In today’s deeply polarized and partisan political environment, few issues better unite the American people than tackling the high cost of health care and prescription drugs. It’s no secret that many Americans are frustrated by rising health care costs, with 8 in 10 saying it’s very important that Congress work on lowering prescription drug expenses.
The Affordable Care Act ushered in one of the greatest increases in health care coverage in U.S. history. Eleven years later, thanks to Delaware leaders like President Joe Biden and Sen. Tom Carper, D-Del., the sweeping pandemic-relief bill finally provided the first real expansion of the law’s insurance coverage and Medicaid expansion. Despite this, we still haven’t realized ACA’s full potential when it comes to lowering drug costs.
While ACA is most heralded for its expansion of access to affordable, quality health care, it also contained important provisions to lower drug costs. One of the lesser-realized components of ACA, the Biologics Price Competition and Innovation Act, paved the way for the Food and Drug Administration to approve biosimilars, or generic-like alternatives to expensive biologic drugs.
Biologics are powerful and lifesaving medications that have revolutionized the industry and changed the treatment of diseases, including certain cancers, multiple sclerosis, rheumatoid arthritis and psoriasis, to name a few. These treatments have transformed the lives of patients in Delaware and are predicted to become more important than ever in the coming years, but they are accompanied by a steep price tag. In fact, biologics are the single largest driver of prescription drug spending — making up 40% of all drug expenses but accounting for just 2% of prescriptions filled.
By definition, biosimilars are biological products that are highly similar to and have no clinically meaningful difference from an existing FDA-approved reference product (brand-name biologic). This means they provide the same safe and effective treatment but at an average of one-third less the price.
In the years since ACA was passed, FDA has approved 30 biosimilar products and 20 have launched in the U.S. While this is significant, the full potential of these savings for patients and for taxpayers is far from being realized and more must be done by Congress to pass meaningful legislation that supports biosimilar therapies.
The first biosimilar became available to patients in the U.S. in 2015, and so far, they have saved Americans $4.5 billion. But savings many times greater can be achieved with a stronger market. Let’s compare this to the generics market as an example. Generics have saved patients trillions since they were developed and marketed. Initially sowed by doubt, it took the passage of legislation (the Hatch-Waxman Act in 1984) to boost the market.
And while direct cost savings are a primary advantage, increased therapy adherence and compliance are associated benefits of generic use. Biosimilars are poised to save patients $100 billion by 2024, but that is only if their use increases. This is a dynamic and emerging market in the U.S. To make sure patients, employers and taxpayers receive the billions in lower drug costs that were a promise of ACA, we need real policies to support patients’ full access to these lower-cost alternatives.
For too long, we’ve experienced misaligned incentives and anti-competitive contracting practices that force physicians and patients to use the higher-cost products, when competition from biosimilars could be driving down health care costs. Sen. Carper last Congress introduced bipartisan legislation that would put an end to this by incentivizing biosimilars through a temporary increase in the reimbursement rate to providers. We now need him to fight to include this legislation in the massive budget-reconciliation process making its way through Congress.
Republicans and Democrats in Congress may disagree on how best to lower prescription drug pricing, but biosimilars have proven to be a commonsense, bipartisan solution that have attracted support from both sides of the aisle and both ends of the Capitol.
Through the American Rescue Plan, millions of Americans will be eligible to receive affordable health care and others’ premiums will drop by thousands of dollars. This is encouraging, but President Biden and Sen. Carper can do more to fulfill ACA’s full promise to lower drug costs. As the next generation of generics, biosimilars are the solution to how we can tackle the biggest driver of drug spending and lower health care costs for Americans. We call on Sen. Carper to continue his fight for legislation to support biosimilars, bringing real relief to Delawareans and patients across the country.
Meaghan Rose Smith is the executive director of the Biosimilars Forum, a nonprofit organization to advance public policies that encourage awareness, access and adoption of biosimilars in the United States. She has spent her career in health care policy, with top roles in the U.S. Department of Health & Human Services, the U.S. Senate and the U.S. House of Representatives.