ICYMI: New Report Shows Biologics Keep Prices High For American Patients And Their Employers, Why Competition Is Critical

WASHINGTON, DC: On the 10th anniversary of the Biologics Price Competition and Innovation Act (BPCIA) that created biosimilars, The ERISA Industry Committee (ERIC) released a study on the potential savings employers and employees could have with increased biosimilars in the marketplace.  Inside Health Politicscovered the study which found that biologics – the most expensive class of pharmaceuticals – amount to less than 1 percent of prescription drugs available, yet they account for 40 percent of total drug spending by employers. 

“This is a welcome study on the positive impact biosimilars can have in the marketplace if they are allowed to enter and compete effectively.  In many cases, biologic pharmaceutical companies create barriars to entry for biosimilars which drives out-of-pocket costs up for millions of Americans.  With increased options in the marketplace for life-saving medications, American patients and employers would save on costly prescription drugs to treat chronic conditions,” stated Matthew Lane, Executive Director of the Coalition Against Patient Abuse.

Key excerpts:

  • “The study tracked large employer spending on two biosimilars, infliximab and filgrastim, and found that for both drugs the biosimilar was less than 74% of the price of the biologic. The study also found that a large employer could save $1.53 million by switching to the biosimilar of infliximab alone, if there was 100% biosimilar uptake.”
  • “The brand version of Infliximab, Johnson & Johnson’s Remicade, dominates the market despite facing biosimilar competition for years. Pfizer, which was the first to get a Remicade biosimilar approved, has been fighting J&J in court since 2017 over J&J’s exclusionary contracting and bundling, which Pfizer says are anti-competitive.”

Below is a link and full text of the article:

Employers Argue For Expansion Of Biosimilars To Help Lower Costs

Inside Health Policy
By Ariel Cohen
April 1, 2020

The ERISA Industry Committee released Tuesday (March 31) research findings of the potential savings to employers and employees from using more biosimilars.

The study, which coincides with the 10th anniversary of the law that created biosimilars, found that although biologics make up less than 1% of prescriptions, they account for 40% of employer’s total drug spending. Also, biologics spending accounted for 93% of growth in drug spending from 2014-2017, yet only two biologics today face “meaningful” biosimilar competition.

“The hope is that [biosimilars] can do for biologics what generics did for the industry years ago,” said Eric Sossa, VP of Global Benefits and Wellness at PepsiCo. Inc. and the ERIC Board Chair.

ERIC President and CEO Annette Guarisco Fildes said employers have a special stake in this as plan sponsors because they need to ensure that their employees have access to affordable medications.

“As prescription drug costs rise, employees are seeing an increased burden of out-of-pocket expenditures for the medications they and their families depend on — biosimilars offer a solution,” Guarisco Fildes said.

The study tracked large employer spending on two biosimilars, infliximab and filgrastim, and found that for both drugs the biosimilar was less than 74% of the price of the biologic. The study also found that a large employer could save $1.53 million by switching to the biosimilar of infliximab alone, if there was 100% biosimilar uptake.

The brand version of Infliximab, Johnson & Johnson’s Remicade, dominates the market despite facing biosimilar competition for years. Pfizer, which was the first to get a Remicade biosimilar approved, has been fighting J&J in court since 2017 over J&J’s exclusionary contracting and bundling, which Pfizer says are anti-competitive. The Federal Trade Commission also recently began investigating whether J&J’s tactics violate antitrust laws.

A commissioned report from consulting firm Segal recommended that employers use their plan design to speed biosimilar uptake by creating incentives for plan participants, addressing biosimilar medicines when negotiating with pharmacy benefit managers, including biosimilars in plan design and pharmacy benefit manager formulary strategies and lowering costs through other means such as prior authorization and step therapy.

For more information, please visit www.capanow.org