How will Biosimilar drugs affect your plan?

The high cost of some drugs presents a difficult situation for plan sponsors. Plan sponsors want to provide members with access to the best treatment options while managing costs now and into the future. Biosimilar drugs have entered the Canadian market and they have the potential to deliver results at a lower cost. Health Canada has approved five biosimilars so far including a biosimilar for Remicade.

With many biologic drug patents soon expiring, the opportunity for biosimilar drugs (also called subsequent entry biologics) to be integrated into the market is upon us.

A biosimilar is a drug demonstrated to be highly similar to a biologic drug that is already authorized for sale. They are approved based on a comparison to a reference drug. Biosimiars may enter the market after the expiry of reference drug patents and data protection.

Generic drugs vs. Biosimilars

Generic drugs are small molecules that are chemically synthesized and contain identical ingredients to their brand name reference drugs. Biosimilars are not the same as generic drugs. Biologics and biosimilars are made in living cells rather than with chemicals therefore a biosimilar and its reference biologic can be shown to be similar but not identical. It should be noted as well however that while chemically produced generic drugs may use the same formula, slight changes in the manufacturing process may result in variances of the generic drug as well over subsequent batches.

How can plan sponsors encourage use of biosimilars?

Plan sponsors could consider supporting lower priced biosimilars by designing plans to encourage members who are starting on a biologic drug to try a biosimilar instead. Members can try a biosimilar first. If they are not successful on the biosimilar, they would then move to the brandname biologic.
Another option could be for plans to limit reimbursement for the brand name biologic to the cost of the biosimilar (also known as maximum allowable cost).

It needs to be noted however that biosimilars are not identical to the originator biologic drug – they are not a generic biologic. Biologics are similar but not identical. Treatment of a chronic disease may not result in increased uptake of the biosimilar but treatment for an acute condition that is regularly prescribed to new patients could see increase in the use of biosimilars.

Regardless the increased introduction of biosimilars to the Canadian marketplace has the opportunity to provide increased options for members and decreased costs for plan sponsors.