Drug Plans Decoded: Biosimilars Part 1.

Biosimilars 101: what you need to know.

Four provinces so far have implemented or are implementing mandatory switching policies to boost the utilization of biosimilar drugs. B.C. and Alberta were first in 2019, followed by New Brunswick and, most recently in May of this year, Quebec. Ontario is widely expected to be next.

Why are provincial drug plans taking these steps? What are the implications for private drug plans?

We’ll be answering these questions and more in a series of articles. We begin with a simple explanation of the unique nature of biologics, how that affects uptake of biosimilars, and an overview of the cost differences between originator or reference biologics and biosimilars.

The facts on biosimilars.

We recommend Health Canada as your go-to source for objective information. To quote from its fact sheet published in 2019:

“A biosimilar is a biologic drug that is highly similar to a biologic drug that was already authorized for sale.

“Health Canada authorizes biosimilars for sale using the same rigorous regulatory standards for quality, efficacy and safety as for all other biologic drugs.”

A little further on it states: “There are no expected clinically meaningful differences in efficacy and safety between a biosimilar and the biologic drug that was already authorized for sale.”

Put another way, biosimilar drugs come to market after the patent expires for an original biologic drug, which Health Canada calls the reference biologic. Health Canada’s authorization signifies that a biosimilar biologic is as safe and effective as the reference biologic.

That all sounds pretty straightforward, and a lot like what happens when a brand-name, traditional drug comes off patent and generic drugs enter the market.

And yet it’s not the same at all.

The key words are “highly similar.” Biosimilars are highly similar but can never be exactly the same as the reference biologic. That’s because biologic drugs are made with living cells. As a result, both reference and biosimilar biologics are “naturally variable,” as Health Canada puts it. Indeed, batches of a reference biologic all differ slightly from each other, as do batches of a biosimilar biologic.

Yet, manufacturers are able to harness these living cells to produce drugs that are consistently safe and effective—and in many cases, life-changing—for patients. It can be likened to the use of slightly different routes to arrive at the same destination.

By comparison, traditional drugs are made with chemicals, which means that the active ingredients in brand-name and generic versions can (and must) be identical.

Interchangeability versus switching.

Health Canada’s approval of a traditional generic includes a declaration of equivalence to the brand-name original drug. This means that provinces can designate these drugs as immediately interchangeable. That is, a pharmacist can go ahead and dispense a lower-cost generic rather than the prescribed brand-name drug, without having to involve the original prescriber.

As detailed in Health Canada’s fact sheet, interchangeability can’t happen with a biosimilar because Health Canada’s authorization is “not a declaration of equivalence.” Instead, the regulatory body clarifies that “the authority to declare two products interchangeable rests with each province and territory according to its own rules and regulations.”

We have yet to see a province or territory state that a reference biologic and its biosimilars are interchangeable. That is not likely to happen any time soon, if at all, given the unique qualities of these drugs. As a result, the patient’s prescriber must be involved when it comes to starting a biosimilar biologic.

For new patients, physicians can simply prescribe a biosimilar from the start. Patients already taking a reference biologic, however, must consciously switch to a biosimilar. Very few are proactively or voluntarily choosing to do so, and as a result public and private plans are likely not seeing the full savings from lower-cost biosimilars (perhaps even after taking into account possible price discounts for reference biologics).

Which brings us to the switching policies mentioned at the start of this article. Health Canada describes switching as “a change from routine use of one specific product to routine use of another specific product.” It also states: “No differences are expected in efficacy and safety following a change in routine use between a biosimilar and its reference biologic drug in an authorized indication.”

Safety of switching.

Research from Europe, which is years ahead of North America in the use of biosimilars, supports the safety of switching from a reference biologic to a biosimilar. In its information guide for healthcare professionals, last updated in February 2019, the European Medicines Agency states:

“Over the last 10 years, the EU monitoring system for safety concerns has not identified any relevant difference in the nature, severity or frequency of adverse effects between biosimilars and their reference medicines.”

A 2020 systemic review of 178 studies conducted from 2007 to 2018 concluded “there are no robust data that indicate that switching from a reference biological to a biosimilar is related to any major efficacy, safety, or immunogenicity issues.” In Canada, a good summary of international research findings can be found at BioSim-Exchange, a website produced by Arthritis Consumer Experts and JointHealth.

Backed by these statements and the clinical evidence, public payers in Canada have taken the initiative and put switching policies in place that require patients taking a reference biologic to switch to a biosimilar in order to continue to receive public funding.

We will dive into what’s happening in the provinces, and the implications for private payers, in a future article in this series.

Cost differences.

On average, the list price for a biosimilar biologic is a little more than half the list price of its originator.

The pan-Canadian Pharmaceutical Alliance (pCPA) negotiates prices on behalf of public drug plans (provincial, territorial and federal). It does so indirectly for private plans as well: as stated in pCPA’s “First Principles” document, the introduction of a biosimilar in Canada “must provide a reduction in the drug’s transparent price to benefit all Canadians.”

Table 1 summarizes the average list price for a select group of biosimilars, expressed as a percentage of the average list price for the reference biologic. These biologics are included in provincial switching programs. The differences in costs could translate into thousands of dollars in savings per patient per year. For example, the annual treatment cost for Humira, the reference biologic for adalimumab, ranges from $18,000 to $22,000 depending on the indication and the patient. Its biosimilars, which became available in Canada this year, cost between $10,800 and $13,200 annually (60% of the cost of the reference biologic). Currently, Humira ranks second on the top 10 drugs by eligible cost covered by private drug plans, after Remicade, according to TELUS Health claims data.

The next article in this series considers the uptake of biosimilars in Canada compared to other countries.

Table 1 – Average pricing of biosimilars for six molecules.

*A biosimilar may not be approved for all of the reference biologics’ indications

**Average list price for all biosimilars

Source: TELUS Health