Demystifying biosimilars

Communiqué

With the costs of medication constantly increasing over the last decades like an inevitable disease of our healthcare system, the advent of biosimilars is perceived by some as the universal remedy. Without taking a stance on this perception, this publication in three parts aims to provide you with enough information to have a clear understanding of this category of drugs and the factors hindering their adoption in the Canadian marketplace.

Bio…what?
Even though they have been around for nearly a decade in our countryi, many are still unsure about exactly what biosimilars are. As biosimilars can only be defined in relation to “reference biologic drugs”, the latter must be defined first.

Biologic products are, simply put, products manufactured using cells (from animal, plant, yeast, bacterial, viral, mold, fungal or human sources). Early examples of biologic products are insulin, successfully purified from a dog’s pancreas by Canadian scientists Frederick G. Banting and Charles H. Best in the early 1920s, and penicillin which was discovered by Scottish scientist Sir Alexander Fleming in 1928.

The term “biologic drugs” includes both “reference biologic drugs” and “biosimilars”, which used to be referred to as “subsequent entry biologics.” Indeed, both categories of drugs are listed in Schedule D of the Food and Drugs Act. The “reference biologic drug” (RBD) is the first drug product to receive market approval from Health Canada for the concerned molecule (e.g. infliximab, adalimumab, etanercept), whereas biosimilars are biologic drug products which secure approval subsequently to the first drug product for that molecule, while partly relying on RBD data, as their former name so aptly described.

Health Canada’s approach to biosimilars
Biosimilars are approved based on the demonstration that they are highly similar to the RBD. To demonstrate this level of similarity, structural, functional and human clinical studies are conducted. Health Canada rigorously evaluates the results of all these studies and confirms that there are no clinically meaningful differences in safety and efficacy between the biosimilar and the RBD before granting market approval to the biosimilar. “Health Canada's rigorous standards for authorization mean that patients and health care providers can have the same confidence in the quality, safety and efficacy of a biosimilar as any other biologic drug.”

Given Health Canada’s high confidence in the comparable quality, safety and efficacy of biosimilars, there should be a strong and rapid adoption of these products across the country. However, sales data reveal a different story.

Market penetration
From January 2016 to March 2018 the biosimilars of etanercept, infliximab, insulin glargine and filgrastim went from about 0.1% of claims in the first quarter of 2016 to barely 15% of claims in the first quarter of 2018. Please note that Omnitrope was excluded because it was launched many years earlier, which would insert a bias in the analysis.

Why are we not seeing a much higher usage of these drugs? Looking at the biosimilar landscape as well as the current provincial reimbursement status may provide some hints in answering this question.

Canadian biosimilar landscape
The first biosimilar approved by Health Canada was Omnitrope on April 20, 2009. This was a little over 3 years after its approval by the European Medicines Agency. At the time Omnitrope was submitted to Health Canada, a pathway for the approval of biosimilars did not exist. The uncertainty surrounding the approval requirements explains in part the delay in approval of other biosimilars. Indeed, it took nearly five years for a second biosimilar to be approved in our country, and we currently only have eight approved for five different molecules.

By comparison, the EMA has approved 39 biosimilar products covering 15 molecules since Omnitrope was first approved on April 12, 2006. As for the United States, even though they started much later with the first biosimilar (Zarxio) approval on March 6, 2015, they now have 9 biosimilar products across 6 molecules.

Not only are approved biosimilars in Canada few, but most of them do not have all the therapeutic indications of the reference biologic drug.

Product Listing Agreements (PLAs)
Another barrier to biosimilar uptake is the conclusion of PLAs between manufacturers of RBDs and payors, whereby the latter agree to provide preferential listing to the RBD in exchange for a reduction in pricing. Although this strategy provides a certain level of financial relief in the short-term, it is questionable in the long-term as insufficient uptake of biosimilars in our country will eventually lead to a lessening of competition by the withdrawal from the market or the absence of filing of these products, which will ultimately allow the RBD to conserve a monopoly and increase its price. It is noteworthy that, once all patents have expired with respect to a drug, the PMPRB no longer has jurisdiction regarding its pricing.

Growing category
The good news is that more of these products are coming. The availability of new biosimilars in the market will be of limited use in controlling the costs of our healthcare system if their use does not increase. Assuming no increase in the market size, each 5% increase of usage of biosimilars in the private sector for infliximab alone represents about $9M in savings (based on the national average claim cost in the private sector).

Considering that the infliximab market has been increasing steadily at more than 10% per year, the savings would be even greater. So why are we not taking greater advantage? We will explore this question in the second part of this article which will be published next month.