Pharmacist: Biosimilar Adoption Impacts Patients and Plans in 2024

By Team PCM | Nov 27, 2023 | Blog post, Pharmacy Benefits, Plan Management

Is 2024 going to be the year of biosimilars? Recently, biosimilars have emerged as a transformative force in the healthcare industry, offering cost-effective alternatives to expensive biologic drugs. As drug prices continue to rise, biosimilars could be the key to helping patients receive more affordable care. 

There are currently 44 biosimilars approved by the U.S. Food and Drug Administration, with the approval trends rising as manufacturers try to get ahead of the curve. For example, adalimumab, a biologic used to treat arthritis, already has 15 biosimilars in development. In 2022 alone, biosimilars saved $9.4B, allowing 344 million people to receive therapy otherwise unavailable without biosimilar competition. 

Dr. David Merritt, PharmD, RPh, Chief Pharmacist for Prescription Care Management, explains, “Biosimilars can provide patients with lower cost alternatives, making treatments more affordable and accessible without compromising quality of care.”

Biosimilars affect patients and may lead to lower health costs for self-insured health plans. Because biosimilars are much more cost-effective than their brand-name counterparts, patient adherence could improve, lowering plan pharmacy spend and expenses associated with hospitalizations and follow-up care for chronic conditions. 

What are the prospects for biosimilar adoption? 

According to Cardinal Health, by 2025, biosimilars will reduce U.S. drug spending by $133B. However, the complexity of the market impedes consistent adoption. A lack of familiarity with biosimilars could cause providers and patients more comfortable with traditional drugs to hesitate to accept biosimilars as viable alternatives.  

“Biosimilars have been proven as safe and effective as the originator biologic and are offered at a reduced price,” explains Dr. Merritt, “However, demand for the product has been slow to shift from the original biologic, especially when clinicians and patients do not regard the products as clinically equivalent even though they have been proven safe and effective.”

Open policies and better education are important in overcoming this hurdle.

“Promoting policies that will simplify the ability of health plans to switch a sufficient share of patients to biosimilars would increase adoption,” says Dr. Merritt, “Additionally, more education of patients and clinicians on the safety and efficacy of biosimilars is necessary.”

Rebates are also hindering biosimilar adoption. Biosimilars are subject to rebate walls, also known as rebate traps. Drug manufacturers pay discounts to self-insured plans or PBMs on the original biologic drugs, resulting in those drugs getting prioritized on the plan’s formulary. 

Even if a biosimilar has a lower net cost than a rebated drug, plans are likely to exclude it simply because of rebates, reducing patient accessibility and plan savings.

“The key to getting more biosimilars included in formularies is to break down the rebate walls as they did with generic drugs,” emphasized Dr. Merritt. “Rebate walls decrease the opportunity for a patient to use a lower-cost biosimilar product while also decreasing the chance to reduce plan costs.”

Another way to increase biosimilar use and acceptance in formularies is to decrease the regulatory hurdles to gaining an interchangeable designation. 

“The interchangeable designation allows pharmacy substitution without explicit authorization by the prescriber,” Dr. Merritt explains, “This would allow for market growth like what we are already experiencing in the generic drug marketplace.”

Biosimilars represent a promising frontier in the healthcare industry, offering a pathway to increased access, cost savings, and innovation. Will we see more mainstream applications for them in 2024?

Dr. Merritt sees a future with widespread biosimilar adoption, but it will take some work.

“Getting more biosimilars included in formularies means breaking down rebate walls, promoting policies that simplify the ability of health plans to switch a sufficient share of patients to biosimilars, educating patients and clinicians, and decreasing regulatory hurdles to gain the interchangeable designation,” summarizes Dr. Merritt, “With these things in place, the biosimilar market will continue to grow, providing more patients with greater accessibility, better therapeutic care, while lowering patient and healthcare plan costs.”

 —

Crafting a benefits strategy that balances cost and clinical outcomes is complex. Prescription Care Management (PCM) does the work for you. To see how PCM is helping self-insured plans achieve the lowest net cost through rebate management, click here.

