Exploring Biosimilar Adoption and Policy Impacts in Oncology

Featuring Michael Kolodziej, MD, Consultant, Canopy

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Michael Kolodziej, MD: Hi, I'm Mike Kolodziej. I'm a medical oncologist. I practiced for over 25 years in both academics and the community setting with the US Oncology Network. In 2014, I went to Aetna and ran oncology programs for about 4 years. I was at Flatiron Health briefly, and then I was a consultant in Washington, DC, for 5 years with AbbVie. I'm mostly retired now. I still work with a startup called Canopy. But most of the time, I write my health care blog and try to keep up with current events.

How do biosimilars fit into value-based care models, and what role do they play in improving outcomes while controlling costs?

Dr Kolodziej: I think biosimilars have proven to be a critical component of value-based care in the sense that it is a relatively straightforward way to approach the prescribing of expensive biologic agents in a value-driven way. Let me explain.

It's easy for us to forget that generic medicines didn't always exist. They came into existence as a consequence of the Hatch-Waxman Act in the 1980s. Likewise, biosimilars, which in many ways are conceptually similar to generics, only came into common availability fairly recently because of an act of Congress that provided a pathway for them to be regulated and paid for.

Although it's a mistake to equate the complexity of synthesizing a biosimilar with the complexity of synthesizing a generic drug, conceptually, they have wound up filling exactly the same need, which is that after a biologic has been around for a long time and it goes off patent, biosimilars have provided a lower-cost alternative, which physicians have embraced prescribing as an appropriate therapeutic alternative.

Now, why is that important? Because based on data we know from the oncology care model, perhaps as much as 70% of the total cost of care of a patient receiving systemic therapy for malignancies is the cost of the drug. Some of the most expensive drugs are the biologics. Once you get into a mature biosimilar market, the cost for that drug can drop by half easily. So it really allows the physician who's participating in a value-based contract to choose a less expensive but therapeutic equivalent alternative.

What impact do recent trends in biosimilar pricing and competition have on the sustainability of value-based care initiatives?

Dr Kolodziej: It helps. I think that what we learned during the end of the oncology care model was that biosimilar adoption was closely linked to success in the model, which means that insofar as we continue to have a stream of biosimilars that are available to physicians in these models, that will be critical. The reason that will be critical is because everything that comes out that's new as a single-source drug is expensive. I don't expect to wake up tomorrow and find that immuno-oncology (IO) therapy, the PD-1, PD-L1 drugs in the treatment of lung cancer, won't continue to be very important. Of course, their biosimilar availability is on the near horizon. That's a good thing for value-based care. But, again, it's critical that we continue to have a steady stream of these biosimilar alternatives, because if we continue to be compelled to work within total cost-of-care models, and if we continue to face a world in which the majority of costs are drug-related, medical cost inflation due to single-source drugs would make it very hard to succeed.

How are recent policy changes, such as CMS initiatives or state-level regulations, influencing payer strategies for biosimilar adoption?

Dr Kolodziej: I don't think there are a lot of policies. The one thing that does have some impact is the Inflation Reduction Act (IRA) and Medicare price negotiation because, in the first group of medical injectables, we will see PD-1, PD-L1 drugs negotiate a price that will probably be something on the order of a 25% haircut for those drugs, which means that big value—the big price reduction—you see in a mature biosimilar market will be more like a stepped reduction in the price of the drug.

But other than that, I don't know of anything policy-wise that's having a huge impact on biosimilar adoption. I think the physicians have largely voted with their electronic pen, if you will.

With the growth of personalized medicine in oncology, how can biosimilars coexist with or complement highly targeted treatments?

Dr Kolodziej: So they're actually complementary, right? If we just think for a second about non-small cell lung cancer treatment guidelines, the recommendation is that all patients with non-small cell lung cancer should undergo comprehensive genomic profiling, and if they have an actionable mutation, they should be treated preferentially, initially, and primarily with targeted therapy. But in today's world, none of those targeted therapies are actually curative. So when resistance mechanisms kick in, then we do have the biologic agents to fall back on.

Now, what we haven't seen is a lot of information about combining biologics with targeted therapies. I think we may see more of that over the years, particularly in common malignancies. But at the moment, I would say they're complementary and they fill different needs. For the patients who don't have actionable mutations, obviously, the IO therapy, specifically in non-small cell lung cancer, is the principal way we approach those patients.