Biosimilar Drugs Poised To Cut Healthcare Costs
News Canadians are spending nine times more on drugs now than they did three decades ago and as the population ages that number is expected to grow.
So, it is no surprise that the arrival of biosimilars (also known as subsequent entry biologics or SEBs) is being celebrated in many quarters — biosimilar drugs are poised to cut costs on Canada’s drug spending.
Relatively new to Canada, biosimilars are similar to specific biologic drugs already on the market. Unlike generic drugs which are chemicals, biosimilars are made from a cell or living organism. They treat conditions such as rheumatoid arthritis, anemia, low white blood cell counts, inflammatory bowel disease, skin conditions such as psoriasis and some forms of cancer.
Biosimilars can differ slightly in structure from their reference biologic products, but demonstrate no clinically meaningful differences, and provide a safe treatment option for patients.
Biologics have become more expensive in recent years and data shows they constitute 14 percent of drug spending in Canada at a cost of $3 billion per year.
In the realm of biologics, the biosimilar is the new kid on the block.
"Because the reference biologic has already been developed, the corresponding biosimilar doesn’t require the same level of intensive research and development."
Because the reference biologic has already been developed, the corresponding biosimilar doesn’t require the same level of intensive research and development. As a result, biosimilars are priced competitively — in some cases costing more than a third less. It has been estimated that biosimilars have the potential to generate about $740-million in savings per year for Canadian healthcare systems by 2021.
”By providing SEB therapies, we can offer patients better access to high-quality, safe and effective treatment options, and can help alleviate some of Canada’s health-care costs,” said Gerry Stefanatos, Corporate Vice President, Canada and Australia/New Zealand, Hospira. “There is no doubt that these drugs are on the right side of the healthcare equation.”
Biosimilars have been on the market in Europe for almost a decade, and have significantly decreased the cost of treatment there and in other regions, but they have only recently entered the market in Canada and the United States. To date, Health Canada has approved three biosimilars.
“Payers want to see biosimilars added to formularies, which are lists of prescription drugs preferred by various health plans, and are fostering awareness of the benefits of biosimilars among patients and healthcare providers alike,” says Dr. Arthur Karasik, President of the Ontario Rheumatology Association.
The medical community has been receptive
Dr. Karasik says physicians are “cautiously optimistic” right now and he predicts an increasing number of them will be prescribing biosimilars in the not-so-distant future.
“These drugs are the way of the world,” he says. “Cost pressure will ensure that they will be considered for use down the road and innovator companies may need to reduce prices to stay competitive.”
Dr. Ed Keystone, a professor of medicine at the University of Toronto and a rheumatology consultant at Mount Sinai Hospital in Toronto, shares that view. As the number of patients who benefit from biosimilars grows, their use will become widespread, he says.
“Biosimilars are less expensive than other drugs, so in cases where they are available as treatment options, governments and insurance companies will demand they be used,” he says. I’m very excited about it. When I speak to my colleagues about biosimilars, I say ‘They’re here to stay.’