The drug landscape is changing… Say hello to subsequent entry biologics

December 22, 2016

Amazing. This is certainly an accurate depiction of biologics. On the one hand, biologics are amazing because they represent a new class of drugs that has the potential to improve the lives of patients suffering from a number of serious conditions. However, on the other hand, most biologics are also amazingly costly.

Fortunately, the drug landscape just got brighter as a small number of subsequent entry biologics (SEBs) have entered the Canadian market with numerous more on the horizon. Also known as “biosimilar” and “follow-on biologics,” SEBs have the potential to deliver the same amazing health outcomes as biologics, but at significantly lower costs.

Although SEBs represent a good news story, even positive change can seem daunting so here’s an overview of today’s drug landscape in relation to SEBs…

Pharmaceutical industry trends 

The development of drugs for treating rare disease has been rising steadily. Increasingly these breakthroughs are possible due to the development of the class of drugs called biologics. And now we’re also seeing biologics for more common health conditions like high cholesterol and asthma. For instance, new PCSK9 inhibitor drugs can now lower cholesterol by as much as 70%.1 And there are numerous other impactful biologics in the pipeline.

However, as we also know, the unique nature and high effectiveness of biologics comes at a cost—a very high cost. This presents a particularly challenging situation for plan sponsors as they strive to provide plan members with the best treatment options that advances in medicine can provide, while at the same time effectively managing plan costs now—and into a much more expensive future. 


Although over the next decade, biologics are expected to represent upward of 20%2 of the pharmaceutical market, which in turn, will put financial pressure on plans, relief is on the horizon in the form of SEBs. As we see various biologics come off patent, we will also see more SEBs entering the market. In Canada, by 2020, numerous patents3 will expire and several global pharmaceutical manufacturers are in process of developing, or see this as an opportunity to develop further SEBs.

So what does this really mean in terms of cost containment? The complexity of developing, manufacturing, and testing biologics, as well as intensive regulatory requirements mean that the percentage price difference between an SEB and its biologic originator will not be as substantial as the price difference between a generic and its brand-name counterpart. However, experts still predict significant savings based on the experience in some European countries where SEBs can cost significantly less than originator products. So far, in the Canadian market SEBs are resulting in major savings. For example, the SEB Infectra costs 47%4 less than its originator biologic Remicade. And a recent addition to the Canadian market, the SEB Brenzys, costs 25%5 less than its originator biologic, Enbrel. The average annual cost for originator biologics ranges from about $1,500 for Lantus to as much as $20,000 to $30,000 for drugs like Enbrel and Remicade. Given that the annual cost of biologics across an employee group could run into the hundreds of thousands of dollars, the savings realized by SEBs are absolutely vital to health benefits plans.6

More SEBs in the Canadian market means equally effective drug treatment options for your plan members and lower costs for your plan—so far, so good.


European Union (EU) adoption of SEBs is much further along than in North America; however, the rate and degree of that adoption varies across EU countries. Experts think that this is due to a number of variables, such as differences in local reimbursement policies and pricing. In addition, physicians may be reluctant to prescribe SEBs due to lack of awareness and education regarding SEBs overall—and in particular regarding SEBs’ safety in relation to their originator biologics. Although SEBs are approved to the same standards as their originator biologics, worries persist among some.

This points to the need for more education. Fortunately, these days it’s a small world, so physician education is occurring across borders. Physicians in North America are gaining insight into SEBs through the European experience. As a result, North American physicians may be more familiar with SEBs than European physicians were before SEBs were launched in Europe.

In addition, as always, physician education and awareness will rely heavily on the scientific evidence. The evidence is clear that an SEB is not identical to its originator biologic; it is not a “generic biologic.” Manufacturers of the innovator drug are not required to share their original formula, so it is difficult to produce an identical replica of the innovator drug.

However, in fact, even the formulation of the originator biologic changes multiple times over its lifespan essentially creating a slightly different drug each time. Known as “product drift,” this happens as a new batch of a biologic is formulated and adjustments are made to its manufacturing. These adjustments are made within certain limits and are not significant enough to warrant re-testing of the biologic. As a result, an originator biologic product manufactured today will naturally differ from the same originator product produced by the same manufacturer several years ago. It is accepted that when it comes to biologic and SEB drugs, variation is simply part and parcel of the production process, but that ultimately the therapeutic effect must remain constant.

As a result, similar to a SEB being “close but not identical to” the originator biologic, likewise an originator biologic and new, new batches of that same biologic may become less—or more—similar over time.

Accordingly, physician prescribing will also look to regulators for direction. For example, Health Canada’s current position: “Health Canada does not support automatic substitution of a Subsequent Entry Biologic for its reference biologic drug and recommends that physicians make only well-informed decisions regarding therapeutic interchange.”8

In addition to alleviating safety concerns, another impetus for physician subscribing will be reimbursement policies that encourage the use of SEBs. 

