55, 56].
As with ACOs, Congress is investigating ways to reduce Medicare spending. In particular, a bundling policy might encourage use of biosimilars . Since Part B covers practitioner-administered drugs, bundling could potentially be easily adapted to include practitioner-administered drugs in order to encourage physicians to use biosimilars .
In a recent report to Congress , MedPAC evaluated three pricing strategies for Part B drugs that use information concerning a drug’s clinical effectiveness to improve the value of Medicare spending. These strategies are: a) reference pricing; b) payment for results; and c) bundling. As mentioned previously, under reference pricing, the new drug must show better results to be priced above currently available products. Payment for results-based pricing ties the payment to the patient’s outcome through a risk-sharing arrangement with the drug company. Medicare also has the option to bundle rates, which, as discussed above, sets a fixed price for a group of products and services and allows the providers of the goods to negotiate how the payment will be shared. The bundling policy might encourage use of biosimilars .
In this paper, we have outlined why the US biosimilar market is likely to develop into a robust source of competition regardless of product naming, and further, why distinguishable naming, by itself, may have no discernible effect on the uptake of biosimilars, Rather, in examining biosimilar entry and market uptake in other regions, it is clear that other factors and financial incentives, including manufacturers’ rebates, beliefs, and behaviours of key stakeholders will drive both the entry of biosimilars into the market as well as the extent of its adoption.
In the small molecules market, a key driver of generic uptake in the US was the fact that brand-name manufacturers did not proactively respond to competition from generics . Outside the US to date, we have seen considerable competitive response from branded biologicals, especially in the form of competitive pricing. While the generics market did not develop overnight, we see today the tremendous savings from generics, and expect relatively smaller but still important potential savings (on an absolute basis) from biosimilars. As observed in Europe, incentives sometimes deterred biosimilar uptake in the EU, despite the fact that shared names prevail in the region.
Ultimately, the financial incentives of stakeholders will determine how the market will develop and, following the case of generics; the US incentive system will likely evolve into a robust market for biosimilars. Both private and public payers are drawn to low prices, the government from an access and cost basis, and private payers from a profit basis. For example, bundling, especially for physician-administered drugs in Medicare Part B and private payers, will incentivize stakeholders to choose the least cost alternative for similar results.
Thus, in the face of compelling incentive schemes arising from both government reimbursement systems and third-party payers, it is unlikely that naming will have an impact on market uptake. Instead, potential cost savings to the US healthcare system from biosimilars will be achieved through careful structuring of reimbursement and payment systems.
Competing interest: The paper received unrestricted financial support from Amgen. The authors declare that they have no competing interests.
Provenance and peer review: Not commissioned; externally peer reviewed.
1Department of Economics, Widener University
2Kennedy School of Government, Harvard University
3Schaeffer Center for Health Policy and Economics, University of Southern California
4Precision Health Economics
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Author for correspondence: Jacqueline Vanderpuye-Orgle, PhD, Director of Research Operations and Senior Research Economist, Precision Health Economics, Suite 500, 11100 Santa Monica Boulevard, Los Angeles, CA 90025, USA
Disclosure of Conflict of Interest Statement is available upon request.
Copyright © 2015 Pro Pharma Communications International
Permission granted to reproduce for personal and non-commercial use only. All other reproduction, copy or reprinting of all or part of any ‘Content’ found on this website is strictly prohibited without the prior consent of the publisher. Contact the publisher to obtain permission before redistributing.
Source URL: https://gabi-journal.net/product-naming-pricing-and-market-uptake-of-biosimilars.html
Author byline as per print journal: Michael Sarshad, BSc, MBA; Rosanne Campbell, BComm, PGdip, MSc; Peter J Pitts, BA; Jacqueline anderpuye- Orgle, MSc, PhD
Submitted: 7 November 2018; Revised: 21 December 2018; Accepted: 27 December 2018; Published online first: 31 December 2018
The availability of biological drugs is an important advancement in treating complex diseases. However, the inherent complexities in developing and manufacturing biologicals have inevitably meant that their use is costly, which in turn places a high burden on the healthcare system. In the US, the per cent of pharmaceutical spending attributable to biologicals has increased from 13% in 2006 to 27% in 2016 . In 2007, the average daily cost of a biological was 22 times that of a small molecule drug . Biosimilars present the possibility of lowering these costs while offering additional treatment options for patients.
