New biosimilar launches are capturing large shares of the originator market

Erin McCallister Senior Manager, Health Research Institute, PwC US October 15, 2020

Biosimilars are starting to gain an appreciable share of the market from originator products, according to two recent reports on the trend (here from IQVIA and here from the Drug Channels Institute). But despite glimmerings of market traction for some products, no clear pattern has yet emerged as to what could enable these less expensive alternatives to secure a long-term, sustainable foothold.

Biosimilars have already been associated with $37 billion in savings since the Biologics Price Competition and Innovation Act (BPCIA) was passed in 2010, according to the IQVIA analysis. Akin to generic medicines but developed as similar products to brand biologics, biosimilars have captured 20% of the accessible market share from the originator molecules, but a closer look finds that the success varies by the brand biologics. For example, three biosimilar classes launched in 2019 to treat cancer are projected to garner nearly 60% of the market within their first two years. But biosimilar insulins and other products have had limited market uptake, partly because of the launch of an authorized generic by the originator company and price reductions offered on the originator product.

The first two biosimilars to market could also garner more share, IQVIA found, with third or later entrants often unable to achieve higher volumes. Still, the report found that the entrance of two or more biosimilars could help drive down prices, suggesting that there may be a balance between the number of biosimilars per originator molecule, the overall sustainability of the biosimilars market and their ability to lower drug costs.

IQVIA found that, on average, biosimilars are saving patients and payers about 30%. For example, biosimilar insulins are estimated to save Medicare and commercial patients about $17 per prescription, while the recent oncology launches have resulted in average sales price reductions of $500 to $1,900 for a standard treatment course.

IQVIA estimated that overall, with seven new molecules facing biosimilar competition in the next five years, biosimilars could result in over $100 billion in savings, but it will depend on molecule-specific factors such as how aggressively originator companies compete to preserve their market share and how biosimilar companies respond.

The Drug Channels Institute found a similar trend among provider-administered biosimilars. Six of the seven classes achieved more than 20% market share; at least one class of biosimilar gained nearly 70% of the market share from the originator product since 2016. The biosimilars have 20% to 50% lower average sales prices than the originator products. The Drug Channels Institute analysis didn’t include self-administered therapies such as insulins.

HRI impact analysis

The findings from the reports could mean that physicians are becoming more comfortable with prescribing these drugs or that the price differential compared with the originator product may be dropping low enough to change prescribing behaviors compared with a few years ago, or both.

In a 2018 survey of physicians, HRI found that 65% said they would be willing to prescribe biosimilars if they were cheaper. Just over 40% said they would be motivated if they had higher confidence in the safety or efficacy of the biosimilar being equivalent to or better than the biologic counterpart.

IQVIA’s analysis of the fastest-growing biosimilar, launched in 2019, shows little consistency among providers’ prescribing preferences. There was also little difference in uptake patterns for pharmacy-dispensed and physician-administered products. However, IQVIA’s analysis of payer channels for the pharmacy drugs shows that both had reached 68% uptake in managed Medicaid by the end of 2019, while some struggled to gain formulary access to Part D and commercial markets.

There has also been increased scrutiny of originator companies, with the FDA and the Federal Trade Commission saying in February that they would work together to crack down on “anti-competitive” business practices that may be obstructing the biosimilars market.

The FDA has also tried to smooth the path for biosimilars developers of insulin and other products with new definitions for biologics. The biosimilars pathway was created to reduce the cost burden associated with biologics once the exclusivity period for the innovator biologic ends. HRI’s Medical Cost Trend: Behind the Numbers 2020 report identified prescription drugs, particularly biologics, as a medical cost inflator.

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Trine K. Tsouderos

HRI Regulatory Center Leader, PwC US

Tel: +1 (312) 241 3824

Ingrid Stiver

Senior Manager, Health Research Institute, PwC US

Erin McCallister

Senior Manager, Health Research Institute, PwC US

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