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    Are payers optimistic about biosimilars’ savings?

    In 2010, Congress approved the Biologics Price Competition and Innovation Act (BPCIA), creating an abbreviated licensure pathway for biological products that are demonstrated to be “biosimilar” to or “interchangeable” with a previously approved biological product. The new pathway is predicted to be a multi-billion-dollar opportunity to change the biopharma industry and offer promising biologic treatments to more people at lower costs, according to APCO Worldwide.

    A biosimilar product is a biological product that is approved based on demonstration that it is highly similar to an FDA-approved biological product, known as a reference product, and has no clinically meaningful differences in terms of safety and effectiveness from the reference product. In order to be deemed an interchangeable biological product, a biosimilar must meet additional standards, and may be substituted for the reference product by a pharmacist without the intervention of the prescribing healthcare provider.

    The FDA recently approved Amgen’s Amjevita (adalimumab-atto), a biosimilar to AbbVie’s Humira (adalimumab) for multiple inflammatory diseases, such as rheumatoid arthritis, Crohn’s disease, plaque psoriasis and other conditions.

    Amjevita is the fourth drug approved by the FDA’s biosimilar pathway. The first biosimilar drug approved by the FDA in March 2015 was Zarxio (filgrastim-sndz, Sandoz, a Norvartis Company), a biosimilar of Amgen’s Neupogen (filgrastim). This year the FDA has also approved Celltrion’s Inflectra (infliximab-dyyb), a biosimlar version of Janssen Biotech’s Remicade (infliximab) as well as Erelzi (etanercept-szzs, Sandoz), a biosimilar of Amgen’s Enbrel (etanercept).

    Biosimilar strategy: Plans, PBMs

    With an increased focus on the future of biosimilars, it is important to discuss how insurance plans and pharmacy benefit managers (PBMs) plan to deal with these newly approved drugs.

    GinestroGinestro“Pharmacy benefit managers and other payers have been eager to see biosimilars for at least eight years,” says Mark Ginestro, a principal from KPMG Strategy. “Payers and PBMs see this channel as a means to constrain some of that spending growth, especially with medications that have a large number of patients, such as treatments for cancer, rheumatoid arthritis, or multiple sclerosis.”

    According to Nadina Rosier, Health and Group Benefits Practice Leader at Willis Towers Watson, plans and PBMs have been developing strategies to manage biosimilars and specialty drugs overall given the relative high cost of these products.

    “Biosimilars are not the same as generic specialty drugs, so strategies that ‘auto-substitute’ in similar ways to how generics substitute for traditional drugs are not appropriate,” says Rosier. “Instead, many PBMs have indicated they are considering formulary approaches that are similar to how traditional and specialty drugs are managed today.”

    As an example, Rosier explains that placing biosimilars into preferred and non-preferred tiers and exploring exclusion in some cases, has been a popular approach employed by PBMs. This allows employers to manage costs and serves to maximize any pharmaceutical manufacturer rebates that may be available to plan sponsors.

    In conjunction with formulary tiering, Rosier explains that utilization management approaches such as prior authorizations and step therapy are also being used to ensure clinically appropriate use of various types of drugs.

    “PBMs and payers are optimistic about biosimilars savings; we expect all to create a strategy to encourage biosimilars, with some being more aggressive than others,” says Valerie Reynolds, senior director at ADVI Health. “Strategies will depend on the market served and the savings offered by both reference manufacturers and biosimilar manufacturers.”

    Next: How plans and PBMs view biosimilars

     

    Erin Bastick
    Erin Bastick is a PharmD Candidate 2016, Ohio Northern University, Ada, Ohio, and an inpatient intern at University Hospitals, Cleveland.

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