The rise of ‘generic’ biologics should mean cost savings for employer drug plans

Most of us are familiar with the difference between brand-name drugs and  their  generic  equivalents.  Basically, the generics are “bio-equivalent” to the brand names and are, for all practical purposes, the same — only cheaper. Now there’s a new term, and a whole new area of prescribing options, that we will be hearing a lot more about in  the  coming  months  and  years: Biosimilars.

Biosimilars can’t strictly be described as “generic” versions of biologic drugs although, like the generics, they do provide less expensive options  to  patented  brand-name  biologics.

Biologic drugs are different from the  “regular”  drugs  people  are  familiar with in a couple of important ways. First, they are produced by living organisms, as opposed to being synthesized in a chemical process. Second, they are far, far more complex  in  their  molecular  structure  than regular drugs.

Biologics  first  made  news  in  the  1980s  when  researchers  began  tinkering  with  DNA  to  produce  complex proteins and other natural sub-stances that could not be chemically assembled in a test tube.

They  also  went  further,  altering  the genetic code of living cells from animals  and  plants  to  transform  them  into  little  biological  factories.  These new  cells  would  then  produce a whole range of biological substances: insulin, hormones, antibodies, enzymes — the list is a long one.

The biologics that resulted have been on the market for years, and the names are familiar: Remicade, a treatment for auto-immune disorders including arthritis is one, while others include Humira, Enbrel and Lantus, to name just a few. In fact, 10 of the 25 top-selling medications are biologics.

These  are  all  brand-name  biologics, with the patents owned by the companies that produce them. And,  as  with  brand-name  drugs,  those  patents  run  out  eventually,  so other companies can enter the market.

But it’s not quite as simple as just producing an identical molecule in the  lab.  Biologics,  remember,  are  made by living organisms, and the ones produced by Company A are probably never going to be entirely identical to the ones developed by Company B.

But they can come pretty close. When they come so close that there is  no  practical  difference  in  treatment  efficacy  and  safety  between  the new product and the patented one, the result is called a “biosimilar.”  (Biosimilars  is  the  term  most  widely  used,  but  they  can  also  be  referred to as SEBs — subsequent entry biologics.)

All this is pertinent right now because some of those big patents are expiring. Remicade, one of the first biologics to launch, is also one of the first to face a biosimilar competitor as its patent runs out.

Inflectra, from a Pfizer  company, is a biosimilar for Remicade. It was approved by Health Canada and introduced to the market back in 2015. The Canadian Agency for Drugs and  Technology  in  Health  (CADTH), which evaluates the clinical and cost-effectiveness of medicines in Canada, recommended that Inflectra  be  covered  by  provincial  drug  plans  in  Canada.  Inflectra  is  now covered preferentially by most provincial drug plans.

Biosimilars  will  generally  be  less  expensive  than  the  original  patent  drug, yes, but not nearly by the same margins  as  has  been  seen  with  generic  drugs.  That’s  mainly  because  producing  the  biosimilar  requires  almost  as  much  time  and  cost  of  development as the original. So Inflectra, for example, costs around 47 per cent less than Remicade, which will result in very significant savings to drug plans.

Many more biosimilars for some of the top-selling biologic medicines in Canada are expected to launch in the next five years. This represents a big opportunity to provide cost savings to drug plans — while providing the same health-care benefits to patients.