Biosimilars: Safe, effective treatment options that lower the cost of prescription drugs

Reducing the high cost of prescriptions that both employers and employees pay at the pharmacy is no easy task. Demographic changes and the increase of available pharmaceutical solutions is driving up prices. However, the use of generic and so-called biosimilar drugs can help. While generics use identical ingredients to their FDA-approved brand-name cousins, biosimilars, while not using identical ingredients, have been shown to work the same in the body.

A report from McKinsey & Co, entitled “An Inflection Point for Biosimilars,” says global sales topped $15 billion in 2020, representing a compound annual growth rate of 56% since 2015. They further state that the market is set to continue its double-digit growth, doubling in size to more than $30 billion by 2025, and over $60 billion by the end of the decade,

To support plan sponsors in adopting biosimilars into their health and pharmacy benefit plans, the National Alliance of Healthcare Purchaser Coalitions (National Alliance) developed and released an employer playbook.

The Employer Playbook on Biosimilars was developed to help employers navigate the challenges of managing these drugs in their benefit plans and structure their pharmacy benefit programs to best address misaligned incentives and/or anti-competitive business practices. The resource provides practical strategies to help purchasers understand innovative and emerging treatments and support discussions with plans and other vendor partners for plan and formulary design, drug pricing and rebates, drug access and accessibility, and site of care and drug administration.

Related: Bringing pharmacy costs into the light: Transparency is key to capping costs

“If properly managed, biosimilars can help employers save millions while increasing patient access,” said Margaret Rehayem, vice president at National Alliance. “As the use of these drugs continues to expand in the US, we’ve been working with coalitions and employers to develop strategies to help drive acceptance and appropriately push back on health plans and pharmacy benefit managers that are not transparent or have misaligned incentives.”

The National Alliance recommends drug management strategies for employers include:

• Request broker or pharmacy consultant provide an update on drug pipelines and launches to determine if market releases will impact prescriptions and prices
• Consider adopting a custom formulary design or use a phased-in approach, one that is not rebate-driven
• Add biosimilars on formulary once they are launched; require all new biosimilar releases be placed in the generic tier to increase adoption
• Request pharmacy benefit managers (PBMs) share formulary strategy to support overall workforce needs (especially those with limited access or equity challenges)
• Do not be lured into 340B pricing plans; ensure the lowest net cost – without rebates – or consider a phased approach
• When multiple biosimilars are available, offer incentives for the use of all biosimilars in the same drug class over the reference product
• Carve out specialty drugs and/or biosimilars with a specialty PBM or pharmacy if that option provides better outcomes

The National Alliance also says employers have been misled to believe biosimilar adoption will lead to branded product losses in rebates and cause biosimilar cost to increase. However, as patent protections expire for drugs like the rheumatoid arthritis injectable Humira after 20 years and $200 billion in revenue, employers need to push for credits, incentives, discounts and/or rebates from biosimilar companies to be passed on to the employer or the patient.

“Companies are spending more on employees’ health insurance than ever before, and biosimilars are safe and effective treatment options to lower the cost of prescription drugs if they are accessible to the patients that need them,” said Juliana M. Reed, executive director of the Biosimilars Forum. “We urge employers to implement recommendations from this playbook and work with their PBMs to ensure their employees have access to lower-cost biosimilars and are educated about them.”