I planned to travel to the Texas Association of Business Symposium on Employment Relations. The conference has gone virtual, but for Texans, the topic remains as real and promising as ever: biosimilars. While you may not be able to define a biosimilar, know that it means better access to high-quality medications at lower costs. It’s a win-win for families statewide.
Biosimilars are newer, similar versions of biologic medicines offered at a lower price, the same way generics provide lower-cost competition to brand drugs. The Food and Drug Administration defines biosimilars as “highly similar” to already approved biologic drugs — complex specialty drugs, typically injectables, that treat a range of diseases from arthritis to cancer. Biosimilars are particularly important because biologics are incredibly expensive.
Employers have reported that while specialty drugs, including biologics, account for less than 1 percent of prescriptions, they make up 40 percent of total drug spending. A recent Johns Hopkins University study — groundbreaking research using data from multiple large employers on their employees’ use of the first two drugs to have a biosimilar on the U.S. market — found that biologics are a key driver behind rising costs of large employer health plans, and biosimilars hold the key to lowering costs.
Companies that participated in the study could’ve saved, on average, $1.5 million in 2018 if patients had used the two biosimilars instead.
Nearly half of Texans receive health insurance from their employer. Employers want to ensure employees have access to the latest and best treatments, while making affordable prescription drug coverage available.
The Johns Hopkins study found an increased use of biosimilars “can bring significant savings to large employers and their employees and families.” For example, looking at just two biologic drugs with biosimilars on the market, U.S. companies could’ve saved a total of $1.4 billion in 2018 if biosimilars had been used instead of biologics.
Biosimilars cost up to 30 percent less than biologics, helping lower out-of-pocket costs for patients. That’s a win for Texas employers and employees.
The best way to obtain more savings from biosimilars is for more to be on the market, available for physicians to prescribe and pharmacists to fill. That means more biosimilars need to be approved by the FDA; fewer than 30 have been in the 10 years since FDA was given authority.
Congressional action is needed to ensure approved biosimilars aren’t thwarted by endless litigation preventing them from coming to the market. Only 17 approved biosimilars are available today.
Congress should address patent protections for brand biologics and end patent thickets that prevent biosimilars coming to market, require cost transparency and quality information for patients including through pharmacy benefit managers, stop “pay-for-delay” agreements between biologics and biosimilar manufacturers, and broaden consumer education on biosimilars.
2020 has shown us health care is important. Through biosimilars, Texas employers can ensure employees have access to high-quality specialty medications at lower costs — if federal policymakers do their part.