A research letter that appeared in JAMA in May has been receiving attention in biosimilar and payer circles. The attention may be a bit outsized compared with the importance of the authors’ findings, but they do support an important point: Biosimilars cannot succeed without payer coverage.
The good news is that payers do cover biosimilars by and large outside of Remicade®’s infliximab competitors. That the infliximab category is the exception to the rule is not at all surprising. These researchers from Tufts Medical Center, Boston, found that other biosimilars were infrequently subject to policies that excluded their use before trying a reference product (except for infliximab, in which case Renflexis® and Inflectra® were subject to these policies more than half of the time).
The paper’s authors surveyed 17 commercial health plans accounting for 60% of all commercial lives for which this information was publicly available. They based their findings solely on prior authorization or step-therapy criteria. In other words, they did not base their results on formulary tiering or cost sharing. That is a considerable limitation. Specifically, they determined “preferred,” “on par,” or “nonpreferred” coverage solely on the plan having a policy in place that may have mandated initial use of the reference product or biosimilar before the other drug can be tried.
As pointed out previously, these policies are de facto product exclusions, because no physician would expect a patient’s condition to improve with a biosimilar if the reference biologic failed to yield benefits. That would be an irrational expectation and poor practice.
Based on this criteria, Zarxio® (filgrastim) and Retacrit® (epoetin) were preferred 51% and 21% of the time, and almost always covered on par with the reference agent otherwise (49% and 71%, respectively). Although the data were captured in August 2019, when bevacizumab and trastuzumab were only recently available, neither cancer-treating biosimilars were subject to fail-first policies. For pegfilgrastim biosimilars, Fulphila® was nonpreferred in 21% of health plan decisions compared with Udenyca®, which was nonpreferred in only 7%; the authors did not specify whether Fulphilia could be used if Udenyca (or the reference product) was first tried.
The authors speculated that rebates may be at the root of drug coverage determinations. This may well be the case, as net pricing differences are the bedrock on which biosimilar marketing is built. That is further supported by the finding that certain health plans tended to make similar decisions across biosimilar categories. Seven plans, for instance, applied these fail-first policies in at least 46% of their biosimilar coverage decisions.
This study does not actually test whether biosimilars are placed in preferred, nonpreferred, or specialty pharmacy tiers, with their differential cost sharing. That information will be necessary for future biosimilars covered under the pharmacy benefit, before we can fully understand a health plan’s encouragement for the utilization of biosimilars. Yet, on the medical benefit, under which nearly all of the currently marketed biosimilars are covered today, fail-first policies can be considered coverage exclusions. And the fact that over 40% of large commercial plans are still willing to exclude certain biosimilars for certain indications, is not a promising sign for the industry.