Biosimilars will be a critical element of the future of healthcare in the United States. Already in Europe, biosimilars have been widely adopted, allowing the European Union to save substantial amounts of money on healthcare.
In this special centennial episode, Richard Williams, R.Ph., Senior Vice President of Pharmaceutical Innovation and Insights at CSI Specialty Group, joins host Andrew Maddigan, Vice President, Client Engagement, to share new insights on the topic of pharmaceutical biosimilars, including:
- How biosimilars will impact the American healthcare system
- How patients can benefit from biosimilar advancements
- Policy and legislative challenges and forecast
- A pipeline representing a potential $54 billion in savings
Tune in to Discover:
- What led to the current state of affairs
- Where pharmacy is headed approaching 2025 and beyond
- Legislative activities around biosimilar policy
- International perspectives
About Richard Williams, R.Ph.
Richard Williams is a second-generation pharmacist who has spent three decades in the pharmaceutical industry. Throughout his pharma career, he has sold, promoted and contracted for more than 40 products, including more than a dozen blockbuster drugs and many specialty molecules. His background includes experience in neuroscience, endocrine, including diabetes, oncology, and cardiovascular diseases.
In his role as Senior Vice President of Pharmaceutical Innovation and Insights, Richard provides executive leadership and strategic direction to CSI and their partners with an emphasis on business development and growth.
Prior to joining CSI, Richard practiced retail and hospital pharmacy before joining Eli Lilly & Company. During his time at Lilly, he worked with physicians, integrated delivery systems, academic medical centers, long-term care providers, specialty pharmacies, regional and national health plans, and PBMs.
Richard earned his bachelor’s degree in pharmacy from the University of Mississippi in Oxford, MS. He has served on several boards, including Christian Leadership Concepts and Hope Smiles. He regularly volunteers with The Bridge, a Nashville based non-profit that helps the homeless, where he is currently working on intersecting street medicine with population health.
About Andrew Maddigan
During the past 30 years, Andrew Maddigan has directed business strategy and marketing functions in a variety of venues, including health care, education, aerospace, and energy. His previous roles have included VP of marketing for the nation’s largest not-for-profit hospice agency, VP of sales and marketing for a national specialty and long-term care pharmacy, and communications director at a large urban school district.
Andrew also led marketing and strategic communications efforts for an international health care accreditation agency, serving as the organization’s liaison to the United Nations Development Program. Andrew earned his BS in Broadcast Journalism from the S.I. Newhouse School of Public Communications at Syracuse University. He earned an MS in Educational Administration from Canisius College and an MBA from St. Bonaventure University. Andrew currently serves as VP of client engagement at CSI Specialty Group.
Speaker 1: Welcome to the Specialty Pharmacy Podcast, your prescription for specialty pharmacy success.
Andy Madigan: Hello and welcome to the CSI Specialty Pharmacy Podcast. I’m Andy Madigan, CSI Vice President of Client Engagement, and your host for this episode. Today, it’s our pleasure once again, the visit with Richard Williams, CSI Senior Vice President of Pharmaceutical Innovation and Insights. Richard is a second generation pharmacist who spent the last three decades in the pharmaceutical industry. Welcome back, Richard.
Richard W.: Thank you, Andy. I’m glad to be here.
Andy Madigan: Today we’ll be covering the topic of Biosimilars. Richard, I know that you recently gave a presentation on the topic at an industry event in Philadelphia. Can you share with us a little bit about that presentation, some of the highlights?
Richard W.: Well, Andy, thanks for having me back on your podcast. Biosimilars are going to be a very important part of the future of healthcare. In Europe, they’ve been adopted and are used quite often and it has allowed the European Union countries to save a lot of money on healthcare. We actually need biosimilars to be successful here in the US similar to generics. And if you think about back in 1984 I believe when the Hatch-Waxman Legislation took place, there was a slow adoption in generics. There was conflicts between brand manufacturers and generic companies. There was misinformation. We’re at that same point in time where biosimilars today. And so let’s share a little bit more information about them with your listeners.
Andy Madigan: Great. Where do biosimilars fit in the healthcare system?
Richard W.: Well, if you think of small molecules, I’ve seen some people will refer to small oral products similar to a bicycle. And then we moved to products like insulin, which were biologics. And insulin would be considered an automobile. More complex, more moving parts, more expensive to make and manufacture. And then you move to products similar to human growth hormone, which were even more sophisticated than that. And some people would refer to those like an airplane. And then finally, now we’re into these very large biologics that do a lot of really good work to cure diseases such as psoriasis and Crohn’s disease. And now they’re exploring a lot of other illnesses that are very debilitating. And people refer to these molecules similar to the space station of how complicated it is.
