Specialty medications used to treat cancer, hepatitis, and other complicated diseases are among the greatest drivers of healthcare costs in the US. And while these medications represent a very small percentage of the total number of prescriptions written, they account for more than half of all dollars spent. By now, this is a well known fact.
But here is a lesser-known part of the story: Within the category of specialty medications, there is a class of drugs, called biologics, that are among the most expensive of all. Sadly, some of the companies that manufacture them are resorting to abhorrent practices to keep it that way.
Biologics aren’t manufactured from the chemical recipes and processes that are used to produce traditional medications. Instead, they are derived by cultivating enormous quantities of living cells that are manipulated using mind-bogglingly complicated processes.
The results have been extraordinary. Biologics have led to breakthroughs in the treatment of rheumatoid arthritis, Crohn’s disease, multiple sclerosis, and many cancers, to name a few.
So, at some level, a higher cost is justified and to be expected.
Enter biosimilars. These are drugs that are manufactured using somewhat different processes than the biologics but have been deemed by the FDA to be highly similar to biologics (hence the name) and every bit as effective. Think of them almost as generic versions of biologics.
Biosimilars have been available in Europe for years, and have been proven to be effective, safe and, in some cases, half the price. In an effort to rein in out of control drug spending, policymakers in the US gave them a pathway for expedited FDA approval and recently updated the framework on naming conventions to eliminate barriers in the perception of patients and providers regarding their interchangeability with original biologics. Now biosimilars are becoming widely available here, as well.
Understandably, healthcare payers are encouraging prescribers and patients to use biosimilars over their biologic counterpart.
To stave off the competitive threat, some of the original biologic manufacturers have launched a cynical PR campaign to frighten patients into thinking these drugs don’t work as well and may even be dangerous. They hide behind third-party groups who use outrageous scare tactics, such as comparing the dangers of biosimilars to Thalidomide, the drug that tragically caused congenital disabilities in babies decades ago. In some cases there are pay to play games happening between biologic makers and PBMs trying to use rebates to block biologic entry.
Here’s what we think: Original biologic drug makers should cut it out. The advent of traditional generic drugs has been good for consumers, good for innovation, and good for the industry. Biosimilars have the potential to do the same.
At Abarca, we believe that for us to achieve a better, more affordable healthcare system, abusive and anti-competitive behavior must stop. We have been quick to call out our own industry— the pharmacy benefit managers— who have done enough to confuse and distort markets. This time, some of the drug makers may have just gone too far.
This blog was written by Javier Gonzalez, Pharm.D, Chief Operating Officer at Abarca.