Challenges continue, but generics companies see a bright future with biosimilars
More than just inexpensive substitutes, generic drugs offer a glimpse into certain issues that pharmaceutical companies are facing now. While consumers depend on generics as a low-cost alternative to brand medications, the category is a complex one that is enduring the usual challenges plus some unusual barriers to success. Meanwhile, the state of the generics category is also benefiting from exciting innovations, notably biosimilars.
One of the biggest trends right now relates to pricing. While other categories are seeing inflation, generics are experiencing deflation. That’s due to many factors, but one of the main drivers is the influx of newly approved medicines, resulting in increased competition in a crowded market. Meanwhile, the industry is also handling more typical challenges of supply chain constraints, rising manufacturing costs and the emergence of buying groups. Industry executives say they are adapting by moving manufacturing and focusing on biosimilars.
The Princeton, N.J.-based Dr. Reddy’s is focused on new product launches and continuing the momentum that it gained over the last three years, which saw 70 or more launches. There are challenges though, and not just the usual issues of supply chain constraints and ingredient shortages. Kalawadia points to the emergence of buying groups that negotiate on behalf of their members. “Over the years, more and more of these groups have started to pop up, so we’ve got a smaller subset of customers to work with as a result,” he said. “We’re still talking with the same pharmacies, we’re still strategizing with the same buyers, but when it comes to the decision-making process, we’re working with these buying groups.”
The solution for Dr. Reddy’s, Kalawadia said, has been the three pillars of product quality, ability to supply product on time and being competitive with price points.
The use of branded and generic drugs is increasing. According to “U.S. Medicines Trends 2022 Report,” released in April by the IQVIA Institute for Human Data Science, prescription drug use reached a record 194 billion daily doses in 2021. Days of therapy from all types of prescription medicines grew 3.3% in 2021, a rebound from the 1.9% growth in 2020 when usage was disrupted by the pandemic. When people canceled or postponed certain healthcare appointments, new prescriptions for acute and chronic therapies decreased. COVID-related medicines accounted for part of the growth, and the non-COVID medicines market grew more slowly at 5%.
[Read more: Avalere analysis examines Medicare Part D’s plan tier placement of generics]
The IQVIA report also showed that generics make up 92% of prescriptions and account for 16% of invoice-level spending. At the same time, generics account for 65% of patients’ out-of-pocket costs.
Biosimilars Generate Excitement
Among the trends, the report noted, is the growing impact of biosimilars, which increased significantly, offsetting increased use of branded medicines. Oncology is a big area for biosimilars, and manufacturers have an opportunity to generate revenue from biosimilar versions of three molecules in the oncology market, in particular — bevacizumab, rituximab and trastuzumab — because these three had recent losses of exclusivity, or LOE. Biosimilars will reduce biologic spending by $40 billion through 2026, the report projected.
Manufacturers acknowledge that biosimilars are the future. “Biosimilar adoption in the U.S. continues to grow at a healthy rate,” said Harsher Singh, senior vice president of Amneal Biosciences. “We expect savings created in the healthcare system from biosimilars to outstrip generics over time.”
[Read more: Alembic intros generic Olux foam]
Amneal announced three products approved this year: Releuko, a filgrastim biosimilar referencing Neupogen; Alymsys, a bevacizumab biosimilar referencing Avastin; and Fylnetra, a pegfilgrastim biosimilar referencing Neulasta. “We see this as the next wave of affordable medicines that’s still in its early innings,” Singh said. “We are positioning ourselves to play a large, critical and long-term role in this market, where portfolio and key capabilities across the value chain matter, similar to complex generics.”
Barriers to keeping drug prices down
Certain practices are resulting in patients unnecessarily paying more at the pharmacy counter.
By Nora Caley
Generics help save consumers and other payers money, but certain practices are resulting in higher prices and delayed access to generics and biosimilars, said Dan Leonard, CEO of the Association for Accessible Medicines, or AAM.
Leonard noted two of the practices contributing to higher prices: placing generic drugs on nongeneric formulary tiers and preferring high-cost, high-rebate drugs over lower-priced alternatives. One issue is that first generics are usually not covered by plan formularies. He noted that in 2021, in the Medicare drug program, only 21% of first generics that were launched in 2020 were covered by plan formularies. “Data show that it normally takes three years for first generics to be covered on more than half of Medicare Part D formularies,” he said. “And once generics do get covered by Part D formularies, the story does not improve.”
Mark Cuban’s generics play
What will the billionaire’s new drug company mean for the industry?
By Nigel F. Maynard
Billionaire businessman and owner of the Dallas Mavericks professional basketball team Mark Cuban shocked the retail pharmacy world when he announced earlier this year the creation of a new online pharmacy to drastically expand access to affordable pharmaceuticals.
“We will do whatever it takes to get affordable pharmaceuticals to patients,” Alex Oshmyansky, CEO of Mark Cuban Cost Plus Drug, said at the time of the announcement. “The markup on potentially lifesaving drugs that people depend on is a problem that can’t be ignored. It is imperative that we take action and help expand access to these medications for those who need them most.”
[Read more: Study: Medicare could have saved $3.6B buying generics from Mark Cuban Cost Plus Drug]
As the company explained, it is a registered pharmaceutical wholesaler, so it will bypass middlemen and outrageous markups. The pharmacy’s prices reflect actual manufacturer prices plus a flat 15% margin and pharmacist fee. With the help of digital healthcare company Truepill, patients can expect a seamless, secure e-commerce experience as they navigate the pharmacy’s website, built and powered by Truepill’s digital health platform, the company said.
“As an entrepreneur, any time I see an industry that’s been run the same way for decades, if not generations, and it’s been obfuscated to the point where there’s no transparency and you have associations trying to protect that opaqueness, to me that’s an opportunity and that’s exactly what we saw with the prescription drug industry,” Cuban told the “PBS Newshour” in June. “And by adding transparency and our approach at Cost Plus Drugs, which is we’ll show you our actual cost, we’ll mark it up 15%, we’ll add $3 pharmacy handling fee and $5 shipping. And that’s all you ever pay.”
Reviews are mixed on what this new endeavor will mean for traditional retail pharmacies.
Generics new product launches
The following are some recently announced or launched generics and biosimilars.
By Nora Caley
Alembic, Bedminster, N.J.
Cosette Pharmaceuticals, in collaboration with Aleor Dermaceuticals, a wholly owned subsidiary of Alembic Pharmaceuticals, announced that the FDA approved the ANDA for an NBE version of Abreva (docosanol cream 10%) in a 2 g tube and pump formats. Abreva is a licensed trademark of GlaxoSmithKline.
This approval represents the first ANDA approval in the pump format, and Cosette plans to launch the product across the U.S. retail channel.
Amneal Pharmaceuticals, Bridgewater, N.J.
Amneal Pharmaceuticals announced FDA approval of the Biologics License Application, or BLA, for filgrastim-ayow, a biosimilar referencing Neupogen. The product will be marketed under the proprietary name Releuko, and is used to treat neutropenia (low neutrophils, a type of white blood cells that fight infection), which is commonly experienced by patients undergoing chemotherapy. Releuko was developed in collaboration with Kashiv Biosciences in Chicago.