Biosimilars:

Employer Opportunities

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Understanding Biosimilars

BIOLOGICSSMALL-MOLECULE DRUG

mAb ~150,000 Da

Growth hormone ~22,100 Da

Insulin~5,800 Da

Acetylsalicylic acid180 Da

BIOSIMILARS: Highly similar structure to reference biologic GENERICS: Same structure as reference drug

INCREASING COMPLEXITY

Key: Da – dalton, 1 atomic mass unit; mAb – monoclonal antibody.

Comparison of Size and Complexity of Small-Molecule Drugs and Biologics5-9

There are fundamental differences in the complexity and development of biosimilars compared to small-molecule generic drugs

A BIOSIMILAR IS A BIOLOGIC THAT IS CLINICALLY SIMILAR IN ITS SAFETY AND EFFICACY, AND IS APPROVED BASED ON A COMPARISON TO AN APPROVED REFERENCE PRODUCT.1

• Biosimilars are not “generics”—they are biologics that are highly similar to, and have no clinically meaningful differences from, the FDA-approved reference products.2

• By contrast, generics are drugs that are chemically and therapeutically equivalent to the branded, originator small-molecule drugs.3

• Compared to small-molecule drugs, including generic medicines, biosimilars are large-molecule drugs that are far more structurally complex.4

BIOSIMILARS OVERVIEW

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Biosimilar Development/Approval Process

Reference Product Development vs Biosimilar Development10

Key: PK/PD – pharmacokinetics/pharmacodynamics.

Due to the FDA’s reliance on previous findings of safety and effectiveness for the reference product, a biosimilar may have a shorter

and less costly development program.

USA FDA APPROVAL PATHWAY FOR BIOSIMILARS

• The goal of a biosimilar development program is not to re-establish the safety and efficacy of the reference product, but to demonstrate that the proposed biologic product is biosimilar to the reference product.10,11

• While a biosimilar may require more analytical characterization and nonclinical studies than its reference product, it may need fewer clinical trials and pharmacology studies to obtain FDA approval.10

• The pathway for FDA approval of biosimilars was specifically established by Congress not to mirror the generic drug route.

Clinical Studies(Safety, efficacy, immunogenicity)

Clinical Pharmacology(PK/PD)

Nonclinical Studies

Analytical Characterization(Structure and function assessment)

Reference Product Development Demonstrate safety, purity, and potency

Biosimilar Development Demonstrate biosimilarity to the reference product

BIOSIMILARS OVERVIEW

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Biosimilars lower spending by offering a potentially lower-cost treatment option and can help improve patient outcomes by providing additional treatment options. Competition fostered by the introduction of biosimilars can also lead to savings that can be redeployed toward spending on new, innovative therapies.

Biosimilars offer potential benefits to every stakeholder in the healthcare system

Biosimilars: Marketplace CompetitionCreates Meaningful Benefits and Savings

Biosimilar development costs ($100–$200 million) are significantly lower than developing new drugs and biologics (estimated at $2.6 billion).12,13

Introduction of competition from biosimilars generates downward pressure on reference product prices—leading to potentially even greater spending reductions.14

A 2016 report from IMS Health noted that biosimilars enable stakeholders—including payers, physicians, and patients—to benefit from increased choice in therapeutic options.15

The RAND Corporation, a nonprofit, nonpartisan research organization, estimated in 2014 that biosimilars would reduce direct spending on biological drugs by $54 billion from 2017 to 2026, or about 3% of total estimated biological spending over the same period, with a range of $24 billion to $150 billion.16

A BC

“Biosimilars will create long-term cost savings and efficiencies, and free up resources for other important aspects of cancer care. In doing so, biosimilars could expand cost-effective

care to millions more patients—a much-needed step in reducing spending.”17

– U.S. News & World Report April 24, 2018

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Employers are challenged to provide affordable access to innovative healthcare solutions while maintaining a profitable business.

Rising healthcare costs are unsustainable

Biosimilars: Marketplace CompetitionCreates Meaningful Benefits and Savings

Biosimilars: Opportunities for Employers

Greater biosimilar market penetration could help to increase competition and lower costs without compromising quality, efficacy, or patient safety.

