Based on a survey of cancer center pharmacy directors and policy development by these health executives at NCCN institutions, the white paper expressed concerns particularly around both storage issues and concerns about the health of the biosimilar industry.
Payer coverage restrictions were a focus of the white paper. Cancer centers have to stock adequate supplies of any biologic or biosimilar in a drug class that may be preferred by the several plans covering members who might visit the center for care. For example, one health plan may cover Herceptin® and not its biosimilars, yet another may prefer Herzuma® over the reference product and the other biosimilars. Still another may cover Kanjinti® only or all of the drugs in the category at parity. If a cancer center like Mayo Clinic contracts with six or more plans, the probability rises that many if not all of these products will need to be stored. The inability to automatically interchange these products with one another prevents an easy solution to the problem.
Further, payer restrictions “can threaten the continued availability of biosimilar products in the marketplace if payers refuse to reimburse for, without exclusions or restrictions, at parity, all biosimilar products within a therapeutic class,” state the authors. “In some cases, certain payers require use of the higher cost (to the hospital) reference product, to the detriment of the less-expensive biosimilar.” The principal reason for this situation, they believe, is likely rebates paid by manufacturers to the payers.
Who’s P&T Committee Holds Sway?
Another interesting challenge faced by the cancer centers is that payer coverage of products limits to an extent the institution’s options during its own Pharmacy & Therapeutic Committee deliberations.
“Insurance company restrictions, which are generally not visible to the cancer center physician or pharmacist and often are not known ahead of time by the finance department prior authorization (PA) or pre-certification staff members.” The white paper continues, “When PA is performed, the inevitable result is payment denial with resulting appeals, draining time and resources from healthcare providers and contributing nothing to improve patient outcomes or safety, or decreasing the cost of health care. Policies such as these may also lead to medication errors and/or financial toxicity for patients.”
A larger problem, NCCN points out, is that some manufacturers may exit the biosimilar market because “lack of parity and lack of equal access to hospitals (since hospitals cannot administer medications that they know will not be reimbursed). This may lead to less competition and possible loss of cost savings—the original reason for the BPCI Act.”
It is true that health systems have had to address the patient’s health care coverage restrictions for many years. Hospitals maintain their own drug formulary for inpatient and outpatient care. Once patients are discharged or cared for in the community setting, the drug formulary of the patient’s health plan or insurer then dictates which medications are covered. This often results in changes in treatment with small-molecule medicines.
Of course, this is not the case for biologics (at least other than insulin). And not for cancer centers, who treat the patient through the entire episode of care. They have to be highly cognizant of which product is covered by which insurer and ensure that the patient doesn’t wind up having to pay an enormous bill for treatment with noncovered agents. If all biosimilars and reference products were covered, this implies that the health system can persuade its clinicians to prescribe one of the limited number of agents on its own formulary, thus alleviating the storage issue.
Lower Prices or Fewer Storage Requirements
The white paper from NCCN does seem to suggest a question about the value of biologic competition for payers, however, and it is closely related to the topic of an article posted recently. If there is to be coverage at parity, this would tie the hands of payers to get the best deal possible.
Although we agree that the sustainability of the biosimilar industry is still at risk, it may be more a risk for certain manufacturers who must fight harder for uptake. This will likely be the case for those drug makers who are late to the market; this has always been the case for brand or generic medications struggling for marketshare in a crowded drug category.
NCCN’s point about drug storage is well taken. Biologic medicines often require refrigeration and sometimes special handling. Yet, the pharmaceutical pipeline is stocked with biologic products (many of which are cancer therapies), and this particular problem will not go away if stocking all biosimilar and reference products were not required.