Potential Savings from Biosimilars in Canada*

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Biologic drugs, which are one of the highest growing market segments in Canada, are now facing competition from emerging biosimilar products. Unlike generics, biosimilars are not identical to their reference drug products, but are rather subsequent entry versions of Canadian approved innovator biologics with demonstrated similarity to a reference biologic drug. Nevertheless, the market entry of biosimilars offers the potential for important cost savings.

This analysis explores the potential savings from biosimilars for a select number of biologic drugs that have either recently lost market exclusivity or are expected to over the next few years. The estimates are based on various scenarios of market entry, uptake and price discounts, as observed in Canadian (for existing biosimilars) and foreign markets.

International availability, uptake and pricing information were determined based on data from the IMS MIDAS™ Database for member countries in the Organisation for Economic Co-operation and Development (OECD).

Key Findings

1. The list of selected biologics comprises a number of important drugs

The analysis considers 13 biologic drugs with recently launched biosimilars or with biosimilars that are expected to be launched over the next three years. Estimates of potential savings are determined for each of these drugs for the third year after launch.

The drugs are grouped based on their treatment types into acute and chronic categories. The analytical scenarios differ for each category.

Target drugs – biosimilars expected on the Canadian market
Drug (trade name) Biosimilar availability
OECD Canada
Year No. of countries NOC Forecasted period
Epoetin alfa (Eprex)* 2007 20   2019‒2021
Filgrastim (Neupogen)* 2008 26 2015 2017‒2019
Infliximab (Remicade)† 2012 24 2014 2016‒2018
Follitropin alfa  (Gonal-f)* 2014 18   2020‒2022
Insulin glargine (Lantus)† 2015 20 2015 2017‒2019
Etanercept (Enbrel)† 2016 12 2016 2018‒2020
Adalimumab (Humira)†       2019‒2021
Bevacizumab (Avastin)†       2020‒2022
Natalizumab (Tysabri)†       2020‒2022
Omalizumab (Xolair)†       2019‒2021
Ranibizumab (Lucentis)†       2019‒2021
Rituximab (Rituxan)†       2019‒2021
Trastuzumab (Herceptin)†       2019‒2021

*Acute; †Chronic

2. The select biologic drugs have increased sales and a relatively high market share in Canada

The market for the select biologics has been rapidly evolving in recent years, with Canadian sales growing from $0.8 billion in 2006 to $3.6 billion by 2016, and accounting for 15.9% of Canada’s pharmaceutical sales. The market share for these products is higher in Canada than in foreign markets, such as the United States, other PMPRB7 countries and other OECD countries (12.6%, 10.9% and 6.9%, respectively). The Canadian market is also highly concentrated, with the five top-selling biologics accounting for 11.4% of the total pharmaceutical sales in Canada in 2016: infliximab, adalimumab, ranibizumab, etanercept and insulin glargine.

Select drugs' share of total pharmaceutical market in Canada and the OECD

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Image 2

Figure description

This figure consists of two graphs. The first graph is a stacked area graph showing cumulative annual sales of the select biologics from 2006 to 2016 per drug. Values are given below in millions of dollars.

Drug 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Infliximab $160M $219M $277M $348M $421M $489M $545M $672M $771M $883M $1,008M
Adalimumab $11M $50M $115M $182M $239M $292M $355M $420M $487M $563M $649M
Etanercept $154M $196M $227M $248M $265M $284M $305M $322M $330M $337M $337M
Ranibizumab $0M $2M $45M $105M $172M $231M $279M $398M $467M $456M $337M
Insulin glargine $18M $30M $44M $68M $89M $113M $143M $175M $206M $232M $259M
Trastuzumab $133M $132M $132M $136M $143M $150M $168M $181M $210M $225M $251M
Rituximab $103M $124M $140M $157M $170M $180M $193M $211M $227M $230M $241M
Filgrastim $76M $85M $88M $90M $94M $106M $116M $119M $126M $128M $128M
Omalizumab $0M $0M $5M $17M $20M $25M $35M $48M $59M $85M $106M
Bevacizumab $16M $20M $46M $73M $90M $94M $97M $104M $105M $107M $104M
Epoetin alfa $167M $151M $135M $126M $116M $114M $113M $107M $107M $101M $99M
Natalizumab $0M $5M $9M $22M $25M $27M $36M $32M $40M $46M $50M
Follitropin alfa $4M $6M $6M $7M $8M $14M $18M $18M $18M $21M $14M
Total $844M $1,021M $1,269M $1,578M $1,852M $2,119M $2,404M $2,808M $3,152M $3,412M $3,583M

