THE BIOLOGIC DRUG MARKET. ebook: The current state of biologic drugs and the challenges ahead

Transcription

1 THE BIOLOGIC DRUG MARKET

2 HOW DO DRUGS AND BIOLOGICS DIFFER? This ebook answers that question, and so much more. OptumRx has summarized the complex and expensive world of biologic drugs for you. It includes links to articles, an infographic, and an on-demand webinar on the future of biologic medications. Our goal is to help you understand the industry and the OptumRx programs designed to help you navigate these challenging times. TABLE OF CONTENTS We welcome the opportunity to continue the discussion and explore how OptumRx can assist you in meeting your goals. Please let us know how we can help.

3 3 THE BIOTECHNOLOGY DRUG REVOLUTION The biologic drug revolution has arrived. While only about 20% of the drugs currently on the market today are biologics, nearly 80 have been approved for use in the U.S. since the year The drug patent cliff in the years since 2012 curtailed profits for drug makers, and sent them searching for more reliable sources of revenue. This has increasingly turned them toward the promise of biologic drugs. One of the great advantages of biologic drugs from the manufacturer s perspective is that biologics are comparatively large, complex molecules, with equally complex production processes. This complexity makes biologics perfect for employing patent law to make it as difficult as possible for potential competitors, with potentially far-reaching economic consequences for those who pay for these treatments. Currently in the U.S., there are over 900 biologically engineered drugs in development. Worldwide sales of biologics are expected to grow to nearly half of the top-100 selling drugs in just the next two years. Drug companies focus on much smaller groups with not much competition, where they can charge higher prices

4 4 FROM BIOLOGICS TO BIOSIMILARS In this article, we describe how serious hurdles may prevent significant cost saving for biosimilars inexpensive versions of branded biologics. Producing generic forms of traditional brand name drugs is relatively straightforward. Once you get down to their constituent ingredients, brand name drugs and their generic versions are chemically identical. But, biologics and biosimilars are derived from living organisms, including cells from humans, animals, or various microorganisms. These living systems are inherently complex and variable, which makes getting an exact compound match of an existing biologic drug virtually impossible. Therefore, the term biosimilar applies rather than generic. Biosimilars are highly similar to their reference product, but they can have allowable differences because they are made using living organisms. What will happen as biologic drugs start to lose their patent protection? Drug makers are increasingly turning to expensive and highly-targeted biologic drugs in their search for market dominance and profits. Given the complex chemistry of biologics, a widespread transition to lowercost biosimilars will take time and is not guaranteed for every biologic drug. Employer projected savings from biosimilars assuming 10,000 commercial members SAVINGS 700, ,000 Scenario 1 $635, , ,000 $ Scenario 2 $521,459 Scenario 3 $217,283 Millliman White Paper: Understanding Biosimilars and Projecting the Cost Savings to Employers _Update, June 29, 2015

5 5 INFOGRAPHIC: BIOLOGICS - BIGGER AND MORE COMPLEX As costs for complex new biologic specialty drugs continue to soar, many hope that biosimilars will provide less-expensive versions of branded biologics in the same way generic drugs do for brand name drugs. But, it s not that simple. Biosimilars may not be as widely available or provide the dramatic price relief as traditional generics have done in the past. This infographic explains why, including: The difference between traditional medications and biologics medications. How conventional drugs are produced, versus the sophisticated production process for biologics and biosimilar drugs The development time and costs required to produce biologic drugs Well-established FDA approval processed for traditional medications, versus unknown FDA requirements for biologics and biosimilars The inherent challenges of reproducing drugs made using living organisms.

6 6 WEBINAR: BIG SAVINGS FOR BIOSIMILARS? As costs for complex new biologic specialty drugs continue to soar, insurers, PBM s and other payers are looking to biosimilars for price relief. Many hope that biosimilars will provide less-expensive versions of branded biologic drugs in the same way generic drugs do for small-molecule chemical drugs. Our experts discuss the current state of biosimilars, what s coming to the market and some of the challenges in store. Key takeaways: Michael Zeglinski, R.Ph., Sr. Vice President, Specialty Pharmacy 1. Specialty medications account for 36% of total medicine spending. Spending on specialty drugs doubled between 2010 and Biosimilars will provide less expensive versions of branded biologic drugs, BUT, the expected savings is 15% (vs. 80% savings with generic medications). 2. The biosimilar market will face many challenges, including complex manufacturing, high development costs, regulatory hurdles, and physician adoption of new therapies. 3. Employing specialty medication strategies helps ensure clinically appropriate use of medications and encourages members to adhere to medications to receive the best therapeutic outcomes. Providing clinical management programs helps couple at-risk patients with specially-trained pharmacists. Farrah Wong, Pharm.D., R.Ph. Sr. Director, Pipeline & Drug Surveillance

7 7 HUMIRA COMPETITOR APPROVED, BUT NOT FOR SALE One of the most highly-anticipated new drugs in recent years took a huge step toward public availability with its recent FDA approval. Amjevita, a biosimilar to Humira, is used to treat conditions like rheumatoid arthritis, psoriatic arthritis, and plaque psoriasis. Humira is one of the biggest-selling drugs in the world. Rheumatoid Arthritis is a monster drug category, accounting for 25% of all specialty drug spending. Humira alone takes up one quarter of those costs. While less than one percent of commercial plan subscribers use biologics, they cost between times more than ordinary drugs. Despite being approved, Amjevita is not yet for sale. It remains mired in complex patent litigation. Years may pass before it comes to market. Humira accounts for 25 percent of all Rheumatoid Arthritis (RA) spend Specialty spend $87B RA drug spend 25% of Specialty spend Humira spend 25% of RA drug spend Market Realist: Humira Takes Top Spot for Rheumatoid Arthritis. July, 2015 UnitedHealth Center for Health Reform & Modernization. Issue Breif. The Growth of Specialty Pharmacy: Current trends and future opportuites. April American Health & Drug Benefits. Trends in Biological Therapies fro Rheumatoid Arthritis, March/April 2012.

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