Biosimilars offer clinically effective treatment alternatives to branded reference drugs at a lower cost. These products are making inroads in the United States, but it’s still a bumpy ride. Though we’ve recently observed some improvement in the situation, market entry and uptake in the U.S. still consistently lag behind Europe.
Biosimilars face challenges unique to the American healthcare ecosystem, including persistent and lengthy patent litigation battles and dynamics in the payer or pharmacy benefit manager space which can impede biosimilar entry and don’t necessarily favor the lower-priced biosimilars.
In a series of posts this month and next, beginning with this one focused on the role of patent disputes, I will assess what is holding back more robust biosimilar competition.
Biologics are among the most expensive pharmaceuticals, but some of the early market entrants began to lose their exclusivity rights over the past 15 years. Biosimilars are versions of branded biologic products that can be manufactured and sold, theoretically once the originator’s patent has expired. The Food and Drug Administration approves biosimilars based on studies showing that they are “highly similar” to their reference branded biologic. There are no clinically meaningful differences between the originator and biosimilar in terms of safety and effectiveness.
A slew of blockbuster biologics went off patent in the 2010s. And this led to the arrival of biosimilars, beginning with physician-administered products referencing Neupogen (filgrastim), which is used to decrease the incidence of infection following chemotherapy, the breast cancer biologic Herceptin (trastuzumab) and Avastin (bevacizumab) indicated for non-small cell lung cancer.
Though it has sometimes taken a lengthy period of time in each instance for products to gain traction, biosimilars have made inroads, capturing significant shares of the market, as an Amgen report in 2022 depicts.
For biosimilar manufacturers, getting approval from the FDA is half the battle. Once approved, it’s no guarantee that launch will soon follow. Patent litigation initiated by companies producing originator biologics often prevents licensed biosimilars from launching at or near their approval date.
According to Pharmaceutical Technology, the primary reason for delayed market entry in the U.S. concerns patent disputes, in stark contrast to Europe where patent battles are much less common.
Sometimes settlement of patent disputes involves agreements between originator biologic and biosimilar manufacturers to defer market entry. In addition, biosimilar manufacturers may have to pay originator sponsors a royalty upon launch. Other times there is no pending settlement and litigation can drag on for years before there is any deal.
Several Humira-referenced biosimilars were approved in the U.S. in the mid to late 2010s, but couldn’t launch then because of patent litigation. The parties to the lawsuits agreed to delay the launch of approved products until 2023.
By contrast, soon after Humira’s patent expiration, Humira-referenced biosimilars entered European markets, bringing brought about steep discounts in price and substantial cost savings. For example, the price of Humira biosimilars in Denmark decreased by 82% from September 2018 to December 2018. By 2019, the average market share across Europe of Humira-referenced biosimilars was already around 35%.
Meanwhile, in the U.S., ten Humira-referenced biosimilars are on the market, nine of which launched in 2023. At the beginning of this year, biosimilars’ market share was hovering around a measly 2%. The situation changed in the spring when the pharmacy benefit manager CVS Caremark altered its formulary. The PBM removed the originator Humira from its template formulary for new patient starts. But instead of opening up the therapeutic class to the marketed biosimilars, CVS Caremark favored just two, both of which are manufactured by CVS-owned Cordavis and are not the lowest-priced products.
An originator biologic, Neupogen, used to treat neutropenia (abnormally low count of white blood cells named neutrophils) in cancer patients, faced biosimilar competition in Europe as early as 2008, seven years before the U.S. Before a Neupogen-referenced biosimilar even launched in the U.S., average utilization in Europe of biosimilars in the class was around 50% with a 40% discount in price.
Perhaps a prime example of a very lengthy monopoly is the arthritis drug Enbrel (etanercept), which was first approved by the FDA in 1998. As a result of numerous patent filings and subsequent litigation there won’t be biosimilar competition in the U.S. until 2029, despite there being two approved biosimilars: Erelzi in 2016 and Eticovo in 2019. The maker of Enbrel has filed 57 patent applications since the drug came to market in 1998, with 72% of applications coming after initial approval by the FDA.
Meanwhile, since 2016 Enbrel has faced biosimilar competition in Europe. By 2020, across the European continent and the British Isles, the average market share of just the first Enbrel-referenced biosimilar was 36%, ranging from 14% in Austria to 74% in the United Kingdom. And the average market share of the second biosimilar alone was 15%. Overall, the level of biosimilar penetration for etanercept was 61% in Germany in 2019, three years after the launch of the first Enbrel-referenced biosimilar, Benapali.
Though biosimilar diffusion is heterogeneous across European countries, generally speaking biosimilars spanning a wide range of reference biologics were approved and launched earlier in Europe and soon achieved fairly rapid uptake. Take, for another example, biosimilars referencing the non-Hodgkin lymphoma drug Rituxan. Within approximately one year of their launch in Europe in 2017, sales of the originator dropped by 50%.
Without certain patent reforms, it’s likely that the U.S. delays in biosimilar launches will continue. To address these issues, the Federal Trade Commission is expanding patent listing challenges and Congress is introducing legislation.