Reimbursement policies

In the public and private payor world, reluctance to assign preferred status to SEBs in plan designs (reimbursing to the price of the SEB, not the originator product), represents a barrier to SEB prescribing, and in turn, a deterrent to establishing a viable market for SEBs in Canada—one that is desperately needed. As long as coverage for the original biologic exists on drug plans, physicians are less likely in the near term to change their prescribing practices, thus impacting the viability of the SEB market and the potential savings that can be gained.

he principles state that: “Consistent with its mandate that includes increasing patient access to clinically and cost-effective drug treatment options, the pCPA will encourage a competitive environment that includes SEB market growth and is conducive to long-term cost reductions and sustainability for public drug plans.”11 Acting as a central and dominant hub, the pCPA is providing a framework for adoption by the other provincial plans. An example is Infectra, which was negotiated by the pCPA and is now available on various public plans across Canada at 47% of the price of Remicade.

So will private plans follow suit? Instead of supporting the adoption of SEBs, some carriers have engaged in deals—known as product listing agreements—with the originator biologic manufacturers as a way to offer originator biologics at a discount to plan sponsors.

GSC believes that these deals represent a case of short-term thinking. Although product listing agreements bring down the cost of a biologic today, so some gains—these gains have long-term consequences because a lack of preferential coverage for SEBs means that SEBs may not reach the adoption levels necessary to establish a viable SEB market in Canada. Of course, without a viable market, manufacturers may not see enough incentive to bring future SEBs to market in Canada.

Preferential placement of SEBs on formularies provides a triple bonus: (1) it delivers maximum transparent savings directly to plan sponsors, (2) it provides plan members with additional treatment options, and (3) it helps grow and establish the market for SEBs in Canada.

GSC is one of the first major insurance carriers in Canada to list the SEB Infectra as a preferred product for plan members newly prescribed the anti-inflammatory drug Remicade. Our very own, GSC pharmacy strategy leader, Ned Pojskic, was recently quoted as he explained the GSC decision: “Our first principle is always plan member safety, and we are embracing SEBs as a whole as a valuable addition to the marketplace.”12 As always, we looked to the scientific evidence that clearly demonstrates the comparable safety and efficacy of Infectra compared to Remicade.

It all comes down to change management

Will we see more access to SEBs or less? Although SEBs represent opportunity knock, knock, knocking, Canada is a relatively small market, so for SEBs manufacturers to see the value of bringing these products to Canada, SEBs will need to be readily and steadily adopted. Ultimately, if we want more access to SEBs, we need to effectively manage change. Whether we realize these benefits will, to a large part, depend on our willingness to adopt reimbursement policies that promote their use. As they say, “If you change nothing, nothing will change.”


1 PCSK9 Inhibitors for LDL Cholesterol Reduction: Emerging Clinical Perspectives, Consultant Volume 56 – Issue 4, B. Alan Bottenberg, Michael J. Bloch, April 8, 2016. Retrieved November 2016:

2, 3 Subsequent Entry Biologics—Emerging Trends in Regulatory and Health Technology Assessment Frameworks, CADTH – Reports, Issue 43, January 9, 2014. Retrieved November 2016:

4,5,6, GSC data and Market Intelligence Report, 1st Edition: Biologic Response Modifier Agents, 2015 Patented Medicine Prices Review Board, October 2015. Retrieved November 2016:

7, 12 Five things you need to know about biosimilars, Benefits Canada Special Report, Karen Welds, December 7, 2015. Retrieved November 2016:

8 Questions & Answers To Accompany the Final Guidance for Sponsors: Information and Submission Requirements for Subsequent Entry Biologics (SEBs), Health Canada, Drugs and Health Products – Question #15. Retrieved November 2016:

9 Biosimilar Infliximab (CT-P13) Is Not Inferior to Originator Infliximab: Results from a 52-Week Randomized Switch Trial in Norway, American College of Rheumatology, Abstract Number 19L. Retrieved November 2016:

10 The Danish nationwide clinical register for patients with rheumatoid arthritis: DANBIO, US National Library of Medicine National Institutes of Health, Else Helene Ibfelt, Dorte Vendelbo Jensen, and Merete Lund Hetland, October 25, 2016. Retrieved November 2016: Inflammatory Arthritis Stable After Switch to Biosimilar, Medscape,Pam Harrison, June 13, 2016. Retrieved November 2016: and DANBIO—powerful research database and electronic patient record, Rheumatology, Merete Lund Hetland, April 14, 2010. Retrieved November 2016:

11 Subsequent Entry Biologics (SEBs) First Principles, pan-Canadian Pharmaceutical Alliance, April 1, 2016. Retrieved November 2016: