Drug plans decoded: Biosimilars Part 2

September 28, 2021

Guillaume Marois

How Canada compares on biosimilars.

Canada lags many countries when it comes to the uptake of biosimilar biologics, as determined by availability, prescribing patterns and policies for coverage (or the lack thereof). This article, the second in our series about biosimilars, compares Canada to Europe and the U.S.

In our first article, we described the nature of biologics, explained the concept and safety of switching and summarized the cost differences between reference biologics and their biosimilars.

In 2004, the European Union (EU) became the first jurisdiction in the world to develop a regulatory pathway for biosimilars. The European Commission first approved a biosimilar in 2006, for a biologic (somatropin) that treated rare conditions. It has since approved more than 77 biosimilars for 17 reference biologics, according to an overview by the Generics and Biosimilar Initiative in February 2021.

In the years that followed, only a few biosimilars in Europe came under review and were launched. It was not until 2013 that manufacturers began submitting and marketing biosimilars in earnest, for relatively more common conditions such as rheumatoid arthritis. As of June 2020, biosimilars represented nine percent of the biologics market in Europe, with a five-year compound annual growth rate of 58%, according to IQVIA. They are available in therapeutic areas that represent 65% of the biologics market, predominantly for cancer and autoimmune disorders.

In Canada, Health Canada approved its first biosimilar in 2009, also for somatropin. It approved its second biosimilar in early 2014: Inflectra, for rheumatoid arthritis and other autoimmune conditions.

An analysis by Smart & Biggar, a Canadian intellectual property legal firm, reveals that Canada has picked up the pace. As of August 2020, Health Canada had approved 11 biosimilars for five reference biologics. Less than a year later, by April 2021, that number had climbed to 36 biosimilars for 14 reference biologics, of which just two have yet to be marketed. However, that is still well behind Europe (Table 1).

Canada’s current drug pipeline includes 11 submissions for biosimilars, all of which are for reference biologics that already have biosimilar options. If Health Canada approves them all, the total national tally would change to 47 biosimilars for 14 reference biologics.

The U.S. is a bit behind Canada. Like Europe, the U.S. Food and Drug Administration (FDA) approved its first biosimilar, for somatropin, in 2006. It approved its second biosimilar in 2015 (filgrastim for people undergoing chemotherapy). It did not approve its first autoimmune biosimilar (Inflectra) until 2016, more than two years after Canada. In its October 2020 report, IQVIA reported 33 approved biosimilars for 13 reference biologics in the U.S.

For a comprehensive overview of the history and uptake to date of biosimilars in Canada, the U.S. and Europe, download this poster by the Patented Medicine Prices Review Board in Canada, produced in 2019.

Policies for coverage.

For private drug plans in Canada, it’s important to note that claims activity mainly revolves around 10 biosimilars for three reference biologics (all for autoimmune diseases such as rheumatoid arthritis). This year alone has seen the launch of five biosimilars for adalimumab, for which Humira is the reference biologic. These biosimilars for Humira join three biosimilars for infliximab (reference biologic of Remicade). For years, Remicade and Humira have been the top two drugs by eligible cost for private drug plans, according to TELUS Health claims data. Their biosimilar options or price negotiations on the reference biologic therefore represent significant savings, depending on the actions taken by plan sponsors and their insurance carriers.

Once a biosimilar enters the market in a European country, a universal, preferential reimbursement policy typically kicks in. These universal programs, where governments are the single payer or coordinate seamlessly with private payers, have resulted in relatively straightforward pricing agreements and biosimilar support policies. As a result, prescribers in Europe are much more likely to start new patients on a biosimilar and to switch patients already taking the reference biologic.

Canada’s decentralized system for the reimbursement of pharmaceuticals has prevented the development of a national, government-led strategy for access to and coverage of reference and biosimilar biologics. Instead, public and private payers engage directly with manufacturers, resulting in a range of approaches to coverage, including product listing agreements, preferential listings and exceptional access programs. Manufacturers’ patient support programs have also come to play a much bigger role in terms of financial assistance than they do in Europe.

The pan-Canadian Pharmaceutical Alliance (pCPA) introduced pricing equity for biosimilars in 2014, when it began negotiating their list prices on behalf of public drug plans (provincial, territorial and federal). This pricing must apply to private plans as well: as stated in pCPA’s “First Principles” document, the biosimilar “must provide a reduction in the drug’s transparent price to benefit all Canadians.”

In 2019, British Columbia and Alberta became the first two public payers to move the dial on the uptake of biosimilars through the implementation of mandatory switching policies in 2019, followed by, at publication date, New Brunswick and Quebec in 2021.

B.C. switching program had a direct impact on private plans, given the province’s universal PharmaCare program. Patients who did not want to switch would have turned to their private plan for coverage, if one was available. Some private insurers, such as Green Shield Canada and Equitable Life, publicly announced their alignment with B.C.’s policy. Others, like Sun Life Financial, announced that it will pick up coverage for its plan members in B.C. who choose not to switch, citing its pricing agreements for the reference biologics as the reason it is able to do so.

Switching policies in Alberta and other non-pharmacare provinces may also directly impact private plans through coordination of benefits, again opening the door to switching or other biosimilar policies in the private sector.

As well, private plans may experience the “halo effect”—that is, as prescribers become more accustomed to prescribing biosimilars for patients with public plans, they will be more likely to do the same for patients with private plans. TELUS Health data is already showing evidence of this in B.C. and Alberta, and possibly the rest of Canada.

Our next article will take a closer look at provincial biosimilar policies and their impact so far, for both public and private plans.