Biosimilars in Canada: Current Environment and Future Opportunity

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1. Biosimilars tend to be launched later and have a lower uptake in Canada than internationally

By the end of 2018, 5 biosimilars had been launched in Canada compared with 13 in Europe and 7 in the United States, some of which have been available for a number of years. For example, epoetin alfa biosimilars were launched in Europe in 2007, and biosimilars for follitropin alfa were launched in 2014, though neither are currently sold in Canada.

Once biosimilars are launched in Canada, their uptake is typically lower than in the OECD and PMPRB7 countries. In the fourth quarter of 2018 (Q4-2018), only the somatropin biosimilar outpaced international uptake. Even after indexing based on the time of launch, the uptake of infliximab, etanercept, and insulin glargine biosimilars in Canada lags behind other countries.

Initial biosimilar approvals and market availability in Canadian and international markets, Q4-2018

Biologic medicine (Originator)	Europe		United States		Canada
	Approval	First sales	Approval	First sales	Approval	First sales
Infliximab (Remicade)	Sept-13	Q4-2013	Apr-16	Q4-2016	Jan-14	Q1-2015
Adalimumab (Humira)	Mar-17	Q4-2018	Sept-16		May-18
Etanercept (Enbrel)	Jan-16	Q1-2016	Aug-16		Aug-16	Q4-2016
Insulin glargine (Lantus)	Sept-14	Q2-2015	Dec-15	Q4-2016	Sept-15	Q1-2016
Rituximab (MabThera/Rituxan)	Feb-17	Q2-2017	Nov-18		Apr-19
Trastuzumab (Herceptin)	Nov-17	Q2-2018	Dec-17		May-19
Filgrastim (Neupogen)	Sept-08	Q4-2008	Mar-15	Q3-2015	Dec-15	Q2-2016
Bevacizumab (Avastin)	Jan-18		Sept-17		Apr-18
Epoetin alfa (Eprex/Erypo)	Aug-07	Q4-2007	May-18	Q3-2018
Insulin lispro (Humalog)	Jul-17	Q4-2017	Dec-17	Q1-2018	Nov-17
Enoxaparin sodium (Clexane/Lovenox)	Sept-16	Q1-2017	NA*	NA*
Pegfilgrastim (Neulasta)	Sept-18	Q4-2018	Jun-18	Q3-2018	Apr-18
Somatropin (Genotropin)	Apr-06	Q2-2006	May-06	Q1-2007	Apr-09	Q3-2009
Teriparatide (Forsteo/Forteo)	Jan-17
Follitropin alfa (GONAL-f)	Sept-13	Q2-2014
Total	15	13	12	7	11	5

*Not approved under a Biologic License Application in the US; thus, approved generic versions are not reflected in this analysis.

Biosimilar uptake, by medicine, in Canada, the OECD, and the PMPRB7, Q4-2018

Figure description

This table and accompanying bar graph provide information on 13 biosimilars sold in Canada, Europe, and/or the United States in the fourth quarter of 2018. The biosimilar uptake in share of units is given for the median of the OECD countries, the median of the seven PMPRB comparator counties, and for Canada (if available). The total 2018 Canadian sales for each medicine (including the originator and any biosimilars) in millions of dollars is also provided.

		Biosimilar uptake by share of units
Biologic medicine	Sales in Canada, 2018 (in millions of dollars)	Median OECD	Median PMPRB7	Canada
Infliximab	$1,123	52.7%	60.2%	8.1%
Adalimumab	$800	0.7%	1.0%	0.0%
Etanercept	$309	19.4%	50.9%	11.0%
Insulin glargine	$285	8.4%	12.0%	7.3%
Rituximab	$266	20.5%	44.3%	0.0%
Trastuzumab	$186	4.5%	16.7%	0.0%
Filgrastim	$133	91.6%	93.7%	71.5%
Epoetin alfa	$103	82.3%	65.5%	-
Insulin lispro	$77	6.1%	4.9%	0.0%
Enoxaparin sodium	$58	10.2%	12.3%	-
Pegfilgrastim	$47	1.4%	1.3%	0.0%
Somatropin	$43	12.4%	19.0%	29.8%
Follitropin alfa	$18	27.3%	26.3%	-

2. Biosimilars take longer to gain market share in Canada than internationally

Biosimilars generally take one to two years to start gaining market share in Canada. This is very different from the international experience where there is steady market growth following launch.

These graphs compare the biosimilar uptake in Canada with international norms for four medicines: infliximab, etanercept, insulin glargine, and filgrastim. International comparisons include (1) the OECD median; and (2) the median of the four countries with the highest uptake in the OECD (based on uptake three years after launch). The graphs are indexed quarterly beginning with the launch date (Q0) in each market.

