By Mihir Parikh, M.D.
The ongoing response to COVID-19 has brought into sharp relief the struggles that many Californians were having affording their health care even before the onset of the pandemic.
The challenge is particularly daunting for California families managing a chronic, complex or rare disease, many of whom are among the millions of Americans who are newly unemployed or who have lost their health insurance during the pandemic. As we continue to confront the significant problem of rising health costs, all stakeholders — including California policymakers, health plans and consumers — should ensure that improved access to new and more affordable biosimilar medications are part of the solution.
Biosimilars are lower cost treatments that are nearly identical to already approved biologic drugs. Biologic treatments are derived from living organisms such as bacteria or living cells and are often used to treat chronic and rare diseases, including cancer, arthritis, or heart disease. Biosimilars are like generic versions of approved biologic medicines and have significant potential to reduce California prescription drug costs.
As of this year, the Food and Drug Administration has approved 28 biosimilars, 10 of which were approved in 2019, a record for the agency. According to a recent study from the California-based Pacific Research Institute, Californians could save up to $511 million if biosimilars grew to 75 percent of the market share – a consumer savings rate of 20 to 40 percent compared to original medications.
A similar study by the RAND Corporation unveiled that on average, biosimilars can cost 30 percent less than biologics, with the potential to save the United States up to $71 billion in the next decade. The United States could save $7.2 billion annually if the biosimilars marketplace grew to 75 percent, and even more savings could be realized if more classes of biosimilars are approved.
Despite the potential to change people’s lives and save taxpayers billions in healthcare costs, biosimilars continue to face hurdles to adoption, including misinformation about the efficacy of the drug, delays in extending patent life of their originator biologic drug, lack of rebates given by manufacturers to insurance, and lack of inclusion in insurance lists which are controlled by pharmacy benefit managers.
PBMs are middlemen that control which drugs are covered by health plans. PBMs negotiate with drug manufacturers for discounts on their medications, cost savings that are then supposed to be passed on to consumers. However, PBMs operate largely without transparency and they lack a cost incentive to increase access to cheaper drugs such as biosimilars — the higher the price of the drug, the bigger the rebate for the PBM.
In California, 14 million people live with at least one chronic condition. More than half have multiple. Many of these patients are more susceptible to infection from the novel coronavirus, which makes it even more critical that they are able to access the care they need to manage their conditions.
Ensuring that all Californians have access to the care they need to manage their health conditions during these trying times will require an all-hands-on-deck approach. California’s health plans should help people manage their out-of-pocket costs and prioritize access to cheaper biosimilar medications. Providers should educate patients about the availability and accessibility of new biosimilars. Physicians and patients should decide when to use biosimilars versus biological rather than insurers and PBMs deciding. Finally, California policymakers should take action to ensure that rebates negotiated by PBMs are being passed on to California consumers.
Vulnerable California communities can’t afford the alternative.
Mihir Parikh, M.D., is a past president of the San Diego County Medical Society.
>> Subscribe to Times of San Diego’s free daily email newsletter! Click hereFollow Us: