Biosimilar Market Faces Hurdles Despite Potential for Savings
Table of Contents
- 1. Biosimilar Market Faces Hurdles Despite Potential for Savings
- 2. The Rising cost of biologics and the Biosimilar solution
- 3. Patent Battles and Delayed Entry
- 4. The Role of Pharmacy Benefit Managers
- 5. Confusing Pricing Strategies
- 6. The Path Forward
- 7. Understanding Biosimilars: A long-Term Outlook
- 8. Frequently Asked Questions About biosimilars
- 9. What specific contractual clauses utilized by PBMs actively discourage or prohibit the substitution of biosimilars for reference products?
- 10. U.S. Biosimilar Market Hindered by Drug Makers and Payers’ Practices
- 11. The Challenges to biosimilar Adoption in the U.S.
- 12. Brand-Name Drug Manufacturer Strategies
- 13. Payer Practices limiting Biosimilar Access
- 14. Impact on Healthcare costs and Patient Access
- 15. The Visilizumab Example & Biosimilar Complexity
Washington D.C. – The promise of lower prescription drug costs through the increased availability of biosimilars is facing significant headwinds in the United States, despite demonstrated success in othre global markets. While intended to provide more affordable alternatives to expensive biologic medications, a complex interplay of patent litigation and the practices of pharmacy benefit managers (PBMs) is hindering widespread adoption and limiting savings for patients.
The Rising cost of biologics and the Biosimilar solution
Biologic drugs, manufactured from living organisms, represent a significant portion of pharmaceutical spending, often used to treat conditions like diabetes, cancer, and autoimmune diseases. When patents on these drugs expire, biosimilars – highly similar, yet not identical, versions – can enter the market, offering the potential for substantial cost reductions. The first U.S. biosimilars arrived in 2015, but their impact has been less dramatic than anticipated.
Patent Battles and Delayed Entry
One major obstacle is the aggressive use of “patent thickets” by brand-name drug manufacturers. These thickets involve layering numerous patents around a single drug, creating a complex legal maze that biosimilar manufacturers must navigate. A recent court case affirmed the legality of this practice, even with over 130 patents protecting a single drug, effectively delaying competition. The biologic Humira (adalimumab), used to treat autoimmune conditions, serves as a prime example; despite FDA approval of biosimilars years prior, legal challenges prevented their launch until 2023.
Even after launch, humira maintained a dominant 77% market share in early 2025. By contrast, in Europe, biosimilars referencing Humira quickly captured over 50% of the market within a year of their introduction, with some countries reaching over 95% market share shortly after patent expiration.
The Role of Pharmacy Benefit Managers
the role of PBMs, which negotiate drug prices with manufacturers and determine which drugs are covered by insurance plans, is also under scrutiny. Rather than prioritizing the lowest-cost biosimilars, PBMs have increasingly favored private-label versions manufactured by affiliated companies.
This practice raises concerns about conflicts of interest, as PBMs directly benefit from sales of their own products.In April 2024, CVS Caremark launched a private-label Humira biosimilar while excluding other, perhaps cheaper options. Similar strategies are now unfolding with Stelara (ustekinumab), another widely used biologic.
| Drug | Reference Market | Biosimilar Market Share (Within 1 Year of Launch) |
|---|---|---|
| Humira (Adalimumab) | United States | <3% |
| Humira (Adalimumab) | Germany | >50% |
| Humira (Adalimumab) | Denmark | 95% |
did You Know? According to IQVIA, 90% of the 118 biologics losing exclusivity in the next decade currently have no biosimilar candidates in development.
Confusing Pricing Strategies
The situation is further intricate by complex pricing structures. OptumRx, a subsidiary of UnitedHealth Group, is offering a stelara biosimilar at both 81% and 5% below the original drug’s price. Meanwhile, other biosimilars with even deeper discounts, like Yusimry at 85% off, are excluded from the OptumRx formulary. This approach mirrors tactics observed with Humira biosimilars, leaving patients and employers struggling to understand the true cost of their medications.
pro Tip: Patients should always discuss their medication options with their doctor and pharmacist to understand potential cost savings and ensure they are receiving the most appropriate treatment.
The Path Forward
Addressing these challenges requires a multi-faceted approach, including reforms to patent laws to prevent the creation of artificial monopolies and greater openness in PBM practices. Increased competition and a focus on patient access to the lowest-cost options are critical to realizing the full potential of biosimilars and making expensive medications more affordable.
Understanding Biosimilars: A long-Term Outlook
The story of biosimilars is a critical component of the ongoing debate about drug pricing and access in the United States.While the initial rollout has been slow and fraught with challenges, the long-term potential for these medications to lower healthcare costs is significant.Continued monitoring of market dynamics, regulatory changes, and PBM practices will be crucial to ensure that patients can benefit from these affordable alternatives.
Frequently Asked Questions About biosimilars
Q: what are biosimilars?
A: Biosimilars are biologic products that are highly similar to an already approved biologic drug, with no clinically meaningful differences in safety, purity, or potency.
Q: Why are biosimilars cheaper than brand-name biologics?