After an initial slow start, the uptake of biosimilars in Canada varies widely. The market share of the etanercept and infliximab biosimilars remained well below the OECD median a number of years after launch, with the infliximab biosimilar Inflectra only at 8% of the Canadian market after year 4 compared to a median of 55% for the OECD. In contrast, the filgrastim biosimilar Grastofil exceeded the OECD median uptake by midyear in year 2, and made another significant jump in the last quarter of year 3. This suggests that biosimilars used to treat acute conditions are able to a gain a better market share than those indicated for chronic diseases. Insulin glargine has experienced a much lower biosimilar uptake overall compared to other biosimilars, possibly due to its comparatively long treatment duration and low treatment costs.

Index of biosimilar uptake from launch, Canada and the OECD

Figure description

This series of four line graphs gives the index of biosimilar uptake from launch for four medicines with biosimilars available in Canada. The uptake in share of units is given for Canada, the OECD median, and the median of the four countries with the highest uptake in the OECD (referred to as the top OECD).

		Year 0	Year 1				Year 2				Year 3				Year 4
			Quarter 1	Quarter 2	Quarter 3	Quarter 4	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Quarter 1	Quarter 2	Quarter 3	Quarter 4
Etanercept	Canada	0%	0.02%	0.15%	0.41%	1.17%	3.16%	5.56%	7.52%	9.42%	11.01%
	OECD median	0%	0.20%	2.72%	8.13%	11.00%	15.45%	16.49%	21.11%	30.73%	38.19%
	Top OECD*	0%	0.05%	6.10%	15.91%	32.35%	46.38%	55.82%	61.42%	63.24%	62.28%
Filgrastim	Canada	0%	0.17%	0.85%	1.82%	3.19%	12.08%	20.84%	33.35%	42.95%	46.13%	47.92%	49.52%	71.49%
	OECD median	0%	1.74%	9.59%	13.86%	19.74%	22.06%	25.62%	29.54%	33.28%	34.24%	40.29%	46.60%	50.94%
	Top OECD*	0%	14.65%	33.21%	36.35%	43.70%	75.41%	79.50%	76.30%	86.42%	90.93%	90.85%	91.43%	91.24%
Infliximab	Canada	0%	0.02%	0.06%	0.12%	0.20%	0.22%	0.77%	0.61%	0.99%	1.48%	2.29%	3.04%	4.05%	4.99%	6.06%	6.65%	8.12%
	OECD median	0%	0.73%	2.79%	4.95%	5.97%	12.38%	17.04%	20.38%	24.32%	26.72%	32.61%	37.79%	42.74%	47.72%	50.79%	52.15%	54.58%
	Top OECD*	0%	0.83%	5.26%	14.34%	20.99%	29.96%	42.26%	59.11%	69.12%	78.57%	89.34%	91.07%	91.67%	92.77%	94.86%	95.32%	95.08%
Insulin glargine	Canada	0%	0.08%	0.30%	0.59%	0.86%	1.02%	1.20%	1.72%	2.42%	3.66%	5.01%	6.18%	7.29%
	OECD median	0%	0.10%	1.03%	1.94%	3.29%	3.98%	5.10%	5.57%	6.30%	7.36%	8.32%	8.77%	9.31%
	Top OECD*	0%	6.47%	16.76%	20.93%	23.55%	25.95%	27.98%	26.90%	27.70%	28.11%	29.16%	29.72%	30.67%

Note: The Canadian market includes both retail and hospital segments. Index begins at time of launch in each market. The period of analysis (years and quarters) is based on availabilty in Canada: the period from the time of launch until the time of this analysis (Q4-2018).
* Based on the median value for the four countries with the highest uptake in the OECD after three years.

3. Biosimilar prices in Canada are generally higher than international norms, despite greater discounts off originator pricing

Internationally, the prices of biosimilars are much lower than in Canada. On average, PMPRB median prices are 15% lower than Canadian levels, and median OECD prices are 39% lower. Although larger price discounts are generally realized in Canada, they are still not enough to offset the difference between Canadian price levels and international norms because the prevailing prices of originator biologics are higher in Canada.

In Canada, there is no discernable relationship between the relative discount and the uptake, as many other factors ultimately influence the switch from the originator to the biosimilar biologic. For example, infliximab has the greatest price discount but has experienced very low uptake, while filgrastim, which has the lowest discount, has the greatest uptake.

This also applies to international comparisons. Infliximab, which has a much higher relative Canadian price discount, lags significantly behind the OECD median in terms of uptake. Meanwhile, filgrastim, which has a much lower Canadian discount, has the highest Canadian biosimilar uptake, even when considering the indexed time from launch.