The pace of biosimilar approvals in the US has been accelerating, with the US Food and Drug Administration (FDA) approving five products in 2017, two of which were for the blockbuster originator biologicals Humira® and Remicade® . Currently, there are 12 biosimilar products approved in the US and 22 distinct biosimilar products approved in the EU, see note. In fact, in the first eight and a half years after the regulatory pathway was established, FDA approved more biosimilars to more reference products (12 unique biosimilars to eight reference products) than the EU (five unique biosimilars to two reference products). As the number of biosimilar approvals continues to grow, it will become even more important to collect pharmacovigilance data that are accurate and attributable to the specific product. The World Health Organization (WHO) proposed an approach of assigning all biological products a 4-6 character alfa-numeric biological qualifier (BQ) code. The BQ would consist of four random consonants and an optional 2-digit checksum (calculated from the letters and their order in the BQ code). In October 2017, WHO announced that it would not proceed with BQ code system.
Different countries and regions have taken various approaches to ensuring accurate product traceability; the EU passed legislation requiring the recording of brand name, batch number and lot number, while the US and Japan pursued the use of distinguishable non-proprietary names. The latter has been criticized by some who believe it may negatively impact the uptake of biosimilars.
How biosimilars are named has become complex and inconsistent globally. FDA’s final guidance on the naming of biologicals (reference products and their biosimilars), with the addition of a distinct four-letter suffix to the non-proprietary name, was a major step forward in supporting more accurate pharmacovigilance. Those in favour of the suffix contend that the distinct nomenclature allows for better product-specific tracking of safety and real-world effectiveness. This in turn promotes prescriber and patient comfort with biosimilars, thus serving an important role in the overall adoption of biosimilars and enhancing a robust marketplace.
Those who argue against differential naming of biosimilars, including the US Federal Trade Commission (FTC), state that it causes confusion for prescribers, as distinguishable non-proprietary names will make physicians believe there is a difference between the originator and the biosimilar. This, they suggest, would create an artificial barrier by discouraging prescribing, with the consequence of slowing uptake and potentially of inhibiting cost savings.
The recent FDA guidance on biosimilar naming and an FTC statement in a recent Department of Health and Human Services (HHS) document, American Patients First: The Trump Administration blueprint to lower drug prices and reduce out-of-pocket cost, prompted a review of published evidence to examine the impact of a distinct four-letter suffix as part of a biological product and a global naming standard for biosimilars [4, 5].
An ad-hoc literature review was conducted between January and October 2018 to gather evidence related to the various stakeholders impacted by introducing a distinct suffix as part of biological product non-proprietary names. These stakeholders included regulatory agencies, physicians, payers, patients, government/affiliated agencies and advocacy groups. PubMed was searched for evidence related to differential nomenclature published in the last five years (2013–2018). Additional sources of evidence included ClinicalTrials.gov, pharmacovigilance databases, naming guidelines and surveys. Literature was reviewed to identify the link between differential nomenclature and better safety reporting, real-world effectiveness and prescriber comfort with biosimilars.
Better safety reporting and real-world effectiveness
In Europe, guidelines on good pharmacovigilance practices (GVP) have been developed for biological medicinal products and require that prescriptions for originator biologicals and biosimilars specify brand names . This helps to reduce ambiguous adverse event (AE) reporting, i.e. an inability to link an AE to a specific product [originator or biosimilar]. A review of the European Eudravigilance database found that during the period March 2017 to February 2018, around 25% of the AEs reported for infliximab were ambiguous even after implementing GVP, with no link to originator or biosimilar, see Figure 1. While these guidelines are beneficial, adopting the current FDA system of a distinct four-letter suffix for biologicals can further reduce ambiguity.
However, the distinction between infliximab biosimilar products using differential scientific nomenclature has been sufficient to facilitate post-marketing studies, particularly in inflammatory bowel disease (IBD) indications, as limited data were available at the time of regulatory approval. The Clinicaltrials.gov site was reviewed to establish the number of ongoing, global real-world and observational studies conducted post-marketing for infliximab biosimilars, see Figure 2. The Clinicaltrials.gov database was selected as it includes research studies conducted in 205 countries. In addition, evidence from two published sources, Diena et al. (2017) and Ben-Horin et al. (2016), which reviewed Inflectra® and Remsima® post-marketing studies, see Figure 2 [7, 8], was incorporated.
