White Paper Investigates Biosimilar Competition and Price Reduction

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In March 2021, researchers from Harvard Medical School, Harvard University, and Brigham and Women’s Hospital published a white paper exploring the link between entry of biosimilars under The Biological Price Competition and Innovation Act (BPCIA) and moderation in drug prices driven by market competition.  The white paper studied the price and volume of sales of 7 biologic drugs, namely NEUPOGEN (filgrastim), REMICADE (infliximab), EPOGEN (epoetin alfa), NEULASTA (pegfilgrastim), AVASTIN (bevacizumab), HERCEPTIN (trastuzumab), and RITUXAN (rituximab), pre- and post-biosimilar entry to determine “how average molecule (or market) prices and originator prices move in response to biosimilar competition.”

“There was great anticipation that the BPCIA would lead to a moderation in drug prices driven by market competition [but t]he observed levels of competition and the accompanying savings have not reached those expected levels,” write the authors.  The authors cite several reasons for the limited competitive impact of biosimilars, including the “slow regulatory responses by the U.S. Food and Drug Administration (FDA) and the Centers for Medicare and Medicaid Services (CMS), regulatory manipulations by the industry that create barriers to entry, contracting practices between PBMs and manufacturers, physician concerns about the degree of similarity, and uncertainty created by patent litigation.”  According to the authors, “[s]ome of these sources of market frictions point to policy measures that may facilitate more robust competition.”

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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