Potential Savings from Biosimilars in Canada*

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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.

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.

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.

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%.

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.

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.

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

* Updated with 2016 data.