A new study of biosimilars — copies of branded biologic medicines — showed that early entries in the U.S. market did not provide employers the healthcare savings that were possible because adoption has been slow.

The study from Johns Hopkins University, which examined spending on the treatments Remicade from Johnson & Johnson and Neupogen from Amgen Inc. at 13 large employers, found that biosimilars represented only a fraction of insurance claims in 2018 despite significant discounts to price.

Overall, extrapolating the data for the two therapies to all self-insured companies, the study found that savings would have added up to as much as $1.4 billion if the less expensive biosimilars were used over the branded products. Combined, spending on the two medicines and their biosimilars represented about 2.7% of the typical company's annual spending.

Biosimilars of the rheumatoid arthritis drug Remicade, which at the time of the study included Inflectra from Pfizer Inc. and Renflexis from Merck & Co. Inc., came in at a median discount of 26% but represented only 0.5% of claims. All other claims were for Remicade.

Pfizer, one of the world's largest drugmakers, publicly complained for more than a year about impediments to its biosimilar product sales and filed a citizens petition with the U.S. Food and Drug Administration in 2018.

The Johns Hopkins report found that companies would have saved an average of $1.3 million under the discount rates for Remicade biosimilars.

Uptake of Neupogen biosimilars, including Granix from Teva Pharmaceutical Industries Ltd. and Zarxio from Sanofi's Sandoz unit, was higher at 68.8% of claims. The study found that companies would have saved an average of $17,838 each on the cancer drug in 2018 with complete biosimilar uptake.

The study's authors presented results during a March 31 webinar hosted by the ERISA Industry Committee, known as ERIC. ERISA refers to the Employee Retirement Income Security Act passed in 1974 to establish minimum standards for pension plans in private industry.

About 180 million people are covered by employer-sponsored healthcare in the U.S., according to ERIC.

Employer-sponsored healthcare bears the load

"We believe employers will continue to struggle with healthcare costs, particularly the escalating prices of biologic medicines," ERIC President and CEO Annette Guarisco Fildes said on the call.

Fildes said that nearly half of all spending on pharmaceuticals is devoted to specialty medicines, which includes biologics like Remicade and Neupogen. In a separate study sponsored by ERIC and performed by Willis Towers Watson PLC's Rx Collaborative, results showed that biologics accounted for less than 1% of prescriptions but made up 40% of the group's total drug spending, Fildes said.

Erik Sossa, chairman of ERIC's board of directors and vice president of global benefits and wellness at PepsiCo Inc., said ensuring a sustainable cost structure in the wake of rising drug prices is critical to future coverage and that further uptake of biosimilars would be key to the effort.

"One of the developments that help regulate the market as we've always used in the past, is good healthy competition," Sossa said. "The hope is they can do for biologics what generics did for the industry years ago."

The Biologics Price Competition and Innovation Act of 2009, or BCPI, established the pathway for approval of biosimilars, and 26 have since been approved in the U.S., though some have been blocked from the market by patent law or payer agreements.

For the sake of the Johns Hopkins study, Remicade and Neupogen were the only two branded drugs with biosimilar competition on the market for more than a year before 2018.

"If we compare 2010 to 2020, Express Scripts data shows the percentage of prescription drug spending is actually higher, not lower, and the problem is getting worse," Fildes said.