More than 10 biosimilars to Humira were launched in 2023, expanding lower-cost options within the targeted immunomodulators (TIMs) category.

However, uptake of these lower-priced alternatives has been slower than expected, largely due to complex rebating strategies and misaligned incentives within the industry.

This delay in adoption can be a missed opportunity to help reduce costs for plans and patients, and I'll explain some of the challenges and opportunities to expand the use of these effective, cost-saving biosimilar drugs.

A Complex Pricing Landscape

One challenge to biosimilar adoption and true value creation for the industry is the complex pricing structures we are seeing.

In these, we see some manufacturers offering the same medication at two different price points — a higher cost with substantial rebates, and a lower cost without rebates.

This dual approach aims to cater to varied incentives within the industry.

By doing so, it creates confusion and can impact the cost a patient pays at the pharmacy counter.

For example:

• A PBM that retains a portion of rebates will be incentivized to recommend that a high-cost, high-rebate product be placed on the formulary.  
• In this scenario, the plan sponsor will receive some of that rebate value as well, so the sponsor could feel an incentive to do so.
• However, for a member in a coinsurance plan or high-deductible plan, where the out-of-pocket expense could be up to the full cost of the drug, a high-cost product results in a large out-of-pocket payment for the member. 

Cost can impact patient access, so product pricing is an important consideration for plan sponsors when assessing what biosimilar product(s) to pursue.

An Evolving Sourcing Model

Another emerging trend that's preventing the market from realizing the savings possible through biosimilar adoption is the increase in PBM "private label" manufacturing of biosimilars.

Companies like Cordavis, Nuvaila and Quallent are owned and operated by major PBMs, including Caremark, OptumRx and Express Scripts.

These companies have partnered with manufacturers to secure product and re-sell through the PBM specialty pharmacy.

Related: Alternative PBM models: 4 proven strategies to reduce drug spend

In a scenario where a plan sponsor's benefit design allows members to access these as "$0 copay" products, the price for the plan may reflect a projected markup of 1,000% or more compared to what the private-label manufacturer purchased it for.

This adds another opaque layer within vertical integration. That adds costs, reduces competition and adds a new barrier for plans wanting to truly access low-cost biosimilars.

Ensuring Clinical Value With Biosimilars

For plan sponsors, a primary goal beyond controlling costs is making sure members are cared for.

Patients taking biologics and biosimilars are managing complex conditions that require careful management.

Specialty pharmacies play a crucial role here, ensuring proper handling of these temperature-sensitive products, providing patient education, and offering ongoing support throughout the treatment process.

Managed care pharmacists need to work in the background to help plan sponsors understand this long-term value proposition.

Placing biosimilars on the formulary and helping patients transition therapy resulted in at least a 20% reduction in TIMs drug costs for Navitus clients, as reported in our annual Drug Trend Report.