For the first several years of biosimilar research, approvals, and launches, we wondered aloud whether payers could potentially introduce a “biosimilar tier,” a low cost–sharing tier that would entice patients to switch to less-expensive biosimilars by using the low-copay carrot approach. This was discussed with patient advocates as well as payers.
Plans covering biosimilars, specifically Medicare prescription drug plans (PDPs), had not encouraged biosimilar adoption through lower cost sharing. In 2021, Socal and colleagues published the results of a survey of Medicare PDPs (admittedly, infused infliximab is almost exclusively covered under the medical benefit or Medicare Part B). They found that between 2016 and 2018, virtually none of the PDPs offered infliximab biosimilars under a lower cost-sharing tier; nearly all covered biosimilars at parity to the reference product Remicade®.
The researchers concluded, “Formulary placement of infliximab biologic and biosimilars in Medicare Part D is not optimized to generate cost savings for the Medicare program and beneficiaries, whose cost sharing is often based on the drug’s list price. The Medicare program should provide incentives for PDPs to expand biosimilar coverage.”
This conclusion was seconded by the well-publicized March report from the HHS Inspector General’s office, which estimated the savings opportunity from Medicare for encouraging biosimilar use. However, the report stated that in 2019, Medicare beneficiaries overall paid on average less out of pocket for biosimilars than for reference pegfilgrastim, filgrastim, infliximab, and epoetin-alfa. Both reports are limited by data that are 3+ years old, a very long time in the biosimilar arena, considering recent adoption rates and launches and availability of several newer oncology biosimilars.
A couple of biosimilars drugs (outside of adalimumab) that may be covered under the pharmacy benefit will be available in the next couple of years. This includes ustekinumab (Stelara®). Interestingly, this drug is currently under tier 2 in UnitedHealthcare’s Advantage formulary and in Cigna’s three-tier formulary. If the biosimilar is already offered at a tier 2 copay (i.e., $50-$75 per prescription), how much lower could biosimilar tier cost sharing be? Could plans waive cost sharing under this benefit? Perhaps exclude them from any drug deductibles? Even put them into a generic drug tier?
Plans that prefer biosimilars tend to make them available with sufficiently low cost-sharing tiers. Even if they are not preferred, they may be listed at parity on tier 3, which still represents far lower out-of-pocket costs than if it was covered on a specialty tier.
Furthermore, insulins, arguably the most heavily used of the biosimilar medications, will not be part of a biosimilar tier. Individual states are mandating out-of-pocket cost limits, and CivicRx is planning to set the cost of its insulin glargine at a very low wholesale acquisition cost; health systems and payers may opt for generic-level cost sharing for this product rather than a higher-cost biosimilar tier.
And we should not forget that a high proportion of costly medications today are subject to manufacturers’ copay cards, which minimize patient out-of-pocket costs, at least for the first year of therapy. This will likely be the case with the launches of new adalimumab biosimilars. Their manufacturers will come to market with patient services offerings that mimic those of AbbVie.
All of these factors may make talk of a biosimilar tier moot. If payers and PBMs do want to encourage the use of biosimilar agents on the pharmacy benefit, they will have to keep patient cost sharing affordable (irrespective of the products’ costs to the plan or PBM). Judging by the trend today, payers do seem to understand that.