Health Affairs (Quarter 1, 2015) Vol. 34, No. 2, P. 294; Falit, Benjamin P.; Singh, Surya C.; Brennan, Troyen A.

The cost of small-molecule drugs in the United States has been contained due to the widespread adoption of generic medications. In contrast, biologics have not yet encountered competition from follow-on products and are currently the fastest growing sector of the U.S. pharmaceutical market. In this study, researchers compared the legislative framework governing small-molecule generics to that of follow-on biologics and evaluated management tools likely to help promote the adoption of biosimilars. The Biologics Price Competition and Innovation Act created a shortened pathway for follow-on biologics, but "weak statutory incentives" could create obstacles, the researchers say. In addition, there has been concern that competition under the biologics act may be less robust compared with that posed by small-molecule generics under the Hatch-Waxman Act of 1984, due to such factors as absence of market exclusivity for the first biosimilar approved and requiring follow-on manufacturers to disclose their manufacturing processes to the manufacturer of the reference product. The researchers predict that provider hesitance and limited competition from biosimilars will challenge payers and pharmacy benefit managers to lower prices and increase uptake of follow-on biologics. According to the authors, successful payers and pharmacy benefit managers will use a number of methods to "control spending by promoting uptake of biosimilars across both the pharmacy and medical benefits."

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