Drug Prices, Biosimilars, and Affordability
At no other moment in recent years have we seen greater attention put on the safety, efficacy, and affordability of prescription drugs. Yet barriers remain between patients and innovative medications that are proven to be effective and cost-saving for the entire healthcare system.
For lawmakers working on the Build Back Better Act (BBBA) and other drug pricing reforms, biosimilars represent a clear answer to improve patient affordability, open up competition in the healthcare marketplace, and reward innovation in the pursuit of better patient outcomes.
Many innovative treatments today for complex and chronic conditions are biologics, or products made from living organisms. As the name indicates, biosimilars are treatments that are a near identical copy of an original biologic medicine. Biosimilars have the same administration process, strength, and dosage form as the original – or reference as it’s typically defined – biologic product.
Most importantly, the U.S. Food and Drug Administration (FDA) approves all biosimilars before they come to market using the same rigorous safety, efficacy, and purity standards that are used for their reference biologic.
Biosimilar treatments offer more affordable options for patients who are managing cancer, diabetes, arthritis, and many other serious conditions. Evidence tell us biosimilar drugs on the market today could save the U.S. as much as $54 billion over the next decade. Biosimilars are significantly less costly to produce, just $100-200 million compared to $2.6 billion to produce reference drugs, and can drive market competition with those reference biologics, ultimately increasing patient affordability and accessibility. Not only does this translate into savings for patients at the pharmacy counter, but savings for taxpayers who would help to foot a smaller Medicare bill.
A separate October 2021 analysis found that the total 2021 savings on biosimilars could reach $7.8 billion thanks to expanded market availability of these treatments – including in the form of lower out-of-pocket costs for patients. The same analysis found that potential savings could reach $14.1 billion if biosimilars were to make up 75% of the drug market.
Unfortunately, the United States is falling behind in the adoption of cost-saving biosimilar drugs. Approximately 75 applications for biosimilars have been approved in Europe, which saw the introduction of its first biosimilar in 2006. To date, only 30 biosimilars have been approved by the FDA in the U.S., and only 15 of those biosimilars are available on the U.S. market today.
The evidence would suggest Congress and the Biden administration would want to expand access to these medicines to solve the inevitable challenge around prescription drug costs for patients. But today there remains gaps in recognizing their full potential to create greater competition and outcomes for patients, and current legislation may actually threaten the ability of drug manufacturers to produce new biosimilars for a variety of diseases.
In fact, while BBBA intends to lower drug costs, it may end up cutting off progress to increase competition and affordability for patients who would otherwise benefit from biosimilars and generic drugs. Congress has been solely focused on efforts to allow Medicare to negotiate drug prices before they have competition from biosimilars. This will deter future research and development efforts for these innovative medicines.
If companies are not incentivized to produce biologics because of controversial price-control policies, drug prices will increase without the presence of biosimilar options to drive down costs for patients.
Where Congress is wrong on BBBA, we can see hope in other efforts. In April 2021, Reps. Shrader (D-OR-05) and Kinzinger (R-IL-15) introduced the BIOSIM Act to increase reimbursement and incentivize prescriptions for biosimilars. The bill would allow biosimilars to receive a higher reimbursement than its reference product and would only apply to biosimilars that are available at a lower cost than the reference treatment, guaranteeing reduced out-of-pocket costs to patients and families.
More recently in July, President Biden signed an Executive Order that promotes competition in the American economy and recognized the role biosimilars can play to help more patients afford and access their medications. The Executive Order calls on the Department of Health and Human Services (HHS) to further support biosimilars, citing the cost-saving potential for patients.
If Congress and the Biden Administration are serious about spurring innovation, competition, and access to affordable drugs, they should act to give biosimilars a great role in patient care.
Ana Tomšić, MPH, CHES, is the Vice President at Men's Health Network (MHN).
