“Raise of hands,” said AMCP 2023 session presenter Timothy Mok, PharmD, BCPS, BCOP, hematology oncology pharmacy research analyst, Kaiser Permanente. “Who likes to go shopping?” 

Several people in the audience raised their hands. 

“Good, because we’re going to be spending a lot of money,” Dr Mok said. 

In 2022, the global market of biologics was valued as $382 billion, according to the session leaders. Oncology medications are predicted to comprise the largest portion of global drug spend in coming years, with an estimated reach of $300 billion by 2026. Oncology drugs have an estimated compound annual growth rate (CAGR) of 10%, while the CAGR for biologics is estimated at 13%.

By comparison, biosimilars have an estimated CAGR of 30%. 

The biosimilar market is “growing better than my stock portfolio,” Dr Mok joked.

The speakers explained there are many reasons why biosimilars have such an impressive growth outlook. Many biosimilars are coming to market for highly utilized products, and physicians are becoming more likely to adopt biosimilars. The market for biosimilars is also projected to grow as some reference products lose patent protection in coming years. 

Standards set by the US Food and Drug Administration (FDA) dictate that biosimilars must be highly similar to an existing FDA-approved reference product and be manufactured with the same types of living sources. A biosimilar can be rejected if it does not have the same route of administration, strength, dosage, potential effectiveness, and potential adverse events as the reference product. 

The speakers introduced 3 crucial terms necessary to understanding biosimilar utilization: interchangeability, switching, and substitution. 

“Interchangeability” is a regulatory designation by the FDA that a biosimilar is an interchangeable product for a reference drug. “Switching” refers to the process of a provider exchanging products based on the idea of interchangeability. “Substitution,” on the other hand, is a pharmacy-centric term that means pharmacists are switching products without a provider’s authorization. 

From a global perspective, the FDA has the most stringent biosimilar regulations. The Pharmaceutical and Medical Devices Agency only prohibits pharmacists from substituting biosimilars, and the European Medicines Agency permits biosimilar interchangeability in the European Union and pharmaceutical substitutions in some countries. 

Biosimilar switching impacts costs by placing more drug options in the market and driving up price competition. Expanded biosimilar availability also increases patient access, speakers said.

Some reference products, such as infliximab, did not experience catastrophic price erosion when biosimilar alternatives were introduced. This is likely because the reference product had a long history of patent protection, research and discovery were very dense, or patients were loyal to the reference drug. 

“Despite all of this, we are still seeing global biosimilar savings. This year we’re predicted to save about $25 billion dollars, and in 2027, about $150 billion dollars,” Dr Mok said. “I calculated how many Costco hotdogs we could buy with $150 billion dollars, and every person in the world would get 12 hotdogs.” 

Currently, many biosimilars are already in the US market, and many more biosimilars are nearing launch. More oncology, non-oncology, and inflammatory disease-related biosimilars are expected to be released soon, speakers said. 

Strategies for Implementing Biosimilars 

The speakers shared findings from a survey in which hematology-oncology pharmacists cited several barriers to integrating biosimilars. The obstacles included insurance coverage, space for housing medications, provider and patient education, information technology (IT), and a lack of policy procedures. 

To ensure successful adoption, time should be dedicated to properly educating both patients and providers, speakers said. They recommended conducting utilization reviews to identify high-cost biologics with biosimilar alternatives and to optimize use in the appropriate health care setting. Policy reviews should also be considered for therapeutic substitution. Additionally, leveraging IT and contracting to designate preferred biosimilars can help simplify the process, speakers said.

Scott A. Soefje, PharmD, MBA, BCOP, FCCP, FHOPA, director, pharmacy cancer care, Mayo Clinic, shared from an institutional perspective how biosimilars were implemented and how to use these tactics more broadly. 

“We had to first think which strategy to use for approaching biosimilars,” Dr Soefje said. “We decided to commit to the overall lowest cost of care and declare biosimilars therapeutically equivalent.” 

The Mayo Clinic team was able to declare drugs therapeutically equivalent and give pharmacies permission to swap drugs based on set protocols and preferred products, without provider consent. 

“Make sure you check your state laws because you may not be able to do therapeutic substitution,” Dr Soefje advised.

Mayo Clinic also chose to contract for the lowest net cost product and make all biosimilar options available to account for variations in prescribing preferences between payers and providers. The institution also streamlined the biosimilar substitution process so providers would not need to learn to use several new products at once. 

From a formulary perspective, challenges included educating patients and providers on biosimilars and selecting preferred products to recommend first due to drug storage constraints. Operationally, providers were confused by the new workflow at first. The electronic health record (EHR) had to be expanded to include all the biosimilars, and financially, there were inherent losses such as the cost of changing systems, contracting, and payer demands. 

In their formulary review, Dr Soefje and his colleagues learned the biosimilar approval process is not heavily concerned with testing biosimilar safety and efficacy, unlike approval for reference products where these are top concerns. 

“Biosimilar clinical studies, in most cases, are just confirmatory,” Dr Soefje said. 

Regarding their formulary considerations, Dr Soefje and his team were largely concerned with confirming adequate similarity assessment, trustworthy manufacturing, and quality control.

In the current formulary landscape, there are more incentives to use expensive drug options due to product preferences and rebates. For this reason, biosimilars may not always be associated with the lowest health system costs or total cost of care. 

“Instead of allowing the health care system to pick which product to use, we drive the cheapest one as we’d do in the generic process. Payers are now negotiating with pharmaceutical companies and selecting the product that is on their formulary,” Dr Soefje said. 

Formulary variations and demand for preferred drugs over recommended drugs created sourcing and service complications for their team, Dr Soefje said. These factors also increased the risk of pulling incorrect products. 

Unexpected health system costs arose, Dr Soefje said. IT services were needed to make EHR changes, and declining average sales prices can cause the cheapest biosimilar options to not have positive Medicare reimbursement. 

Despite many barriers, Dr Soefje said the new biosimilar workflow was a success for the Mayo Clinic. 

“We’ve saved $35 million dollars over a 2-year period…by conversion of biosimilars,” Dr Soefje said. 

For those thinking about operationalizing biosimilars, Dr Soefje advised working closely with key players in: 

• formulary management; 
• pharmacy informatics;
• pharmaceutical supply chain contracting/purchasing;
• pharmacy operations;
• revenue cycle prior authorization; and
• providers and nursing.

He advised anyone curious to try biosimilar conversion to identify outliers, leverage resources and early adopters, and target communication with stakeholders including patients and payers. Biosimilar integration relies on these groups embracing change, making cost-driven decisions, and being open to education, Dr Soefje said.