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Specialty medications and biosimilars defined
Specialty drugs are high-cost medications that treat rare, complex, and chronic health conditions. The drugs themselves may require special handling, and patients who use them may need to work closely with doctors, pharmacists, and other healthcare providers who can monitor their progress. Many specialty medications are biologics, different from traditional drugs, as they’re made from living organisms to target a specific part of the disease process.
How the patient receives the drug often determines if it is covered by medical insurance or a prescription drug program. For example, when administered in a clinical setting, it’s more likely covered as a medical claim. Self-injections, like Humira, are often covered under a pharmacy plan.
A Biosimilar, as defined by The U.S. Food and Drug Administration (FDA), is a biological product that is highly similar to and has no clinically meaningful differences from an existing FDA-approved reference product. All proposed biosimilar products are compared to and evaluated against a reference product to ensure these requirements are met before being approved by the FDA.
- A reference product is a single biological product already approved by the FDA (such as Humira) against which a proposed biosimilar product is compared. A reference product is approved based on, among other things, a full complement of safety and effectiveness data.
- What does “Highly Similar” mean? A manufacturer developing a proposed biosimilar must demonstrate that its product is highly similar to the reference product by extensively analyzing (i.e., characterizing) the structure and function of the reference product and the proposed biosimilar using advanced technology.
To date, cancer, diabetes, and autoimmune diseases have been the top diseases for specialty biosimilars. As the specialty medication market continues to grow to treat other conditions, including ophthalmology, so will research and development for new biosimilars.
Even though biosimilars for certain specialty medications have been available for over a decade, adopting these drugs has been mixed and slower than anticipated.
Why the adoption of biosimilars seems slow
There is much discussion about why these proven effective and safe biosimilars have such a slow start in the market. Many researchers and industry experts agree that these are two very real contributing factors:
1) Physician barriers remain when switching their patients to a biosimilar.
- On the clinical front, doctors must have confidence that the biosimilar will work and is safe. They want to know they can switch all their patients to the new drugs without worry.
- There is also the operational barrier in that physicians and their staff become responsible for ensuring their patients’ respective insurance companies will cover the less costly medication. Unlike generics, biosimilars can rarely be substituted for its reference product. If providers want or agree to switch patients to biosimilars, they need to write a new prescription, which adds another step in a PBM’s authorization and submission process.
- Economic barriers exist as well. Physicians want to know that the biosimilars are significant enough to justify the disruption to therapy. Some need to see a price difference of 20 to 30% to be motivated for a change.
2) Pharmaceutical manufacturers want to retain their market share of the reference product, so they reduce the cost or offer higher rebates to make the “net cost” similar enough. Many PBMs are retaining both the reference product and at least one biosimilar on their formularies without penalty, to retain the financial benefits.
Why costs continue to soar with specialty medications
Even though more biosimilars are on the market today, one of the key reasons projections show such escalating costs in specialty medications is that new specialty drugs seem to be replacing lower-cost traditional therapies. Pharmaceutical manufacturers are focused on developing these complex targeted therapies, which will only increase total drug spending.
IQVIA, a leading global provider of advanced analytics, technology solutions, and clinical research services to the life sciences industry, notes that specialty medicines will represent about 43% of global pharmacy spending in 2027 and 56% of total pharmacy spending in developed markets in its Global Use of Medicines 2023: Outlook to 2027 report.
It is vital that the industry continues to focus on biosimilars, both the development of new medications and their adoption. Biosimilars can play a significant role in controlling healthcare costs. Today, in some cases, biosimilars may cost up to 50% less than their brand biologics. Projected savings over the next five years are in the billions.
Greater adoption is expected in coming years
Despite a slower start than initially hoped, there are signs that biosimilars continue to move in the right direction. Many pharmacy benefit managers (PBMs) are evaluating the best way to move forward, and some have taken steps to remove “reference products,” like Humira and a few others, from their formulary.
The biosimilar pipeline is also robust. More than 20 unique biosimilars are expected to enter the market over the next decade. More affordable specialty medications are also in the works in new areas of treatment. For example, this year is projected to be pivotal for retinal biosimilars.
Jennifer Perlitch, RPh., Assistant Vice President of Pharmacy at Spring Consulting Group, LLC, continues to follow biosimilar trends and share her insights with the edHEALTH team. “It’s important for institutions to know that the biosimilar market continues to evolve and is not going away. They’re here for the long haul, which I believe will help make specialty drugs more accessible and affordable, providing better access for all to benefit from these breakthrough medications.”
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