GUEST COLUMN:

Nevadans deserve lower drug prices

Fri, Jul 3, 2020 (2 a.m.)

Drug prices have been coming down, with more drugs facing generic competition as they come off patent protection.

However, one area where drug prices have not come down is in biologic drugs. Biologic drugs have been around since the late 1980s, with the development of insulin, followed by human growth hormone and many others.

Those drugs should have competition. And that competition should come from pharmaceuticals known as biosimilars.

A biosimilar, true to its name, is highly similar to an existing FDA-approved biological drug, and has no clinically meaningful differences in safety, purity, effectiveness and potency. Simply put, biosimilars are lower-cost alternative medicines to expensive biologic medicines.

Biologic medications are developed from blood, proteins, viruses and living organisms and are used to prevent, treat and cure human disease. In addition to insulin and human growth hormone, examples of these drugs include Humira and Enbrel, which treat autoimmune diseases such as Crohn’s disease and lupus, as well as cancer-treating drugs and Botox.

A biosimilar is an almost identical copy of its brand biologic equivalent — similar to a generic drug copy of a traditional small-molecule drug.

Enacting laws and regulations that encourage the adoption and use of biosimilars is a sure-fire way to lower the costs that employers, the state of Nevada and patients pay for prescription drugs. 

According to a Pacific Institute study: “the current use of biosimilars saves the national health care system $253.8 million annually relative to an ‘all originator biologics’ scenario. More promising, biosimilars could generate significantly more annual savings. Annual total health care savings of $2.5 billion, $4.8 billion, and $7.2 billion are possible, if their market share grew to 25%, 50%, or 75% of the market, respectively.”

Specifically, Nevada could save $28 million per year if biosimilar adoption increased to 75%.

One would think that biosimilar use would already be widespread considering the savings — so why isn’t it? 

Simply stated, because of what are known as pharmacy benefit managers, the middlemen who control which drugs are put on the formularies of insurers. These managers do not want biosimilars included because they would lose rebate revenue — monies that were designed to reduce patients’ out-of-pocket expenses. Pharmacy benefit managers receive rebates based on the list price of the drug, which means that the higher the price of the drug, the bigger the rebate for the manager.

Many biologic drugs will lose their patent protection over the coming years, and cheaper biosimilar versions of these drugs will be coming available on the market. Our legislators need to work now to ensure that these drugs are made available to patients.

Both the special session scheduled for July and the upcoming 2021 legislative session provide the opportunity for such action. There has never been a greater urgency or need to cut costs. Requiring pharmacy benefit managers to add biosimilar medications to formularies when available, and requiring them to pass rebates directly to consumers, would guarantee savings for the state and Nevadans, and would make sure that all Nevadans can get the drugs they need.

John Laub is president of the Nevada Biotechnology & Health Science Consortium, which was founded in 2007 to promote science in Nevada.

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