A: Biosimilars are developed after the patent on the original biologic expires, reducing research and development costs, and increased competition drives prices down.
Q: What is a “patent thicket”?
A: A patent thicket is a dense web of overlapping intellectual property rights used by brand-name drug manufacturers to extend market exclusivity and delay competition from biosimilars.
Q: How do pharmacy benefit managers (PBMs) influence biosimilar access?
A: PBMs determine which drugs are covered by insurance plans, and their decisions can favor more expensive options, including private-label biosimilars, over lower-cost alternatives.
Q: What can be done to improve biosimilar uptake in the U.S.?
A: Reforms to patent laws and greater transparency in PBM practices are needed to foster competition and ensure patient access to affordable biosimilars.
Q: Are biosimilars as safe and effective as brand-name biologics?
A: Yes, biosimilars are rigorously reviewed and approved by the FDA and must demonstrate they are highly similar to the original biologic, with no clinically meaningful differences in safety or effectiveness.
What are your thoughts on the role of PBMs in shaping the landscape of biosimilar access? Do you believe current regulations adequately address the challenges facing biosimilar manufacturers?
What specific contractual clauses utilized by PBMs actively discourage or prohibit the substitution of biosimilars for reference products?
U.S. Biosimilar Market Hindered by Drug Makers and Payers’ Practices
The Challenges to biosimilar Adoption in the U.S.
Despite the potential for significant healthcare cost savings,the U.S. biosimilar market remains underdeveloped compared to Europe. A complex web of tactics employed by brand-name drug manufacturers and pharmacy benefit managers (PBMs) actively hinders biosimilar adoption. This isn’t a matter of scientific uncertainty; the FDA has a robust approval process for biosimilars, demonstrating their equivalence to reference products. The roadblocks are primarily economic and strategic.
Brand-Name Drug Manufacturer Strategies
Brand-name pharmaceutical companies aren’t passively accepting the rise of biosimilar competition. They employ several strategies to protect their market share, often delaying or preventing meaningful biosimilar uptake:
Patent Thickets: Filing numerous patents, even on minor formulations or delivery methods, around the original biologic. This creates a legal maze that biosimilar manufacturers must navigate, considerably increasing development costs and timelines.
Citizen petitions: Submitting petitions to the FDA raising concerns (often unsubstantiated) about biosimilar safety or manufacturing processes,causing delays in approval.
Authorized Generics: Launching their own “authorized generics” – versions of the original biologic sold at a lower price – to undercut biosimilar pricing and discourage market entry.
Risk Evaluation and Mitigation Strategies (REMS): Creating complex REMS programs that biosimilar manufacturers must replicate, adding to their costs and logistical burdens. While REMS are sometimes necessary for patient safety, they can be overly burdensome.
Direct-to-Consumer Advertising: Campaigns designed to create patient and physician hesitancy towards switching to biosimilars, emphasizing perceived risks or differences.
Payer Practices limiting Biosimilar Access
While brand-name tactics create initial hurdles, payer (PBM and insurance) practices often determine whether biosimilars actually reach patients. These practices frequently prioritize rebates and discounts from brand-name manufacturers over the potential savings offered by biosimilars:
Rebate agreements: PBMs negotiate large rebates with brand-name drug companies in exchange for preferential formulary placement. This incentivizes them to favor higher-priced biologics with larger rebates,even if a lower-cost biosimilar is available.
Formulary Restrictions: Placing biosimilars on higher tiers of the formulary, requiring higher co-pays for patients, or implementing prior authorization requirements.
Step Therapy: Requiring patients to fail on the brand-name biologic before being allowed to switch to a biosimilar.
Lack of Biosimilar-Specific Policies: Many payers lack clear policies promoting biosimilar use, leading to inconsistent coverage decisions.
Contractual Barriers: PBM contracts often include clauses that discourage or prohibit the substitution of biosimilars for reference products.
Impact on Healthcare costs and Patient Access
These combined strategies have a significant impact:
delayed Savings: The anticipated cost savings from biosimilars are not being fully realized,contributing to rising healthcare expenditures.
Reduced Patient Access: Patients may be denied access to possibly life-saving treatments due to cost or formulary restrictions.
Innovation Stifled: The lack of a robust biosimilar market discourages investment in biosimilar development.
Increased Financial Burden: patients often bear the brunt of higher drug costs through increased premiums and out-of-pocket expenses.
The Visilizumab Example & Biosimilar Complexity
The development and potential market entry of biosimilars like Visilizumab (维西珠单抗), a biosimilar reference antibody with a heavy chain sequence QVQLVQSGAEVKKPGASVKVSCKASGYTFISYTMHWVRQAPGQGLEWMGYINPRSGYTHYNQKLKDKATLTADKSASTAYMELSSLRSEDTAVYYCARSAYYDYDGFAYWGQGTLVTVSS and a light chain sequence DIQMTQSPSSLSASVGDRVTITCSASSSVSYMNWYQQKPGKAPKRLIYDTSKLASGVPSRFSGSGSGTDFTLTISSLQPEDFATYYCQQWSSNPPTFGGGTKVEIK, illustrates the complexity. Even with