72% of employers surveyed listed the cost of specialty biologics as important to managing overall pharmacy spending.18

A 2018 study by the Pacific Research Institute found that if biosimilars can reach 50% of the market for a popular biologic, the annual cost reductions for employer-sponsored health plans could be as high as 8.4%, or between $262 million and $315 million in annual cost savings, depending on the actual average mark-up percentage.20

The National Alliance of Healthcare Purchaser Coalitions provided steps for employers to “influence change that will ultimately lead to more options for employees and their dependents who are dealing with diseases like cancer, rheumatoid arthritis, inflammatory bowel disease, diabetes, multiple sclerosis, kidney disease, and severe psoriasis.”21

Review specialty pharmacy benefit

design to ensure that it supports appropriate

use and access

Educate all employees about the value of

biosimilars to enable more informed

decision making

Quantify the biosimilar opportunity by initiating

conversations with vendors about fill rates and savings potential

Partner with vendors to determine how best

to drive appropriate promotion, adoption, and utilization of biosimilars

The average healthcare cost per employee continues to rise and is projected to be ~ $15,000 in 201918

Average cost of providing healthcare as a percentage of a company’s annual operating budget19 5.2%

Ensure biosimilars bring value to your business and employees

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Nearly four decades of biotechnology

Amgen was incorporated in 1980 and has always been “Science Based.” Built on the advances in molecular biology and genetic science, Amgen was one of the early pioneers of biotechnology.

Since its earliest days, Amgen has worked to develop novel therapies for patients with serious illnesses. Our scientists have characterized key biologic processes that have led to the development of innovative, first-in-class therapies.22

Reliably supplying biologics to EVERY PATIENT, EVERY TIME

According to the American Society of Health System Pharmacists (ASHP), from 2007 to 2017, Amgen was one of only two U.S. companies with zero drug shortages.23

Despite Hurricane Maria’s devastating impact on Puerto Rico, the home of one of Amgen’s largest manufacturing facilities, Amgen experienced no product shortages worldwide.23,24

Our robust biosimilars portfolio will serve many future patients. It includes 10 biosimilar medicines, including therapies for oncology and chronic inflammatory diseases.*

Total number of Drug Shortages by

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0 0 1 2 7 9 11 12 2463 68 72

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483

Amgen Heritage Commitment

*Assets may include indications across multiple therapeutic areas.23

Amgen Biosimilars - Experience that can’t be replicated

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*Resources include referrals to independent nonprofit patient assistance programs. Eligibility for resources provided by independent nonprofit patient assistance programs is based on the nonprofits’ criteria. Amgen has no control over these programs and provides referrals as a courtesy only.

Developing and manufacturing biologics for patients worldwide

Amgen supplies the world with some of the most widely used biologic medicines.25

All of Amgen’s biologics are developed and produced by Amgen scientists, at Amgen sites, following Amgen standards.

Amgen currently has 13 innovative biologics approved across 6 therapeutic areas in the US…26 …and has 10 biosimilars and 18 innovative biologics either approved/under review by the FDA or in various stages of clinical trials.27

Amgen resources and support programs will be available to patients treated with biosimilars

IN-OFFICE BILLING AND CODING SUPPORT

CO-PAY AND REIMBURSEMENT RESOURCES*

BENEFITS VERIFICATION FOR AMGEN PATIENTS

Expertise Support

Amgen Biosimilars - Experience that can’t be replicated

Amgen Inc. One Amgen Center Drive Thousand Oaks, CA 91320-1799 www.amgen.com

© 2019 Amgen Inc. All rights reserved. USA-BIO-80266 05/19 www.AmgenEmployerResources.com

