Articles | April 5, 2023
Our latest short quarterly insight on healthcare news for plan sponsors focuses on biosimilars.
How to encourage adoption
This issue of Trends also mentions news about the Transparency in Coverage (TiC) rule and includes a compliance reminder that the first “gag clause” attestations are due by the end of 2023.
Interchangeable biosimilars may be automatically substituted by a pharmacist for the original biologic or reference product, like generic substitution for brand-name medications, while non-interchangeable biosimilars require prescriber approval.
* Excluding manufacturer rebates
Source: Segal’s SHAPE data warehouse
A biosimilar is like a generic version of a biologic drug. However, a generic drug is an exact copy of a brand drug. A biosimilar is a near-replica of another biologic medication that is already licensed by the FDA (the reference product) and is close enough that it leads to similar clinical outcomes.
Biosimilars will change the treatment landscape by increasing access for patients who need specialty drugs. Additionally, the availability of biosimilars presents an excellent opportunity for plan sponsors to lower costs.
Humira® (adalimumab) is the top-selling anti-inflammatory prescription drug in the world and is often the top drug cost for plan sponsors. The first Humira biosimilar, Amjevita®, was launched at the end of January. There are at least seven additional biosimilars for Humira in the pipeline that are expected to be approved this year. More biosimilars to treat autoimmune conditions are expected to enter the market, including one for Stelara® (ustekinumab) in early 2024.
Biosimilar uptake has been slow for many reasons, including:
While biosimilar uptake has been slow, increasingly, its availability and adoption bring the potential to produce significant savings for plan sponsors.
Brand-name drugs, including specialty medications, account for the vast majority of prescription drug spending, with specialty medications representing 55 percent of total drug costs.
For example, two pricing models have been reported for Amjevita: a non-rebate-eligible option that is 55 percent lower than Humira’s list price and a rebate-eligible option that is 5 percent lower.
Plan sponsors can use several strategies to encourage use of biosimilars:
Consider these questions when developing strategies to promote biosimilars:
On March 4, 2023, U.S. Senators Maggie Hassan and Mike Braun sent a letter to the Centers for Medicare & Medicaid Services (CMS), expressing concerns about “loopholes” inhibiting the intent of the TiC rule to allow consumers to leverage data to assess drivers of healthcare costs, make informed healthcare decisions and develop targeted solutions.
While most health plans are technically complying with the TiC rule, many have provided information in an “indecipherable” structure, omitted important pricing information and compiled information into files too large to be processed by average consumers. The senators also noted significant inconsistencies between files as an additional challenge in performing cross-plan comparisons.
Potential solutions for CMS to consider include limiting file size, creating a standardized reporting template, creating a central repository for all files, a reduction in frequency of reporting and requirement of a clear organizational system and standardized labeling.
Plan sponsors should work with their legal counsel to ensure any contracts with TPAs or other network service providers do not contain gag clauses, as well as prepare to complete an online attestation by December 31, 2023. Learn more about this in our March 10, 2023 insight.
This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.
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