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Health View: Minnesota can see savings, increased health access with 'biosimilars'

Millions of patients suffering from painful and chronic medical conditions could find it easier to access effective and more affordable treatment options if federal health officials take steps to grow a nascent prescription drug sector known as biosimilars.

For Minnesota, where health care services are among the most expensive in the country, a robust biosimilars marketplace could have enormous benefits for residents in need of care while reining in ever-increasing health care spending.

Stacie PhanMost Minnesota residents may be unfamiliar with "biosimilars." They are commonly used abroad to treat conditions ranging from cancer to autoimmune disorders. Many Minnesotans, however, are likely familiar with drugs such as Humira or Enbrel, which are examples of "biologics." They are branded, highly specialized drugs made in living cells rather than through chemical synthesis like most drugs.

While biologics are a revolutionary medical breakthrough, the time and investment associated with their development — up to 15 years and more than $1.2 billion in some cases — coupled with the lack of competition in the marketplace has led to high prices for patients. This can strain both patient budgets and the national health care system. While only 2 percent of the population uses biologic drugs, they account for 40 percent of prescription-drug spending in the U.S.

A biosimilar, on the other hand, is essentially what its name implies, a highly similar version of a biologic designed to match safety, quality, and efficacy. The U.S. Food and Drug Administration will only approve a biosimilar if there are no meaningful clinical differences from its biologic reference drug. As a result, patients and physicians can expect the same clinical results when using a biosimilar or the biologic reference drug.

Biosimilars can be far less expensive, because biosimilar producers can rely on clinical trials from the reference product to establish safety and efficacy. In fact, biosimilars are expected to cost up to 35 percent less than their reference drugs; and the Rand Corp. has predicted that by 2024, biosimilars will reduce direct spending on biologics in the U.S. by more than $54 billion.

For Minnesota, the emergence of biosimilars could help drive down the state's ever-increasing health care spending. Minnesota has one of the highest rates of health care spending per capita: more than $8,871 for every resident. Fortunately, there is good news coming from Washington that eventually could have a real impact in Minnesota and across the country.

In recent months, the FDA has approved four new biosimilars, bringing the total number of approvals to nine, with three currently available to patients. The FDA in October also launched a campaign to improve awareness about biosimilars among medical professionals, an approach that has helped increase access across Europe, where there already are 20 biosimilars on the market.

And a recent decision by the Centers for Medicare and Medicaid Services to assign each biosimilar a unique billing code will lead to greater opportunity for increased competition, greater cost savings, and more choices for patients. The nonprofit Biosimilars Forum estimates that the new rule will reduce Medicare costs by $65 billion over 10 years, a critical development for Minnesota, which has one of the highest average annual growth rates of Medicare spending per enrollee.

These are critical steps toward building wider acceptance of biosimilars in the U.S., but there is more work to be done. For states like Minnesota that are struggling to keep up with health care costs, increased access to safe, effective, and more affordable pharmaceutical options are essential for the future health of both patients and the state's economy.

Stacie Phan of Beaufort, S.C., is president of the Biosimilars Forum and director of state government affairs and public policy for the pharmaceutical company Boehringer Ingelheim (boehringer-ingelheim.com). She wrote this for the News Tribune.

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