Andy Madigan: Sure.
Richard W.: And so there has been this evolution with small molecules. We have Hatch-Waxman Legislation that other companies can come in after a patent expires and reproduce the product. Basically, it’s baking a cake. Keep in mind biosimilars, these are living organisms that are much more complicated to manufacture, much more expensive to manufacture. We won’t see the same price reductions we’ve seen with generics, but we may see upwards of 15%, 20%, 25% even 30% discounts over the existing brand name products that are on the market today. And so there is quite a large savings because those products are very expensive.
Andy Madigan: Right. So how many approved biosimilars are there?
Richard W.: Well, as we record this in late December, there’s 25 biosimilars that have been approved by the FDA. But what you have to understand is that there are 10 that are being commercially available in the United States. There are five to six biosimilars that have been approved that will not become available until 2023 because of existing patents and lawsuits and some of the other legal matters that exist in today’s marketplace. But going forward, Andy, what your audience needs to understand is there’s more than 500 biosimilars in the pipeline. And so biosimilars are going to be readily available. They’re going to help create some reduction in the healthcare system, which in turn we need to allow us to pay for the innovation that’s being developed going forward.
Andy Madigan: Right. So with that many biosimilars in the pipeline, and so it seems to be only a matter of time, what do you predict are some of the impacts it’s going to have in the US market? It’s going to bring down drug costs? Healthcare spend? Is it going to be resisted by certain fractions? What are consumers going to see? What are patients going to see?
Richard W.: Andy, it’s been estimated that the adoption of biosimilars in the US could save the US healthcare system more than $54 billion between 2017 and 2026. We’ve seen some of those initial savings here in 2019. I think 2020 is really going to be the year of biosimilars, where the information is going to be better, the communication of that information to providers and to patients is going to be better. I just saw a video by Dr. Jeff Patton who is with one of the large national oncology groups. And he talked about the adoption of biosimilars and their physician practice in the oncology space. And that they are totally on board because it not only does it save healthcare money, it saves patients money and out of pocket costs. And so they are fully on board adopting. And I think we’ll see other physicians and physician groups adopt that philosophy moving forward.
Andy Madigan: So what do you see as some of the challenges to bringing those to the marketplace? You mentioned some legal hurdles perhaps as it relates to patent and other. Do you see other interests perhaps having a problem with this?
Richard W.: Well, yeah Andy, there are probably three big buckets of areas of that people are trying to work through and understand and clarify. The first is the regulatory policies and guidance. The FDA navigating through the FDA is complex and it’s confusing. There’s been a lot of discussion about how do we label, what do we call these products? I think most of that has been resolved. And when you look at the American Patients First Blueprint, there’s tremendous interest in making the biosimilars available to patients, but there’s also a confusion among patients, and there’s confusion among providers with regard to how they’re adopting, which is really the second point is the lack of patient and provider adoption.
Richard W.: How do you truly integrate biosimilars into clinical practice? How do you avoid the misleading information on safety and efficacy? And this concept of interchangeability, which may be the single biggest hurdle and barrier. Interchangeability will allow a pharmacist to actually substitute a biosimilar for a brand name product. They will have the legal authority to do that. That’s going to be decided at the state level by state legislation. Almost every state has adopted some type of policy with regard to that. But it’s going to be more complicated than simply converting a brand prescription to a generic prescription. So there’s still a lot of work to be done with that. And then finally, the third point of where the challenge is going to be is the misaligned incentive. It’s the reimbursement models, it’s payer fail first strategies that are required based on rebates from the brand manufacturers. And then everybody’s focused on short term bottom line. Everybody’s managing quarter to quarter. And adoption of biosimilars is going to have to be a long term play.
Andy Madigan: Right. Can you go back and just explain for our listeners what you mean by fail first strategies?
Richard W.: Yeah, within the industry it’s pretty common that there will be guidelines and or pathways, algorithms, et cetera that will require a patient to take a specific product, usually a less expensive but efficacious product, equally efficacious product and the managed care organizations want those individuals to try those products first before they move on to maybe a more expensive product, or product that is more toxic or has higher side effects. So it basically is a stepwise approach to therapy that physicians do this all the time.
Richard W.: But this concept of fail first really, I believe it originated with the managed care organizations and payers. Today, based on contracting and rebates that are paid, a lot of times the brand product may actually be less costly to a payer because of rebates, then the biosimilar will. And so the payers are going to require them to use the brand before they go to a biosimilar. Well, that’s good for the payer. It’s good for the manufacturer. May not be as good for the patient downstream. And certainly from a system standpoint, it’s probably not the optimal way to go about this when you think long term of how do we reduce the total healthcare costs within the United States?
