Over the past decade, biologic drugs have changed the drug landscape and have been both a blessing and a curse. For employees who are treated with these drugs, it can mean the difference between permanent disability and being a fully productive employee. For employers who sponsor a benefits plan, the cost of these drugs can be a significant burden.  The cost for several of the most common biologic drugs are in the range of $20,000 to $30,000 per year; and new treatments for Hepatitis C, that offer a 95% cure rate, can run in excess of $100,000 for a one-time treatment cycle.  Biologic drugs now account for about a quarter of total drug costs in Canada and last year grew at a rate of 12% vs. 6% for the total drug market.  However, there may be some cost relief on the horizon from biosimilars, says Bruno Mäder, Vice-President Biologics and LOE brands for Merck Canada.

Biologic drugs are expensive but there are many factors that contribute to the high cost.  Traditional “small molecule” drugs are made from chemicals and are relatively easy to copy.  Generic development of a small molecule drug costs about $1 to $5 million USD and takes two to three years to develop.  By comparison, biologic drugs are medicinal products made by or derived from living organisms and are 100 to 1000 fold larger in molecular weight than traditional drugs, says Mäder.  Biosimilars or subsequent entry biologics (SEBs) have a demonstrated similarity to the original drug but unlike generic drugs are not interchangeable; and they generally cost about $100 million USD and take five years to develop.

While generic drugs can be as much as about 80% lower than the cost of the equivalent brand drug, the cost of biosimilars offer savings of about 30%.  This can still add up to a lot of money for plan sponsors on a drug that costs tens of thousands of dollars. However, Mäder says in order for biosimilars to be an option for plan sponsors, there needs to be a viable marketplace.  It’s been about nine months since Inflectra (the biosimilar version of Remicade) was introduced to the Canadian marketplace and only 391 prescriptions have been filled in that time period vs. about 30,000 for Remicade. If this was a small molecule drug, sales of the original would have dropped by about 80% to 90% within the first few months as patients migrate to the new generic.  There are several forces working against biosimilar entry in Canada.  Originators are motivated to protect their brands and offer incentives though patient support programs; and there is reluctance from physicians to accept biosimilar drugs and prescribe them.

Leila Mandlsohn, Pharmacy Consultant at Green Shield Canada says “physicians won't change prescribing unless they have to due to coverage.” A lot more drugs with higher price tags are coming at us faster.  The current lower cost alternative (LCA) and generic substitution policies do not apply to SEBs as they are not deemed to be “interchangeable.”  Mandlsohn said, “we need to offer innovative solutions.” Carriers need to play a bigger role like assigning preferential listing to SEBs and she says there is currently some movement to require SEBs be prescribed for new prescriptions, when the patient has not already started taking the original.  She also says many physicians are unfamiliar with SEBs, so we need to increase their familiarity of these drugs through education in order to help increase their acceptance.  While SEBs are not deemed to be interchangeable and automatic substitution at the time of dispensing would not be appropriate, there is ongoing research into the safety and efficacy of switching or transitioning from the original to the SEB product.  While it is not GSC’s policy to promote switching at this time, they expect the research to suggest there’s no reason why patients can’t switch to SEBs through a controlled and intentional environment.  Mandlsohn says switching is often done with insulin (which is a biologic) so why not SEBs in time?

If there are a few key takeaways from last Thursday’s CBPI event, it’s that biosimilars or SEBs offer plan sponsors the opportunity to reduce drug plan costs.  However, carriers and private payers must take an active role in fostering the creation of a viable market for SEBs by changing drug plans to encourage the use of SEBs where feasible and help increase acceptance of these drugs by physicians.

–          Kenneth MacDonald