Nelson Featured on Challenges to Biosimilar Development and Accessibility

Partner Kevin Nelson discussed the possible causes behind the slow development and entrance of biosimilars to the marketplace and potential avenues to accelerate that growth in the future.

In the 10 years since the creation of the Biologics Price Competition and Innovation Act of 2009 which created a regulatory pathway for biosimilars, only 20 have been approved and seven have been marketing in the U.S.

Kevin attributed this slow development in part to companies’ initial wariness of proceeding down the biosimilar pathway due to the amount of uncertainty associated with the process. However, he is optimistic. Because of more guidance on the technical front, a better understanding of the considerations related to biosimilar litigation, and higher acceptance in the marketplace, biosimilar application approvals have been rising.

In May 2019, the Federal Drug Association published new guidance on the regulatory pathway for biosimilars to be substituted for branded biologics without the involvement of a prescribing physician, or interchangeability.

Kevin said that without interchangeability, “biosimilar manufacturers are forced to compete with established products, which can add costs that are borne ultimately by the consumers.”

However, since there are no approved interchangeable biosimilar products on the market, “patients will not receive an approved biosimilar if they are currently on therapy,” he said. “There is no mandatory substitution at the pharmacy level as there is with small molecule products.”

Kevin has advocated for investigating a statutory change that requires treatment-naïve patients—those that have never received the particular biologic product in any form—to receive an approved biosimilar or the lowest-cost option of the prescribed product.

Another challenge to biosimilars more readily entering the marketplace is their system of repayment. Kevin said that the complex reimbursement process for biologics and biosimilars “often disincentivizes the prescribing and use of biosimilars.”

“Biosimilars certainly have not achieved the tiered formulary status that is seen by generic drugs in the small molecule space. Due to the pricing and reimbursement system, a provider is sometimes reimbursed at a lower rate for using a biosimilar than for using the reference biologic—a disincentive to prescribing a biosimilar,” he said.

Kevin added, “In the private sector, payers will reimburse based on a percent mark-up of the ASP of the drug that is actually administered. Because the ASP for a biosimilar is lower than that of the reference product, purchasers would prefer to use the more expensive reference biologic for which they could make more money on the mark-up.”

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