Biosimilars vs. Biologics - What's The Difference?

PBIRx®

Intelligent Solutions in Pharmacy Benefits

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Though plan sponsors may be responsible for providing one or more types of benefits to employees or members, one of the most commonly misunderstood is the pharmacy benefit. Why? With so many categories of drugs out there, each with their own requirements and guidelines, there is a vast amount of information that must be processed to be fully aware of how and where costs are being distributed.

To breakdown drug categories a bit further and focus on a new class of high cost specialty drugs, we would like to focus on biologics and biosimilars, beginning with the BPCIA:

The Biologics Price Competition and Innovation Act (BPCIA) is a piece of the Affordable Care Act that states that a biological product can be considered a biosimilar if data suggests that it is already extremely similar to a previously approved originator biologic specialty drug. Essentially, it encourages the development of a biosimilar once the originator specialty biologic's (the drug that was originally approved) exclusivity ends (typically after 12 years). In current news, Presidential candidates are proposing to reduce the 12 year exclusivity to 7 years.

But what exactly is a biologic or a biosimilar? By definition, biologics are drugs that are derived from natural sources, such as humans, animals or microorganisms. They are designed to treat diseases and other medical conditions, but can be used to prevent disease dependent upon circumstances. When you think of biologics, think along the lines of vaccines, gene therapies and cellular therapies.

On the other hand, biosimilars are a type of biologic that are approved by the FDA because they are similar in nature to other already FDA approved biological products often referred to as the originator drug. However, it is important to note that some biosimilars may not be interchangeable with the originator drug depending on the type of FDA approval.

Where cost is concerned for biosimilars vs. biologics, biosimilars have been predicted to reduce drug spending by the billions over 10 years. Some of the most current biosimilars that have already launched and others that are expected to hit the market this year are:

• Zarxio (for Neupogen)
• Infliximab (for Remicade)
• Epoetin Alfa (for Epogen)

Tying it all back to plan sponsors, they must be prepared to take advantage of cost savings by changing their plan designs to encourage Specialty Drug biosimilar utilization. Since some are infusible drugs, they need to either carve the originator drug from the medical to the pharmacy benefit for prior authorization and opportunity for biosimilar dispensing OR, put a trigger in place for medical approval to prefer the lower cost biosimilar.

For more information about biosimilars and biologics and how they affect a pharmacy benefit plan, connect with PBIRx today! We can analyze your plan to determine if it is designed in the most cost effective way and educate you further on the difference between each of the current drug categories. To speak with one of our consulting and auditing experts, please give us a call at (888) 797-2479 or email info@pbirx.com today.