Biosimilar foreign-to-Canadian price ratios and price discounts relative to originator biologic, Q4-2018

* Calculated using the price of the originator biologic in the three-month period before biosimilar introduction.

4. Canadians are only realizing a fraction of the potential savings from biosimilars

The biosimilars of infliximab, etanercept, insulin glargine, and filgrastim potentially saved Canadians an estimated $93.9 million in drug costs in 2018. However, if biosimilar uptake and pricing in Canada had been more closely aligned with median OECD levels, the savings could have been many times greater.

Two alternative scenarios based on OECD biosimilar uptake and pricing are used to determine additional potential savings for 2018 and projected savings in 2021:

1. OECD moderate estimate: Assumes that Canadian biosimilar uptake matched the OECD median (indexed to launch) and biosimilar prices remained at the actual quarterly average Canadian price level.
   This would have resulted in a potential savings of $345.6 million in 2018.
2. OECD high estimate: Assumes that Canadian biosimilar uptake matched the median uptake in the top four OECD countries and the Canadian price matched the OECD median price.
   This would have resulted in a potential savings of $807.7 million in 2018.

Projecting to 2021, if the uptake of biosimilars in Canada continue on their current trends and prices remain at Q4-2018 levels, the total estimated future savings would be $293.9 million. If the moderate OECD uptake rates are applied, this increases to $694.7 million. Potential savings increase even further if the high OECD estimate is applied, resulting in estimated future savings of $1,135.7 million, $841.7 million more than the Canadian estimate.

Estimated savings from biosimilars in Canada, actual and potential for 2018, and projected savings for 2021

Figure description

There are two sets of bar graphs in this illustration. The first set shows the realized cost savings from biosimilars in Canada in 2018 and compares them to the potential savings that could have been realized under two alternate scenarios: a moderate and a high estimate using OECD median values for uptake and/or pricing. The second set compares the forecast savings in Canada in 2021 with the potential savings using the moderate and high OECD estimate.

	Realized (or forecast) savings	Unrealized potential savings
2018
OECD moderate estimate	$93.9 million (27%)	$251.7 million (73%)
OECD high estimate	$93.9 million (12%)	$713.8 million (88%)
2021
OECD moderate estimate	$293.9 million (42%)	$400.7 million (58%)
OECD high estimate	$293.9 million (26%)	$841.7 million (74%)

Biologic medicine	Total Canadian sales for the medicine, 2018	Estimated actual savings,* 2018	Potential savings, 2018		Projected savings, 2021 (forecasted)
			OECD moderate estimate	OECD high estimate	Canadian status quo	OECD moderate estimate	OECD high estimate
Infliximab	$1,122.8M	$55.2M	$287.8M	$588.0M	$212.7M	$568.6M	$834.8M
Etanercept	$308.6M	$11.4M	$31.0M	$86.2M	$31.5M	$78.8M	$131.1M
Insulin glargine	$285.4M	$5.5M	$7.4M	$35.4M	$18.7M	$17.1M	$56.9M
Filgrastim	$132.6M	$21.8M	$19.4M	$98.1M	$31.2M	$30.2M	$112.9M
Savings		$93.9M	$345.6M	$807.7M	$293.9M	$694.7M	$1,135.7M
Canadian vs Potential (%)			27.2%	11.6%		42.3%	25.9%

* Assuming that the total use of each medicine remained the same and that the price of the reference medicine did not drop after the launch of the biosimilar.

5. New biosimilars entering the Canadian market present an opportunity for significant future savings

Three new biosimilar medicines were launched in Canada in 2019 and three more are expected by the end of 2020.

Their forecasted savings in 2023 were generated for the following scenarios:

1. Canadian estimate: Assumes that the Canadian price of the originator biologic is discounted by the average Canadian biosimilar discount (30.05%) unless a publically available price is available.
2. OECD moderate estimate: Assumes that the OECD median uptake is combined with the Canadian prices used in scenario 1.
3. OECD high estimate: Assumes that the median uptake in the top four OECD countries is combined with the OECD median price. If no OECD biosimilar price was available, the OECD median prices were discounted by the OECD average biosimilar discount of 29.51%.

Five of the new drugs have indications for acute diseases or cancer. Their rate of uptake is modelled after the indexed uptake of the filgrastim biosimilar (illustrated in section 2), which has a higher market share in Canada than in the OECD. The new insulin drug is expected to follow a similar trend as insulin glargine. Total molecule use was projected based on the Canadian use of the reference biologic.

The Canadian scenario estimates a total savings of $222 million for the six medicines in 2023. These potential savings double under the OECD high estimate scenario.

Estimated potential savings of new biosimilars in 2023, Canada