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Biosimilar Cost Savings With “Skinny Labeling”

The Medicare system saved $1.5 billion in costs for just 5 biosimilars with “skinny labels,” a study shows. Skinny-label biosimilars are those with FDA approval for some but not all of the indications listed in labeling for the originator product, enabling earlier competition in the marketplace.

The study focused on 21 biosimilars approved in 2015 through 2021 and marketed before 2022. For these, 13 products were launched with skinny labels that were linked to 8 biologics. “For 5 of these 8 biologics, the first-to-market biosimilar had a skinny label, leading to a median (IQR) of 2.5 (2.1-3.5) years of earlier competition through 2021,” the investigators report. “Beyond 2021, skinny labeling could lead to earlier competition for 6 of 11 biologics by a median (IQR) of 5.8 (4.5-7.5) years until expiration of regulatory exclusivities (principally from the Orphan Drug Act) and a median (IQR) of 8.2 ( 6.9-8.9) years until expiration of patents.

“Competition from skinny-label biosimilars was estimated to save Medicare $1.5 billion from 2015 to 2020, which is 4.9% of the $30.2 billion Medicare spent on the 5 biologics during the period. In the sensitivity analysis with biologic use and price held constant, the estimated savings were $925 million.”

Editorial: “Recent court rulings have threatened the skinny label drug approval pathway,” editorialists write. “For both biosimilars and generic drugs, the use of skinny labels is an important strategy to increase the affordability and accessibility of medications. The legal uncertainties are likely to continue, as manufacturers pursue novel and complex strategies to protect the patents and regulatory exclusivities of brand-name drugs and biologics. The path forward is for Congress to enact additional legislation that reaffirms and strengthens the permissibility of skinny labeling.”

Source: JAMA Internal Medicine