Furthermore, a review of the Australian Therapeutic Goods Administration (TGA) Database of Adverse Event Notifications (DAEN) was conducted to determine if there was a difference in AE reporting between the biosimilars infliximab, filgrastim and epoetin. In Australia, infliximab and filgrastim biosimilars do not have distinct Australian Biological Names (ABN). However, the TGA has used a distinct ABN for epoetin lambda, a biosimilar of epoetin alpha, due to apparently different glycosylation patterns . The data highlight that infliximab (25%) and filgrastim (36%) were associated with higher rates of ambiguous reporting compared to epoetin (3%), see Figure 3.
Prescriber comfort with biosimilars
It is relevant to understand physician perceptions of the safety of biosimilars. FDA can only approve a biosimilar if it is highly similar to, and has no clinically meaningful differences from, the originator biological. However, in a survey of US physicians across a variety of specialties, over 50% of respondents expressed safety concerns with FDA-approved biosimilars, see Figure 4 .
The Biosimilars Forum conducted a survey from November 2015 to January 2016 of US physicians who frequently prescribe biologicals (Reported in Cohen et al. ). The aim of the study was to investigate physician awareness, knowledge and perception of biosimilars. Figure 5 indicates that the vast majority of respondents (75%) considers it necessary to seek additional information on biosimilars prior to prescribing them.
In 2015, the Alliance for Safe Biologic Medicines (ASBM) conducted a survey of US Healthcare Professionals (HCPs) to establish their perspective on biosimilar naming. In this survey, 66% of respondents supported distinct non-proprietary naming for originator biologicals and biosimilars, see Figure 6 . Similarly, a 2017 ASBM survey of Canadian healthcare providers found that 68% of respondents wanted distinct non-proprietary naming for all biologicals .
There are cases in which the biosimilar is approved in an indication based on the extrapolation of other clinical data. A 2016 survey of US physicians (Cohen et al. ) established that roughly 60%, see Figure 7, of respondents expressed concerns with using biosimilars in indications where approval was extrapolated from other clinical data . By promoting effective pharmacovigilance, differential nomenclature may help to alleviate physician concerns with the concept of extrapolation.
Due to the inherent complexities associated with developing and manufacturing biosimilar products, differentiating them is essential to both product uptake and product-specific tracking. As highlighted in the introduction, those who argue against distinct biological naming maintain that it does not support biosimilar competition and creates an environment unconducive to a biosimilar manufacturer’s commercial success. However, based on the evidence presented, distinct nomenclature would seem to be essential for accurate pharmacovigilance and to increasing physician comfort with the use of biosimilars, thereby promoting biosimilar uptake and creating a viable competitive market.
Having identified the need for a global naming standard, different countries have taken varying approaches to implementation. Some may argue that the system used by FDA may hinder biosimilar uptake, however, market data have proven otherwise. While it is not currently possible to make any causal inferences in this paper, anecdotal evidence suggests that distinct non-proprietary names have not deterred uptake. One example of note is the launch of the biosimilar Zarxio®. Zarxio®, a biosimilar of filgrastim, was approved in Europe in 2009 and in the US in 2015. The FDA-designated suffix in the US is filgrastim-sndz, whereas in the EU, all biosimilars are identified by a new brand name with no suffix to the scientific name. A comparison of market share in the first two full calendar years after approval reveals that Zarxio® had slightly better uptake in the US versus in Europe, see Figure 8.
This suggests that the US differential naming approach of including a suffix does not hinder the possibility of a favourable biosimilar marketplace and the ability for a biosimilar sponsor to compete successfully.
As demonstrated in Figure 8, Zarxio® uptake more than doubled in the second full calendar year post-launch.
