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Biosimilars: US Payer Perspectives

  • April 2015
  • -
  • Firstword Pharma

Biosimilars: US Payer Perspectives pulls back the curtain on the US biologics market and provides detailed and actionable insights from 12 expert US payers from a range of different organisations, including Pharmacy Benefit Managers, Managed Care Organisations and Integrated Delivery Networks. In addition, receive an Advisory Highlights management summary which covers key findings from the report.

Spending on biologics is set to reach $100 billion in the US over the next couple of years, and biosimilars are seen as a potential safety valve that can relieve some of the pressure on a healthcare system that is creaking under the weight of declining resources, increasing demands and expensive new product launches.

Caught in the middle of this are the payers, an important stakeholder group whose voice and insight is critically important in understanding the opportunities, challenges and critical success factors that companies operating in the US biosimilars market need to know and understand.

With the US lagging behind many other developed nations in terms of making biosimilars available to its healthcare system, it’s perhaps ironic that recent events have put opportunities and challenges within the US biosimilars market firmly on the pharma industry’s radar. Five 351(k) submissions have now been made to the FDA, and a biosimilar has been approved – filgrastim-sndz from Sandoz, called Zarxio. Companies are partnering and acquiring assets that will allow them to maximise the opportunities, and investors in biosimilar companies have been cheered by share price surges and forecasts from some leading investment banks claiming that biosimilars in the US are on the cusp of greatness.

Biosimilars: US Payer Perspectives provides a much needed tonic to perhaps the overly optimistic sentiment that has seeped into the discussions about the US biosimilars opportunity. Critically it provides unique payer insights on some of the critical market shaping issues that are dominating discussions, including pricing, substitution, switching, indication extrapolation, naming and originator company defensive tactics.

The US market holds many opportunities for biosimilar developers, but in order to leverage these opportunities and maximise chances of success, biosimilar developers and originator companies must read this report to understand what payers really think, and how they will act in response to cheaper biologics becoming available.

Top Takeaways

Understand what payers are focused on in their efforts to cut the costs of biologic therapies on their plans, and how they would prefer to make savings in order to limit disruption to their members
Identify what payers perceive as the biggest drivers and resistors to biosimilar usage in the US, and how health plan design and payer activities could shape the biosimilars market in the US
Learn what payers believe are the critical success factors in the US biosimilars market, including pricing strategies, educational efforts, physician engagement and provision of clinical data
Benchmark potential pricing, market share and source of business across five key classes of product, including modern insulin, filgrastim, EPO-alfa, oncology mAbs and non-oncology mAbs

Get Answers to Critical Questions

What current strategies for cost-containment in biologic therapy are being used by payers in the US?
How do payers expect to manage inclusion of biosimilars on to their formularies, and what critical pieces of information will they need to see before making any decisions?
From the payers’ perspective, what are the current levels of awareness, familiarity and acceptance of biosimilars at the payer and physician level, both personally and generally across each stakeholder group?
What do payers see as the key drivers and resistors of biosimilar usage in the US?
Do payers agree with the current US Food and Drug Administration (FDA) requirements for biosimilars, and what are their expectations for future regulatory refinements?
What do US payers see as the most important reimbursement challenges for biosimilars, including insights on rebating and payment models?
How do payers expect pricing dynamics within the US biosimilars market to evolve, and what are their expectations in relation to the pricing of originator biologics in response to biosimilar competition?
What are the views of US payers in relation to the key market shaping issues of switching, automatic substitution, extrapolation of indications and biosimilar naming?
What do US payers see as the critical success factors for the US biosimilars market, both from a biosimilar and originator biologic manufacturer perspective?

Experts Interviewed

FirstWord interviewed 12 payers and also sought the opinions of a range of commercial, regulatory, legal and clinical experts to deliver contemporary, actionable and robust insight on the US biosimilars market:

Pharmacy Director, Health Plan Division; Pharmacy Benefit Manager
Chief Medical Officer & Chair of P&T Committee; Regional Health Plan
VP, Pharmacy Services; Managed Care Organisation
Executive VP, Rx Analytics; Pharmacy Benefit Manager
Chief Medical Officer; Integrated Delivery Network
VP, Formulary Management; Medicaid Plan
National Senior Medical Director; Managed Care Organisation
Pharmacy Director; Managed Care Organisation
Medical Director; Managed Care Organisation
Chief Pharmacy Officer; Pharmacy Benefit Manager
Pharmacy Director; Regional Health Plan
Pharmacy Director; Managed Care Organisation

About FirstWord Reports

FirstWord is an innovative industry intelligence leader serving over 240,000 Pharma and MedTech professionals worldwide. FirstWord offers a range of products and services designed to help your company gain a competitive edge by making key business decisions with speed and confidence.

FirstWord Reports deliver timely, need-to-know intelligence about your products, your competitors and your markets. FirstWord Reports provide expert views and intelligence on the challenges facing pharma today in these topic areas: Biosimilars, Market Access, Medical Affairs, Sales & Marketing, Technology, Therapy Areas.
FirstWord Pharma PLUS is a personalised and comprehensive intelligence service delivering up-to-the-minute pharma news, insight, analysis and expert views of importance to your company’s success.

