Biosimilars Could Fuel Potential Cost Savings in Health Care

Fran Gregory discusses the challenges of rising pharmaceutical costs and the opportunity presented by biosimilars. She noted that median drug costs upon market entry now exceed $200,000 annually. Biosimilars were highlighted as one of the few areas in health care offering significant savings potential, with projections of $180 billion in savings for the US system by 2025. Additionally, payers and PBMs are increasingly accepting biosimilars onto their formularies. Both cost savings from biosimilars and innovation in emerging high-cost therapies will be important to balance escalating pharmaceutical expenditures with investment in new treatments.

Image Credit: Carl - stock.adobe.com

Q: What are some of the biggest concerns regarding new and novel medications for patient access and adherence?

I think some of the biggest challenges when we think about new medications that are coming to market today is really the increasing costs of pharmaceuticals kind of across the board. The average or the median cost of medications that came to market in 2023 were exceeding $200,000 per year for 1 prescription medication. So clearly, this is a trend that we are continuing to see. If you look at past years, we've continuously seen an increase in in drug prices as they're coming to market. We're just getting into those more specialty drug areas or precision care types of treatments, cell and gene therapies obviously, contribute to some of these increases in the costs. So I think the cost will continue to be a challenge for patients, a challenge as far as access and honestly a challenge across the entire health care system, not only in the US, but well, worldwide.

Q: How can biosimilars help to address these concerns?
Biosimilars are 1 of the 2 areas in health care where we could actually see significant savings. So if you think about the increase in costs, not only in pharmaceuticals, but in health care, overall hospital costs are higher, provider costs are higher, health care premiums are higher. So we're seeing just escalating costs across health care in general. Biosimilars are one of the exceptions to that rule. So one of the very few exceptions to that rule, which makes it extremely important that as health care providers, we do everything that we can to optimize the savings opportunity. It's been estimated that if optimized, biosimilars could save the US health care system over $180 billion through 2025. So we really do have an opportunity to see some of those costs go down so that we can mitigate those increases that we're seeing and contribute to a more sustainable health care system.

Q: How can biosimilars help long-term affordability and access to patients?
Biosimilars are really important because not only are they coming to market at lower costs, they're also coming to market and being more broadly accepted on payer PBMs formularies. So both of those things are really at the crux of patient access. So, if you think about the cost of biosimilars, those biosimilars coming to market today are launching anywhere from 5% off of the reference product price, all the way down to over 85% off of the WAC price of the reference product. So these price differences obviously will in some way, shape or form be passed on to patients and the health care system. So really an exciting time for biosimilars not only because we're seeing more biosimilars coming to market, but we're also seeing those prices at launcg at significantly low, low rates. Revisiting that payer PBM piece as well, some of the more recently launched, biosimilars are being accepted almost immediately, and being added to PBMs and payers formularies or preferred drug lists. So I think that the payor PBM market is also becoming more accepting of biosimilars and seeing the value and the savings that can be a result from that.

Q: As part of the session, biosimilars savings could potentially help fund innovative and emerging therapies. Are there any potential concerns with this approach to cost management in health care?
I think just kind of starting with the opportunity for savings in health care is just a huge opportunity that we can pass out, we cannot let the promise of biosimilars pass us by and not take advantage of it, because truly it is one of the few areas where we are able to see savings and health care. So if you think about the flip side of that some of the emerging therapies and by emerging therapies, we consider cell therapy, gene therapy, by specific some of those unique and complex modalities of care that are obviously coming to the market at very high prices. There seems to me that we could strike a balance, if we support and we optimize both of those cost savings opportunities and those opportunities for innovation and future investment. We can't just keep on embracing escalating prices across the board. We've got to find some of those savings somewhere, and biosimilars really are where we can find those savings, and if course it's not a direct tie savings from biosimilars don't automatically pay for the next multimillion dollar gene therapy, but certainly when you look at the US health care system as a whole, some of those savings potentially could certainly fuel innovative treatments like cell and gene therapies.