Presidential hopefuls and current elected officials alike have recently revealed various plans to address the issue of increasing drug prices. Some favor greater government involvement; others promote patent reform; others favor changes to the Affordable Care Act. There are certainly a great number of theoretical ways to effectively reduce drug prices, but, time and time again, we have seen one consistent practice drive down prices across the board: competition, from both innovator drugs and generics.
This idea was the focus of a recent op-ed in The Wall Street Journal titled “The Answer to High Drug Prices Is More Drugs, Faster,” penned by Dr. Tom Coburn, former senator from Oklahoma and an adviser to Project FDA at the Manhattan Institute, and Michael Howard, senior fellow and director of health policy at the Institute. In the goal of providing the best and most innovative drugs to patients, competition is key – for both innovator drugs and their follow-on counterparts.
Biosimilars, in particular, are key for this competition. Biosimilars are lower-cost alternatives of biologic drugs, which include many of the specialty, high-cost drugs used today to treat chronic diseases like cancer and diabetes. The biosimilar market is the U.S. is still in its infancy, with only one approved biosimilar on market today. Looking at a mature biosimilar market, however, like those in Europe and Australia, shows the immense benefits a robust biosimilars market has on driving down drug prices and increasing access. In fact, in Europe, discounts of biosimilars are around 30 percent on average. And, with such significant savings on drug costs in the healthcare system, more investment can go into the development of new, innovative therapies.
In order to reap these cost-reduction benefits, the U.S. needs a competitive biosimilars market – and, to create that, regulatory agencies like the Food and Drug Administration (FDA) and the Centers for Medicare and Medicaid Services (CMS) need to issue policies that support the development and uptake of biosimilars. In this effort, we urge the FDA to support the use of the same INNs for biosimilars and the products they reference, and for the CMS to create rules that allow the same HCPCS code for biosimilars and their reference products. Both of these actions will allow doctors to prescribe these safe and effective therapies with ease, increasing their use and encouraging more companies to enter the biosimilars market – thus, increasing competition and driving prices down further.
Competition is key to reducing high drug costs – and biosimilars, in particular, will play a critical role in the U.S. to lower the cost of specialty biologic drugs. Let’s embrace this powerful tool for increasing patient access and promoting innovation by putting in place policies that provide a clear development pathway for companies and promote biosimilar uptake among physicians and patients.