Most health plans are covering at least one of the two biosimilar products currently on the market, according to new research by the strategic advisory company Avalere. Based on a national survey of health insurers, 81 percent of plans report they are covering a biosimilar product. Nearly all payers indicate that a biosimilar’s cost relative to the originator is a key decision-making factor for determining coverage. In addition to costs compared to the originator, health insurers cite efficacy and safety of the biosimilar as important factors for coverage decisions.

Since the biosimilar approval pathway was first created in 2010, FDA has approved five biosimilars, two of which have launched: Zarxio (filgrastim-sndz), a biosimilar to Neupogen marketed by the Novartis generics division Sandoz and approved in March 2015, and Inflectra (infliximab-dyyb), a biosimilar to Remicade marketed by Pfizer and approved in April 2016. The two products were approved as biosimilars with all the available indications of their reference products. Neither product sought an FDA designation of interchangeability.

To supplement the survey findings, Avalere researchers reviewed how insurance plans cover Zarxio and Inflectra. Nearly two years after its launch, Zarxio is covered by 94 percent of employer-sponsored insurance plans. More than 40 percent of employer plans cover Zarxio in the preferred brand tier, which is in line with the average of its competitors. Placement on the preferred brand tier results in lower out-of-pocket costs for patients compared to drugs on non-preferred brand or specialty tiers.

Zarxio and Inflectra, the first two biosimilars approved by FDA, have already made significant inroads in the payer space.


“Payers are placing Zarxio in preferred brand tiers, which suggests they are increasingly comfortable with biosimilars once they become familiar with them,” says Gillian Woollett, senior VP at Avalere. “It also suggests uptake of biosimilars by payers may not depend on biosimilars receiving interchangeability status from FDA.”

A review of insurance plans’ formularies shows that the market for Inflectra is still developing, Avalere says. After seven months on the market, 42 percent of employer plans are covering Inflectra. Based on the most recent data available as of February 2017, 64 programs were enrolled in the FDA’s Biosimilar Products Development Program, and the agency had received meeting requests to discuss the development of biosimilars for 23 different reference products.

So far, manufacturers have publicly disclosed the submission of 14 biosimilar applications to FDA, including those already approved. “Biosimilars were intended to increase competition among biologics and potentially reduce drug costs, but the biosimilars market has been slow to develop in the U.S.,” says Tom Kraus, senior VP at Avalere. “The growth of the biosimilar market will be measured as policy, market, and intellectual property related challenges continue to be addressed.”

According to Avalere’s researchers, several obstacles exist to biosimilar market growth, including the complexity of biosimilar development, uncertain provider and patient acceptance, and intellectual property rights. One such barrier was addressed with the recent Supreme Court decision (Amgen Inc. v. Sandoz Inc., decided in June) that will allow a biosimilar to launch sooner than 180 days after approval. Continuing to overcome these barriers, Avalere researchers say, will be key to creating a robust biosimilars market.