Learn more at www.firstwordgroup.com.

Table Of Contents

Biosimilars: US Payer Perspectives
1. Executive summary; biosimilars are finally coming to the US, but uncertainty
and challenges remain
2. Research objectives and methodology
3. Setting the scene; key issues, controversies and dynamics within the
US biosimilars market
3.1.Medicine spending in the US is being driven largely by increased demand for specialty
and biologic therapies
3.The emergence of “generic biotech” has provided payers with a potential solution to
falling resources and surging demand
3.2.Regulatory and legislative reforms in the US have created a pathway toward biosimilars 10
3.3.After a slow start, have the green shoots of a robust US biosimilars market begun to appear?
3.4.Despite positive sentiment and progress, specific uncertainties still remain, and
controversy continues to be a common bedfellow for biosimilars in the US 21
3.5.Opinion continues to be polarised in relation to the understanding of biosimilars,
both at the payer and physician level 23
3.6.Interchangeability and indication extrapolation continue to drive the clinical and
regulatory debate in the US 24
3.7.Limited clarity exists in relation to how biosimilars will be named in the US,
and how switching and pharmacy substitution of biosimilars will be handled 25
3.8.Commercially, significant uncertainty remains in relation to what strategies will
be needed to drive biosimilar usage, and what originator companies can do to s
low down biosimilar adoption 29
3.9.Legal issues are now dominating the agenda in the US, and are expected to
garner considerable attention in the future 31
3.10.The opportunity for biosimilars in the US is significant, but are some of the pieces
of the puzzle missing? 35

4.US healthcare: stakeholders, pricing, reimbursement and payers 36
4.1.US healthcare overview 36
4.2.The US is a mix of private and public payers 37
4.3.Drug reimbursement changes in the US could actually make the prescribing of biosimilars
more attractive to physicians, particularly in Medicare Part B 39
4.4.Pharmacy and Therapeutics Committees play a key role in the review of new medicines
in the US; safety, efficacy and cost data are used to support decision making 41
4.5.Multiple strategies are employed by payers to manage access to high cost specialty
medicines, with prior authorisation being the most common 43
4.6.When approved and ready for review, biosimilars are likely to be scrutinised like any
other branded product 45

5.Awareness of biosimilars remains a key issue, particularly amongst physicians 48
5.1.US payers believe they have high levels of awareness and familiarity in relation to biosimilars,
but knowledge is limited to the economics and potential costs-savings biosimilars could bring 48
5.2.Payers in the US believe that physicians have a low level of awareness of biosimilars,
with specialists potentially knowing more than generalists 51
5.3.Positive European experience is playing a key role in educating payers in the US
about biosimilars, as other sources of information are limited and potentially biased 54
5.4.Payers in the US believe that positive clinical experience is likely to be a key driver of
physician comfort when it comes to using biosimilars, but they raise concerns about
the negative impact of originator company misinformation tactics 58

6.Payers remain concerned about how the FDA will manage interchangeability,
and believe companies offering more data will have the upper hand 60
6.1.Payers believe that the FDA's biosimilar guidelines are fit for purpose, but uncertainty
remains over the key issue of interchangeability 60
6.2.Biosimilar developers that deliver more than the minimum clinical data are likely to be
viewed more favourably by both payers and physicians 62

7.Cost is King when it comes to potential key drivers of biosimilar usage,
and physicians are seen as a key resistor 65
7.1.US payers believe that the opportunity to drive the costs of biologic therapy down
will be the number one driver of biosimilar usage 65
7.2.Payers see physicians as the potential block to healthy biosimilar adoption in the US,
and originator company activity is also a concern 69
7.3.Payers have mixed views as to the potential influence of corporate reputation on
biosimilar adoption in the US 76

8.Favourable policies, regulations and commercial incentives are needed to drive
a robust US biosimilars market 79
8.1.The majority of US payers believe that biosimilars should have a unique name to
avoid confusion and support tracking and tracing of product usage 79
8.2.US payers believe that switching patients from brands to biosimilars needs to be handled
carefully, and that how a biosimilar is approved by the FDA will influence decision making 81
8.3.Automatic substitution seen by US payers as feasible for biosimilars,
but several challenges remain 85
8.4.Extrapolation of indications remains a key of concern for payers, who claim that the
scientific principles remain poorly understood 88
8.5.US payers believe that the payment model for medicines reimbursed via medical benefit
needs to be change to incentivise biosimilar usage 91
8.6.The “rebate trap” weighs heavy on the minds of payers working for commercial plans,
as the risks of increased spending on biologics in a biosimilars world is real and highly likely 94
8.7.Steep discounting by biosimilar manufacturers will be needed to drive usage,
but originator company pricing strategies could slow adoption 97

9.Future opportunities, challenges and critical success factors within the
9.1.US biosimilars market 107
9.2.US payers agree progress is being made in the US, but biosimilars are some way
from becoming as accepted as generics 107
9.3.Where are the potential battlegrounds for future market share in the US biosimilars market? 109
Critical success factors 112

10. Appendix 118
10.1.Experts interviewed for this report 118

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