A Promise Unfulfilled: The State of Biosimilars

Given the high cost of biologic drugs when the first biosimilars—highly similar, lower-cost alternatives—began to be developed, expectations for their cost-saving potential were high. Unfortunately, in the near decade since the first biosimilar was approved of filgrastim-sndz (Zarxio; Sandoz) in 2015,¹ this promise has failed to materialize.

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When it comes to the cost-impact of biologics, Humira (adalimumab), manufactured by AbbVie, is the perfect poster child. Initially approved to treat moderate-to-severe rheumatoid arthritis in adults, the drug went on to receive expanded indications for several other autoimmune conditions. That, combined with its exorbitant cost—about $7000 a month—and ongoing patent manipulation by the manufacturer, means the drug has been a blockbuster and market leader since it was approved more than 20 years ago. These tactics and others, such as deals with the leading pharmacy benefit managers (PBMs), have also delayed lower-cost biosimilars coming to market, and when they finally did, it prevented their uptake, posing a significant cost management challenge for employers.^2,3

When Humira's patent finally expired in January 2023, many breathed a sigh of relief, anticipating a surge of biosimilars.⁴

The promise seemed clear: new biosimilars entering the market would finally lead to genuine competition that would drive down prices and improve access for patients in need. Yet, the predicted shake-up has failed to materialize. Instead of a dynamic market with a variety of affordable options, Humira remains dominant, and biosimilars have struggled to make their impact.²

What should have been a transformative moment for the pharmaceutical industry has instead become one of its most significant missed opportunities. How did that happen? This series examines the factors contributing to the slow adoption of biosimilars and, most importantly, what needs to change to realize the promise of affordable biosimilar alternatives fully.

COMPLEX MARKET DYNAMICS

The expiration of Humira's patent did unleash a wave of market developments. However, the manufacturer once again manipulated the market, this time using pay-for-delay tactics, essentially paying biosimilar manufacturers to keep their drugs off the market until 2023.⁵ As a result, while lower-cost options rapidly became available in Europe and elsewhere, the first of them, Amjevita (adalimumab-atto; Amgen), did not come to market until nearly February 2023, even though it had been approved by the FDA in 2016. As the first biosimilar for Humira to be approved, Amjevita secured 6-month exclusivity, which is the standard for first-to-market generics as well.

This notable market event was followed by several others. Later in June, Mark Cuban Cost Plus Pharmacy announced a partnership with Coherus Pharmaceuticals for Yusimry (adalimumab-aqvh.)⁶ This was followed by the July 2023 launch of several other biosimilars, including Yusimry, adding to the growing list of alternatives to Humira.

However, the current market landscape remains more complex than anticipated. The 9 available biosimilars vary significantly in terms of attributes: high (about 85% of prescriptions) or low concentrations, interchangeable and non-interchangeable formulations, and citrate or citrate-free.⁷ These product characteristics, differing formulary coverage, and pricing structure variability caused confusion for prescribers and patients.

Instead of a straightforward transition to more affordable treatments, the market is characterized by fragmentation and slow adoption. Each biosimilar's array of choices and details has created new hurdles for health care providers and patients trying to navigate the options. This has contributed to sluggish uptake, preventing the competition from driving down prices and enhancing patient access.

Formulary design by the leading PBMs significantly impacts drug utilization and has also created barriers to access and, therefore, uptake.

HIGH COSTS AND PRICING STRATEGIES

Despite the introduction of numerous biosimilars, prices have not decreased as expected. One reason is high introductory Wholesale Acquisition Costs (WAC), the list price set by manufacturers before any discounts or rebates.⁷ This high pricing strategy has significantly dampened uptake and, as a result, biosimilars’ impact on overall medication costs.

This pricing approach can be attributed to several factors. First, the cost of developing and bringing a biosimilar to market can be substantial, leading manufacturers to set higher prices to recoup their investments. Second, the biosimilar market has yet to reach a level of competition that effectively drives prices down.⁸ Unlike traditional generics, which can drastically lower costs through intense competition, the biosimilar market is still maturing, and the absence of aggressive pricing strategies has limited the competitive pressure needed to reduce prices significantly.

High WAC prices for biosimilars create a paradox: while the drugs are marketed as cost-saving alternatives, their affordability is often compromised. Consequently, Humira continues to dominate the market.

