Biosimilars: meet 2016’s solution to the specialty drug cost conundrum

January 05, 2016

If you work in the pharma or biotech industry, you’ve probably heard the buzz about biosimilars. And, there’s a good reason why — biosimilars offer patients with cancer, rheumatoid arthritis, diabetes, anemia, and other complex conditions improved access to care in the form of lower-cost, alternative therapies.

They’re promising not just for patients, but for the pharmaceutical industry too. Biosimilars promote competition and innovation in the marketplace; when the patent for a brand name drug expires, biosimilars can compete with their brand alternatives in a growing market. According to recent data from Visiongain, many leading biologic medications, which are worth more than $81 billion in global annual sales, will lose their patent protections by 2020.1

Biosimilars are promising, but the U.S. has only begun to explore their potential.

For years, biosimilars have been safely available in Europe, Japan, Korea, Canada, and Australia at a price 30% lower than their brand alternatives.2 But the United States has only tapped the surface of their potential. After all, safely approving a biologic medication is complex, let alone approving a biosimilar.

Here’s why: biologics, which fall under the category of specialty medications, are made with living cells that treat disease, and are 200 to 1,000 times larger than small molecule drugs, such as aspirin1. Due to their unique makeup, biologics require special manufacturing and handling processes, which are often protected by manufacturers as intellectual property. As a result, biologic medications end up being extremely difficult and costly for manufacturers to replicate.

But if other countries approve biosimilars, how is it done?

To meet U.S. federal requirements, a biosimilar must provide an identical outcome to its biologic alternative in clinical studies. This is easier said than done in drugs that are made of living cells and have a unique molecular makeup. That’s not to say it can’t be done. Last March, the U.S. pharmaceutical industry made great headway by approving the first biosimilar for use in the U.S. The drug, Zarxio (filgrastim-sndz) is produced by Sandoz, Inc., is similar to Amgen Inc.’s Neupogen (filgrastim), and is used to treat patients with various types of cancer.

It’s one step forward in a high-cost, but growing industry.

Since 2006, the spending on specialty drugs in the Unites States has quadrupled. And by 2018 specialty drugs will account for half of all drug costs2. Pretty amazing considering only 1% of the population is in need of specialty drugs3. The medical community is looking for solutions to lower or at least slow cost increases, and biosimilars might be part of the answer. According to research from Express Scripts, $250 billion could be saved if just 11 biosimilars are approved in the next decade4.

Innovation is key, and biosimilars are just one part of the answer.

At ZappRx, we believe biosimilars are promising for patients in need of biologic drugs, for manufacturers looking to join a growing market, and for physicians searching for the best possible therapies. After all, we’re a company that appreciates disrupting an industry, with the goal of improving our health care system. But we also believe the solution involves more than innovative biosimilars — it’s about simplifying complex processes and becoming more efficient. And, it’s about using data and analytics to discover process bottlenecks and how manufacturers, pharmacists, and providers can better communicate and work together. The advent of biosimilars is one critical part of the solution, but it’s not the complete solution. As an industry, let’s keep innovating.

1 Biosimilars may one day save your life. But what are they?” Fortune (February 2015).
2 “One Giant Leap for More Affordable Specialty Drugs,” Express Scripts (August 2015).
3 “Specialty Pharmacy.” UnitedHealthcare.