Pharmacist: Biosimilar Adoption Impacts Patients and Plans in 2024

By Team PCM | Nov 27, 2023 | Blog post, Contract Management, Pharmacy Benefits

Is 2024 going to be the year of biosimilars? Recently, biosimilars have emerged as a transformative force in the healthcare industry, offering cost-effective alternatives to expensive biologic drugs. As drug prices continue to rise, biosimilars could be the key to helping patients receive more affordable care. 

There are currently 44 biosimilars approved by the U.S. Food and Drug Administration, with the approval trends rising as manufacturers try to get ahead of the curve. For example, adalimumab, a biologic used to treat arthritis, already has 15 biosimilars in development. In 2022 alone, biosimilars saved $9.4B, allowing 344 million people to receive therapy otherwise unavailable without biosimilar competition. 

Dr. David Merritt, PharmD, RPh, Chief Pharmacist for Prescription Care Management, explains, “Biosimilars can provide patients with lower cost alternatives, making treatments more affordable and accessible without compromising quality of care.”

Biosimilars affect patients and may lead to lower health costs for self-insured health plans. Because biosimilars are much more cost-effective than their brand-name counterparts, patient adherence could improve, lowering plan pharmacy spend and expenses associated with hospitalizations and follow-up care for chronic conditions. 

What are the prospects for biosimilar adoption? 

According to Cardinal Health, by 2025, biosimilars will reduce U.S. drug spending by $133B. However, the complexity of the market impedes consistent adoption. A lack of familiarity with biosimilars could cause providers and patients more comfortable with traditional drugs to hesitate to accept biosimilars as viable alternatives.  

“Biosimilars have been proven as safe and effective as the originator biologic and are offered at a reduced price,” explains Dr. Merritt, “However, demand for the product has been slow to shift from the original biologic, especially when clinicians and patients do not regard the products as clinically equivalent even though they have been proven safe and effective.”

Open policies and better education are important in overcoming this hurdle.

“Promoting policies that will simplify the ability of health plans to switch a sufficient share of patients to biosimilars would increase adoption,” says Dr. Merritt, “Additionally, more education of patients and clinicians on the safety and efficacy of biosimilars is necessary.”

Rebates are also hindering biosimilar adoption. Biosimilars are subject to rebate walls, also known as rebate traps. Drug manufacturers pay discounts to self-insured plans or PBMs on the original biologic drugs, resulting in those drugs getting prioritized on the plan’s formulary. 

Even if a biosimilar has a lower net cost than a rebated drug, plans are likely to exclude it simply because of rebates, reducing patient accessibility and plan savings.

“The key to getting more biosimilars included in formularies is to break down the rebate walls as they did with generic drugs,” emphasized Dr. Merritt. “Rebate walls decrease the opportunity for a patient to use a lower-cost biosimilar product while also decreasing the chance to reduce plan costs.”

Another way to increase biosimilar use and acceptance in formularies is to decrease the regulatory hurdles to gaining an interchangeable designation. 

“The interchangeable designation allows pharmacy substitution without explicit authorization by the prescriber,” Dr. Merritt explains, “This would allow for market growth like what we are already experiencing in the generic drug marketplace.”

Biosimilars represent a promising frontier in the healthcare industry, offering a pathway to increased access, cost savings, and innovation. Will we see more mainstream applications for them in 2024?

Dr. Merritt sees a future with widespread biosimilar adoption, but it will take some work.

“Getting more biosimilars included in formularies means breaking down rebate walls, promoting policies that simplify the ability of health plans to switch a sufficient share of patients to biosimilars, educating patients and clinicians, and decreasing regulatory hurdles to gain the interchangeable designation,” summarizes Dr. Merritt, “With these things in place, the biosimilar market will continue to grow, providing more patients with greater accessibility, better therapeutic care, while lowering patient and healthcare plan costs.”

 —

Crafting a benefits strategy that balances cost and clinical outcomes is complex. Prescription Care Management (PCM) does the work for you. To see how PCM is helping self-insured plans achieve the lowest net cost through rebate management, click here.