When the FDA introduced ground rules for approving biosimilars, there was much debate over how much impact there would be on biotech drug prices.
Now that a number of years have passed, a team from Stanford, Penn, and USC has just brought together some important data.
Historic data suggests that drug prices drop when several generic entrants are competing against a costly originator drug. (With small molecules, like Prozac, multiple generic makers usually do enter the market). New work confirms that the same seems to apply for trastuzumab (Herceptin), based on a 2023 paper by Horn et al.
- The first biosimilar was priced 15% below Herceptin (e.g. "shadow pricing" which avoids triggering a price war).
- The fifth biosimilar was 58% below the originator brand.
- In addition, the originator price fell 29% between 2019 and 2022.
- Biosimilar market shared (with 3 biosimilars) reached 32%.
Horn et al. (2023) Biosimilar competition and payments in Medicare: The case of trastuzumab. JCO Oncol Pract 19:e476-83. https://pubmed.ncbi.nlm.nih.gov/36638330/
See a similar article assessing similar public data, from Chen et al. in Health Affairs (PMID 37276475).
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FDA has a webpage on generic drug competition and pricing, including a graph of price vs number of competitors.
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Of related interest, a 2023 Health Affairs article on innovative payment models for ultra high cost drugs (Horrow & Kesselheim). And similarly, Zhang & Shugarman write about value based "financing" for cell and gene therapies in J Med Econ 2024.
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AI Corner
I asked Chat GPT to illustrate Zhang & Shugarman and it came up with this pair.
