Tesh Khullar: Community Oncologists Need to Understand Impact of Biosimilars on Their Business

Biosimilars for core therapeutics in cancer are starting to come out, and community oncologists need to understand what that means for their business, as well as what proposed policy changes could mean for reimbursement, explained Tesh Khullar, senior vice president of provider solutions at Flatiron Health.

What potential changes should community oncologists keep an eye on that might affect their business?

So biosimilars are coming out. In fact, the first biosimilar in a core therapeutic just got approved and it’s Avastin. And before this we’ve only seen biosimilars in supportive care. It’s easier for an oncologist to make the jump of, ‘Hey, it’s not core chemo, I’m going to be using a biosimilar as a supportive care, and using a, let’s say, Zarxio instead of a Neupogen,’ but now they’ve got to make that same jump from a core chemotherapy drug like Avastin, which is a monoclonal antibody, it’s a lot more difficult to recreate. But the argument, on the biosimilar front, it’s going to be interesting to see how this all pans out. What is Amgen going to do around contracting with the oncology practices, trying to create differential against the incumbent, which is Genentech. It’s going to be really interesting to see what happens.

There’s a public policy decision that the comment period, unfortunately, already ended, but they’re trying to link the j-code associated with all the biosimilars. So, biosimilar Teva will have the same j-code as biosimilar Dr. Reddy, which will have the same as the biosimilar that Amgen makes. The issue with that is it’s going to lead to ASP [average sales price] dropping faster and from an economic standpoint, you won’t have the financial benefit anymore. Maybe that’s ok in a value-based care world, I just don’t think we’re there yet, and the government should understand as long as fee-for-service still exists and the core reimbursement mechanism of ASP still exists, they shouldn’t just delink and learn from biosimilars. They should treat it like the generic it’s probably closer to, like the European Union does, and then let community oncology unfold and understand the economics from that perspective.

I know the American Medical Association is already wrote a letter against this; pharma has commented on it as well. But it will be interesting to see; legislation like that around key things that affect the business need to be understood by community oncology.