The associated bar graph depicts the share of sales of the select biologics in 2006 and 2016 as a percentage of the total pharmaceutical market.

Country grouping 2006 Select drugs 2016 Select drugs 2016 Top 5 select drugs
Canada 5.6% 15.9% 11.4%
United States 8.8% 12.6% 8.9%
Other PMPRB7 5.0% 10.9% 6.0%
Other OECD 3.4% 6.9% 4.2%

3. Biosimilar uptake varies by country and depends on the treatment type

The analysis considers the uptake of available biosimilars in OECD countries by treatment type: acute versus chronic. While important variations across countries were observed, two scenarios of uptake were identified.

Biosimilar uptake, by treatment type, OECD markets

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Image 3

Figure description

This line graph depicts two scenarios for biosimilar uptake in the OECD countries: average and high. Each uptake scenario is further subdivided by treatment type: acute versus chronic, as described below.

Scenario OECD median biosimilar uptake
Acute high uptake 85% Five OECD countries with the highest uptake averaged across all acute treatment drugs.
Chronic high uptake 85% Three OECD countries with the highest uptake for an infliximab biosimilar.
Acute average uptake 50% All available OECD markets averaged across the acute treatment drugs.
Chronic average uptake 30% All available OECD markets with an infliximab biosimilar.

The timeline for the uptake is based on 3 years or 12 quarters.

Yearly Quarter Chronic average uptake Chronic high uptake Acute average uptake Acute high uptake
Year 0 0 0 0 0
Year 1, quarter 1 0.4% 0.3% 1.4% 32.7%
Year 1, quarter 2 2.5% 2.2% 9.8% 49.5%
Year 1, quarter 3 5.5% 17.9% 13.6% 50.8%
Year 1, quarter 4 9.2% 20.9% 20.0% 62.9%
Year 2, quarter 1 12.9% 29.3% 23.6% 77.5%
Year 2, quarter 2 16.8% 42.5% 29.7% 79.6%
Year 2, quarter 3 21.5% 63.0% 36.4% 76.7%
Year 2, quarter 4 24.6% 75.0% 40.3% 75.8%
Year 3, quarter 1 24.9% 84.6% 45.9% 82.0%
Year 3, quarter 2 25.2% 90.0% 51.6% 81.1%
Year 3, quarter 3 27.9% 93.4% 53.9% 83.1%
Year 3, quarter 4 32.4% 93.9% 56.8% 87.1%

4. Biosimilar prices are generally lower in OECD markets than in Canada

A review of the available prices of biosimilars in OECD markets suggests that the median discounts relative to the reference biologic drugs are relatively modest, in the range of 13% to 34%. However, the Canadian prices of the reference biologics are markedly higher than prices in the majority of the OECD nations. To align Canadian biosimilar prices with OECD levels, the discounts would need to be in the range of 39% to 61%. The limited experience with available biosimilars in Canada suggests that the actual price discount is substantially lower in some cases, in the range of 12% to 23%. Remicade is the only drug in Canada with a biosimilar discount of nearly half (47%), which aligns its price with international levels.

Two assumptions of biosimilar discount were considered for both acute and chronic treatments: a high of 50% and a low of 25%.