1. US Food and Drug Administration. What is a Biosimilar? https://www.fda.gov/downloads/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApproved/ApprovalApplications/TherapeuticBiologicApplications/Biosimilars/UCM585738.pdf. Accessed April 19, 2019. 2. US Food and Drug Administration. Biosimilars and interchangeable products. https://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApproved/ApprovalApplications/TherapeuticBiologicApplications/Biosimilars/ucm580419.htm. Accessed 19, 2019. 3. Dukes MNG, Haaijer-Ruskamp FM, Joncheere CP, et al. Experiences with generics. In: Drugs and Money - Prices, Affordability and Cost Containment. Burke, VA: IOS Press Inc.;2003:101-110. 4. American Cancer Society Cancer Action Network. Understanding biologic medicines from the cancer patient perspective. https://secure.fightcancer.org/site/DocServer/ACSCAN-Biosimilars-Primer.pdf. Accessed April 19, 2019. 5. Camacho LH, Frost CP, Abella E, et al. Biosimilars 101: considerations for U.S. oncologists in clinical practice. Cancer Med. 2014;3(4):889-899. 6. Aspirin. Mississauga, Ontario, Canada: Bayer In, Consumer Care; 2005. 7. Humalog [package insert]. Indianapolis, IN: Eli Lilly & Co; 2018. 8. Humatrope [package insert]. Indianapolis, IN: Eli Lilly & Co; 2016. 9. Taltz [package insert]. Indianapolis, IN: Eli Lilly & Co; May 2018. 10. Dougherty MK, Zineh I, Christl L. Perspectives on the current state of the biosimilar regulatory pathway in the United States. Clin Pharmacol Ther. 2018; 103(1):36-38. 11. US Food and Drug Administration. Scientific considerations in demonstrating biosimilarity to a reference product: guidance for industry. https://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM291128.pdf. Accessed April 19, 2019. 12. Dolinar RO. Biosimilars are not generics. Healio Endocrine Today. https://www.healio.com/endocrinology/practice-management/news/print/endocrine-today/%7Bfd6accbd-a927-467b-ba5e-4f8796327816%7D/biosimilars-are-not-generics. Accessed April 19, 2019. 13. Federal Trade Commission. Emerging health care issues: follow-on biologic drug competition. http://www.ftc.gov/os/2009/06/P083901biologicsreport.pdf. Accessed April 19, 2019. 14. Morton FS, Boller LT. Enabling Competition in Pharmaceutical Markets. Hutchins Center Working Paper. 2017;30:1-53. 15. IMS Institute for Healthcare Informatics. Delivering on the potential of biosimilar medicines: the role of functioning competitive markets. https://www.medicinesforeurope.com/wp-content/uploads/2016/03/IMS-Institute- Biosimilar-Report-March-2016-FINAL.pdf. Accessed April 19, 2019. 16. Mulcahy AW, Hlavka JP, Case SR. Biosimilar cost savings in the United States: initial experience and future potential. RAND Health Q. 2018;7(4):3. 17. Reed JM. We can expand cancer patients’ care. U.S. News and World Report. https://www.usnews.com/news/ healthcare-of-tomorrow/articles/2018-04-24/commentary-how-we-can-do-more-now-to-expand-care-for-cancer-patients. Accessed April 2019. 18. National Business Group on Health. Press release. https://www.businessgrouphealth.org/news/nbgh-news/press-releases/press-release-details/?ID=348. Accessed April 19, 2019. 19. Society for Human Resource Management. 2017 healthcare benchmarking report. https://www.shrm.org/hr-today/trends-and-forecasting/research-and-surveys/Documents/2017-Health-Care-Benchmarking.pdf. Accessed April 19, 2019. 20. Winegarden W. Impediments to a stronger biosimilars market: an infliximab case study. Pacific Research Institute.2018;1:1-28. 21. National Alliance of Healthcare Purchaser Coalitions. The value of biosimilars: improving treatment access and lowering costs. Action brief. https://higherlogicdownload.s3.amazonaws.com/NAHPC/3d988744-80e1-414b-8881-aa2c98621788/UploadedImages/The_Value_of_Biosimilars.pdf. Accessed April 19, 2019. 22. Amgen. Quick Facts. https://www.amgen.com/about/quick-facts/. Accessed April 19, 2019. 23. Data on File, Amgen; 2019. 24. FDA. Drug Shortages. https://www.accessdata.fda.gov/scripts/drugshortages/default.cfm. Accessed April 19, 2019. 25. Statista: The Statistics Portal. Top 10 prescription drugs based on U.S. market share in 2016 (in billion U.S. dollars). https://www.statista.com/statistics/658550/top-branded-drugs-based-on-market-share-inthe-us/. Accessed April 19, 2019. 26. Amgen. Products. https://www.amgen.com/products/. Accessed April 19, 2019. 27. Amgen. Pipeline. https://www.amgenpipeline.com/pipeline/. Accessed April 19, 2019.

Biosimilars offer potential benefits to every stakeholder in the healthcare systemBiosimilars are not “generics”—they are biologics that are highly similar to, and have no clinically meaningful differences from, the FDA-approved reference products.2 For multiple reasons, biosimilars may offer potentially lower-cost treatment options that can help improve patient outcomes by providing additional treatment options.

Amgen Biosimilars: Experience that can’t be replicatedFor the last four decades, Amgen has been at the forefront of developing high-quality biologics for patients. Amgen biosimilars are developed and manufactured to the same high standard as our innovative biologics.

Ensure biosimilars bring value to your business and employees:

• Speak to vendors about biosimilar fill rates and savings potential

• Partner with vendors to drive biosimilars appropriate use

• Review your pharmacy benefits to ensure they support biosimilar use

• Help employees make informed decisions about biosimilars