Andy Madigan: Right. So one more time. What was that number that you quoted that it’s predicted biosimilars may be able to have a beneficial impact on the healthcare span? What was it like 51 billion?
Richard W.: $54 billion.
Andy Madigan: $54 billion. And that won’t happen overnight certainly, but what would you predict? Yeah, how long, given all the challenges and the fluid nature of regulatory, and payers and contracts, patents and that sort of thing, all the different moving parts, how long would you figure before we were really seeing close to maximum realization of that? Is that something that you predict it’s going to occur over five years, 10 years that we’ll be able to look back and say, “10 years ago we were spending way more and having outcomes that were far less meaningful than we are today.” Should we be hopeful for a five year window or a 10 year window or what would you think?
Richard W.: Well, I think that the data that came from RAND Corporation was $54 billion over a 10 year period that actually started in 2017. And as I mentioned, there’s 10 approved biosimilars. And those are providing cost savings. The very first one now has about a 50% share of market. So we’re seeing uptake. We’re seeing adoption of that. The $54 billion though when the big number’s going to happen in 2023, when two of the biggest drugs in the world will have some competition going forward. And the that will happen. They’re approved today, but they’re not available in the US market and will not be until 2023. That’s the year that we will see a really significant impact with regard to biosimilars of big financial impact in the US.
Andy Madigan: A big chunk of it within the five year window. So that’s certainly encouraging. Richard, I’ve seen a number of articles recently in The Wall Street Journal about biosimilars. Why is there so much confusion?
Richard W.: Andy, that’s a great question. And I’ve actually read, I think there’s five or six articles that have taken place in this past summer, starting in July with the FDA and veils efforts to give biosimilar drugs on the market faster. Clearly, we see a strong impetus from the administration with President Trump and the department of HHS. And the FDA to accelerate the adoption and approval of biosimilars. The second article that you may be referencing that you may have seen was How Big Pharma Suppresses ‘Biosimilars’. Certainly, I am a huge fan of innovation of the biopharmaceutical industry. They have done amazing work, and they want to protect their interest. And that makes perfect sense because they need to do it in the right way. And there have been games that have been played. And so there’s a lot of focus on that of how do you prevent that from happening.
Richard W.: And because we have not adopted a biosimilars here in the US as quickly as they have in Europe, there was an article talking about, Is It Time to Throw In the Towel on Biosimilars. And I would submit to you and your audience, absolutely not, because again, we need to create this market so that we can pay for the future innovation that’s coming. That is really exciting and patients really have high hopes for the cures and treatments that are going to be coming to the market in the next five to 10 years.
Richard W.: So there was an article, Don’t Give Up on Biosimilars—Congress Can Give Them a Boost. Let me assure your audience that one of the things that there is total alignment in Washington about, and that is approving biosimilars, and taking advantage of these new products when they come to market, whether you’re Democrat or Republican, whether you’re a Senator or Representative, whether you’re in the Executive Offices of the White House, every single person is aligned to, how do we accelerate and adopt biosimilars quicker in the United States. There’s questions about policy there. And so the one thing that those headlines all reinforces complete alignment from Washington to make sure that this is a successful marketplace.
Andy Madigan: Well, consensus is pretty rare there right now. So another reason to be encouraged by the biosimilar activities. So that is about all the time that we have today. And with that, I want to say thank you Richard for sharing your insights with us. Once again, we look forward to having you join us at some point in the future. Thank you for listening to the CSI Specialty Pharmacy Podcast. If you enjoyed listening today, I encourage you to subscribe to the podcast on your podcast delivery platform of choice.
Andy Madigan: I also encourage you to visit our website, csigroup.net. And you can download your free copy of the 2019 State of Specialty Pharmacy Report. Very soon, you’ll be able to download the 2020 State of Specialty Pharmacy Report. Again, that’s csigroup.net/survey. You can also keep up with us on social media by following CSI Specialty Group on LinkedIn, Twitter, and Facebook. CSI Specialty Group is a subsidiary of group purchasing organization, Intalere. CSI expands Intalere’s suite of solutions to healthcare providers, health systems, pharmacies, and pharmaceutical partners. Intalere is owned by Intermountain Healthcare, a leading healthcare system based in Salt Lake City, Utah. CSI supports our parent organization’s vision of providing tailored smart solutions to help deliver a superior services at an affordable cost. You’ve been listening to the CSI Specialty Pharmacy Podcast. Until next time, good day.
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