Prices of biosimilars in Canada and the OECD
  OECD Canada Median OECD
price discount relative to Canadian reference drug price
Drug (strength) Median list price Median price discount List price Price discount
Epoetin alfa,
10 k/ml
$84 34% 60%
$71 30% $143 21% 61%
Follitropin alfa,
600 IU/ml
$228 13% 59%
100 mg
$521 24% $525 47% 47%
Insulin glargine,
100 IU/ml
$3.78 16% $5.39 12% 39%
50 mg/ml
$305* 23%

* Based on the value reported by CADTH’s Canadian Drug Expert Committee Final Recommendations.

5. An upper and lower band of biosimilar uptake and price discounts were considered in estimating the potential savings

For the acute biologics, the upper band assumes a high-uptake and high-discount combination: 85% and 50%, respectively. The lower band assumes an average-uptake and low-discount combination: 50% and 25%, respectively.

Similarly, for the chronic biologics, the upper band assumes a high-uptake and high-discount combination: 85% and 50%, respectively; while the lower band assumes an average-uptake and low-discount combination: 30% and 25%, respectively.

Assumptions of biosimilar uptake and price discounts under various scenarios

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Image 2

Figure description

This bar graph depicts the assumptions of biosimilar uptake used in the analysis: for each treatment type, acute and chronic, a high uptake and high discount scenario and an average uptake and low discount scenario are illustrated. Uptake values are given as a percentage of market share and discounts are listed as a percentage of the reference product price.

  Acute high uptake Acute average uptake Chronic high uptake Chronic average uptake
Uptake 85% 50% 85% 30%
Discount 50% 25% 50% 25%

6. The potential savings from biosimilar competition vary widely depending on the market size, the timing of biosimilar availability, the uptake and the price discount

A range of potential savings were estimated based on the forecasted market for each drug in the third year after launch, and for the upper- and the lower-band scenarios. The forecasts use up to five years of historical data and project utilization up to three years beyond the expected biosimilar launch date to allow for projections of the market penetration. The estimated savings are reported as absolute dollar amounts for the third year.

Potential savings range from a low of 8% for chronic drugs in the average-uptake, low-discount scenario to a high of 43% for both the acute and the chronic drugs in the high-uptake, high-discount scenario. The potential savings depend on the market size of the reference biologic. The timing of biosimilar availability will determine when these potential savings may be realized.

Estimated potential savings in the third year following biosimilar entry, Canada
Drug 2016 Sales* Forecast Low estimate High estimate
Year 3 Sales†
Acute 13% savings 43% savings
Filgrastim $126M 2019 $145M $18M $62M
Epoetin alfa $99M 2021 $75M $10M $32M
Follitropin alfa $14M 2022 $20M $3M $8M
Chronic 8% savings 43% savings
Infliximab $1004M 2018 $1,210M $91M $514M
Adalimumab $649M 2021 $974M $73M $414M
Etanercept $337M 2020 $347M $26M $147M
Ranibizumab $337M 2021 $337M $25M $143M
Insulin glargine $241M 2019 $306M $23M $130M
Rituximab $241M 2021 $286M $21M $122M
Trastuzumab $180M 2021 $202M $15M $86M
Bevacizumab $104M 2022 $110M $8M $47M
Omalizumab $106M 2021 $184M $14M $78M
Natalizumab $50M 2022 $62M $5M $27M

*For the brand name product.
†Assuming no biosimilar availability.

Note: The PMPRB7 countries include the seven comparator countries the PMPRB considers in reviewing the prices of patented drugs: France, Germany, Italy, Sweden, Switzerland, the United Kingdom and the United States.

Limitations: Canadian and international sales and list prices available in the IMS MIDAS™ Database are estimated manufacturer factory-gate list prices and do not reflect off-invoice price rebates and allowances, managed entry agreements, or patient access schemes.

Data source: Unless otherwise noted, the availability, uptake and pricing information in this analysis was determined based on the IMS MIDAS™ Database (All rights reserved).

Disclaimer: Although based in part on data obtained under license from IMS AG’S MIDAS™ Database, the statements, findings, conclusions, views and opinions expressed in this report are exclusively those of the PMPRB and are not attributable to IMS AG.

NPDUIS is a research initiative that operates independently of the regulatory activities of the PMPRB.

* Updated with 2016 data.

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