The recent US HHS blueprint (To Lower Drug Prices and Reduce Out-of-Pocked Costs) stated that physician and patient confidence in biosimilars is critical to increased acceptance of biosimilars . The evidence suggests that additional information and data about biosimilars could help physicians become more comfortable with using them. In an ASBM (Alliance for Safe Biologic Medicines) survey of Canadian physicians, only 54% of respondents stated that should two biological medicines have the same INN, the implication is that they are identical . In a survey of US physicians, 76% of respondents indicated that they had the greatest interest in learning more about the totality of evidence related to safety, efficacy and potency of biosimilars . FDA’s current naming policy (a distinct four-letter suffix as part of a biological product) facilitates better pharmacovigilance and product traceability, which can promote physician comfort with prescribing biosimilars. Assigning distinct non-proprietary names for biosimilars also supports the development of real-world pharmacovigilance data for biosimilars and allows for that information to be disseminated to physicians who often request data to make an informed decision on product therapy choice. Increased comfort in prescribing biosimilars can contribute to a more robust and competitive marketplace if it impacts adoption positively.
Product-specific tracking and physician comfort
A lack of unique names across biological products complicates the reporting and tracking of AEs; allowing for better pharmacovigilance and safety tracking would help to alleviate some of these concerns. Unique non-proprietary names of biosimilars can facilitate access to information on individual products, which will lead to better physician understanding of biosimilars and ultimately comfort in prescribing them.
Biosimilar label extrapolation is an area of concern for some physicians. The data suggest that differential nomenclature may promote product-specific tracking in post-marketing studies for extrapolated indications, as described in Figure 2. Prescribers may be more comfortable with label extrapolation if they have confidence in the traceability of different biosimilar products and their specific studies.
The evidence suggests that differential nomenclature will facilitate traceability, helping to demonstrate the real-world safety and efficacy of biosimilar products. This supports the development of high quality products and continuous investment in manufacturing, as manufacturers can be held accountable for the products distributed. Establishing a reputation for high quality manufacturing eases entry into the biosimilar market, encourages adoption, and promotes marketplace competition. Developing high quality, traceable biosimilar products will contribute to formulary inclusion, enabling payers to better leverage competitive market forces to control the cost of care.
In summary, it is believed that findings outside of the US support the notion that a differential naming policy facilitates pharmacovigilance and better product traceability and will also help to minimize inadvertent substitution for drugs distributed via retail pharmacies. This supports manufacturer accountability and the development of high quality products in addition to more attributable measurement of efficacy and safety outcomes for biosimilars.
The number of available biosimilars will continue to grow, therefore, it is essential to have a system that allows these products to be differentiated and traced. The evidence collected in this review demonstrates that a distinct four-letter suffix as part of a biological product may reduce the ambiguity in AE reporting, facilitate post-marketing studies in indications with limited data at the time of regulatory approval and alleviate physician concerns related to biosimilar safety and extrapolation. Distinguishable suffixes for biologicals will allow better product tracking and awareness around product effectiveness/outcomes, which ultimately will strengthen physician and patient comfort with biosimilars. Thus, it will enable a competitive and sustainable biosimilar marketplace while promoting biosimilar uptake.
Competing interests: Michael Sarshad, Rosanne Campbell and Peter J Pitts have received funding for this research from Amgen.
Jacqueline Vanderpuye-Orgle was employed by Amgen and held Amgen stock during this research. She is currently employed by Parexel.
Provenance and peer review: Not commissioned; externally peer reviewed.
Michael Sarshad, BSc, MBA
Senior Engagement Manager
Commercial Strategy & Planning, Consulting Syneos Health
Rosanne Campbell, BComm, PGdip, MSc
10 Bloomsbury Way, London WC1A 2SL, UK
Peter J Pitts, BA
Former Associate Commissioner, United States Food and Drug Administration
Visiting Professor, Université Paris Descartes Medical School President, Center for Medicine in the Public Interest 20/F, 757 Third Avenue, New York, NY 10017, USA
Jacqueline Vanderpuye-Orgle, MSc, PhD
Glendale Adventist Medical Center, Suite 140, 1560 E Chevy Chase Drive, Glendale, CA 91206, USA
Note: Distinct biosimilar products approved in EU include: (1) products in the EU that are considered ‘transition’ products in the US, i.e. biological products approved pursuant to new drug applications (NDAs), including section 505(b)(2) NDAs, e.g. growth hormones, insulins; and (2) products licensed in the EU under multiple brand authorizations.
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Author for correspondence: Michael Sarshad, BSc, MBA, Syneos Health Consulting, Suite 270, 1315 Lincoln Boulevard, Santa Monica, CA 90401, USA
Disclosure of Conflict of Interest Statement is available upon request.
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