Employers Getting Their Arms Around Biosimilars, but Will Push Come to Shove?

Until the onset of COVID-19 pandemic, employers sponsored the health plans that covered 49.6% of the US population. “Although the situation is very fluid,” F. Randy Vogenberg, PhD, RPh, Board Chair of the Employer–Provider Interface Council (EPIC), told BR&R, “a conservative estimate is that this may have dropped closer to 40% at one point with the higher unemployment resulting from the country’s economic downturn.”

According to Bernstein Research estimates, currently marketed biosimilars are now saving the US about $5.6 billion a year, and employers are only now awakening to the promise of biosimilars. At this week’s Festival of Biologics virtual meeting, a voice representing employers asked for colleagues to go beyond understanding biosimilars and to help secure the sustainability of the industry.

Margaret Rehayem

Margaret Rehayem, Vice President of the National Alliance of Healthcare Purchaser Coalitions, told attendees that “employers hope that biosimilars will take a more competitive place in the market, and that “employers look for reduction of wasteful and low-value drugs.” That fits well the raison d’être for the introduction of biosimilars.

There does seem to be some impetus for moving these days: Ms. Rehayem said, “The biosimilar industry is not quite at the point of sustainability in the US. Employers are just now wrapping their arms around what a biosimilar is. They need now to engage.”

One might expect this engagement to start by pressing their health plan vendors to (1) prefer the use of biosimilars so they can see some of that annual savings and (2) ensure that any rebates are passed completely through to their own bottom lines (particularly self-insured companies). Ms. Rehayem concurred, stating that payers are still driving choices of reference vs biosimilars. “Employers have taken a back-of-the-bus approach,” she stated, “letting payers make coverage decisions and accepting their recommendations. But you almost have to have a medical degree to understand the issues.

“It is important though to look at how biosimilars first came on the market, with [small] discounts, making it easy for the reference manufacturers to compete,” she said. “Employers need to step up and engage beyond the use of intermediaries. More work needs to be done.” She called for more education, adding that the FDA’s approach on restricting misleading information was just a beginning.

“Some of our employer coalitions are acting on their own,” said Ms. Rehayem, pointing to a paper from the Midwest Business Coalition on Health, “which takes employers through a series of steps to take the right actions at the right time [to improve access to biosimilars]. Employers should be looking at contracts, looking at the status of formularies, moving from the back seat to

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