ADOPTION AND FORMULARY CHALLENGES

According to Samsung Bioepis's 6th Biosimilar Market Report released in July 2024, Humira has ceded only 23% of its market share to biosimilars from a year before.⁹

As mentioned before, PBM formularies have impacted biosimilar uptake—or lack thereof. Because of agreements between PBMs and the manufacturer of Humira—and other biologic—biosimilars have not been given exclusive placement on lower tiers of the formulary, which would make them available at significantly lower costs.⁴

The manufacturer has utilized strategic pricing and rebate structures to create financial incentives for insurers and health care systems to favor Humira over its biosimilar competitors. This effectively maintains its market stronghold by making it more financially attractive for plan sponsors to stick with the original drug.²

Formulary placement and the variability in available biosimilars have led to confusion and hesitance among physicians and patients to switch from Humira, a drug with a long track record and one they are familiar with, to one that may be unfamiliar and which they may consider unproven. Overcoming these barriers will require adjustments in formulary policies and increased efforts to educate health care providers and patients about the benefits and safety of biosimilars.

For biosimilars to overcome these entrenched market dynamics, they must not only compete on price but also actively work to build their own networks of support among providers and patients.

MISSED OPPORTUNITIES FOR SAVINGS

All of this has meant substantial missed savings. A recent report by IQVIA, a leading global provider of advanced analytics and technology solutions for the health care industry, estimated that broader access to Humira biosimilars could have saved the health care system up to $6 billion in 1 year.² The lack of adoption of biosimilars is a glaring example of how inefficiencies in the health care market can undermine the promise of innovative solutions, leaving substantial cost savings out of reach for patients and the system alike.

REFERENCES

1. Mohan S. FDA approves first biosimilar Zarxio TM (filgrastim-sndz) from Sandoz. Novartis. March 6, 2015. Accessed September 9, 2024. https://www.novartis.com/news/media-releases/fda-approves-first-biosimilar-zarxiotm-filgrastim-sndz-from-sandoz

2. Wingrove P. AbbVie's tight grip on Humira market raises concerns about biosimilars. Reuters. June 7, 2024. Accessed August 27, 2024. https://www.reuters.com/business/healthcare-pharmaceuticals/abbvies-tight-grip-humira-market-raises-concerns-about-biosimilars-2024-06-07/

3. Merelli A. How AbbVie denied Americans access to fair competition for Humira. Quartz. December 14, 2022. Accessed August 27, 2024. https://qz.com/humira-abbvie-competition-from-cheaper-biosimilars-1849876888

4. Reed JM. PBMs aren’t opening access to lower cost biosimilars. Reform is needed now. STAT. August 1, 2024. Accessed August 27, 2024. https://www.statnews.com/2024/08/01/pbm-biosimilar-drugs-ftc-action-needed-anti-competitive-practices/

5. Joszt L. First Humira biosimilar, Amjevita, launches in the United States. AJMC. January 31, 2023. Accessed August 27, 2024. https://www.ajmc.com/view/first-humira-biosimilar-amjevita-launches-in-the-united-states

6. Jeremias S. Mark Cuban’s online pharmacy partners with Coherus Biosciences for Humira biosimilar. The Center for Biosimilars. June 8, 2023. Accessed August 27, 2024. https://www.ajmc.com/view/mark-cuban-s-online-pharmacy-partners-with-coherus-biosciences-for-humira-biosimilar

7. Manalac T. AbbVie’s Humira continues to lose market share as biosimilars gain ground: Report. Biospace. July 12, 2024. Accessed August 27, 2024. https://www.biospace.com/business/abbvies-humira-continues-to-lose-market-share-as-biosimilars-gain-ground-report

8. Manalac T. AbbVie’s Humira maintains market dominance amid biosimilar launches: Report. Biospace. January 18, 2024. Accessed August 27, 2024. https://www.biospace.com/abbvie-s-humira-maintains-market-dominance-amid-biosimilar-launches-report

9. Samsung Bioepis. 4th Biosimilar Market Report. January 18, 2024. Accessed August 27, 2024. https://www.biospace.com/abbvie-s-humira-maintains-market-dominance-amid-biosimilar-launches-report