Final FDA guidance is progress toward biosimilar access, competition

There’s an ongoing national debate about the best ways to drive down high drug prices. One recurring theme is the need to increase marketplace competition for high cost brand drugs. The Food and Drug Administration (FDA) has responded by approving a record number of drugs in recent years, and calling for transparency in the drug supply chain. Increasingly, there’s broad bipartisan support for legislation to reduce drug spending and pave the way for increased biosimilar adoption.

Recently, the FDA finalized rules for when a biosimilar – a nearly identical copy of an approved drug – is interchangeable with its biologic reference drug. Biologics are complex drugs made using live organisms and treat serious conditions like cancer and autoimmune conditions. Biosimilars are highly similar to their reference products, making them equally safe and effective. The other benefit is they are to be priced at a lower cost than their biologic reference product.

Currently, the FDA has approved 19 biosimilars, but only seven have launched in the U.S. These seven are biosimilars to four reference drugs. To date, there has been no clear path for a biosimilar to earn an interchangeability designation, meaning it cannot automatically be substituted without a doctor specifically prescribing it.

As a supplement to the FDA’s draft version of the policy, released in January 2017, this long-awaited guidance is intended to make it easier for biosimilar makers to compete with the established biologic products. Once a biosimilar is designated as interchangeable, pharmacists may be able to automatically substitute the biosimilar for the reference brand, like a traditional generic is substituted for a brand-name drug now. This will allow pharmacists and pharmacy benefit managers (PBMs) greater flexibility in moving to biosimilar products, which should increase their utilization and may save health plans and their members money.

The final guidance also defines how to test the biosimilars using so-called “switch studies,” to ensure the copycat drug works as well as its reference biologic. For a switch study, a patient moves back and forth between the branded biologic and the biosimilar to show the interchangeable product produces the same clinical result and there are no negative effects on the patient. These real-world studies will help increase provider and member confidence that the biosimilar and reference product are highly similar and can be used interchangeably.

The majority of biosimilars now process on medical benefit where most PBMs traditionally do not have as much influence on the selection of preferred products. This guidance paves the way for potential cost savings for biologics that will process on the pharmacy benefit. As biosimilars come to market that process on the pharmacy benefit, (e.g., Humira® and Enbrel®) interchangeability will allow PBMs to more easily select preferred products to drive competition and lower drug cost, like how generic drugs have helped mitigate costs for the past 30 years.

Prime supports the use of interchangeable biosimilars because they are equally as safe and effective and will eventually bring some needed competition to the market. This is an important development because it increases confidence that the biosimilar and reference product are highly similar and can be used interchangeably.