Are private-labeled biosimilars from PBM distributors a lifeline for the biosimilar industry or another barrier to ensuring biosimilar competition into the future?
In 2023, adalimumab biosimilars gained virtually no traction when covered at parity with the reference product Humira®. Only once CVS Health launched its Cordavis distributor subsidiary in April 2024 did adalimumab biosimilar uptake begin to rise. And rise it did: Within a month’s time, overall biosimilar utilization jumped to 10%, from 2% in March 2024. Cordavis covered only Sandoz’s Hyrimoz® at a high wholesale acquisition cost (WAC), unbranded Hyrimoz at a low WAC (private-labeled under Cordavis), or unbranded Humira (private-labeled under Cordavis) at a low WAC. Subsequently, Evernorth announced that its Quallent Pharmaceuticals subsidiary would be distributing a mid-WAC, private-labeled version of adalimumab (a version of Cyltezo® and Simlandi®). In January 2025, OptumRx’s new entity Nuvaila will have its own private-labeled biosimilar, the unbranded version of Amjevita®.
Adalimumab biosimilar uptake: Source: Nick Adolph, IQVIA. Presentation at GRx+Biosims 2024, October 2024, North Bethesda, MD.
These moves also included noncoverage of the reference product (but not the exclusion of Humira’s unbranded version). The overall effect has been to further increase the number of competitors in the marketplace but not necessarily total biosimilar utilization. According to the latest IQVIA data, growth in biosimilar utilization has ceased (or paused), stuck at essentially the same level as in April 2024. As CVS Health’s Joshua Fredell told us in September, 97% of prescriptions have been converted to biosimilars. On the other hand, the introduction of Quallent’s (i.e., Express Script’s) Coverage package has seemingly had little effect from June until today.
Some very knowledgeable people I’ve spoken to believe the floodgates of adalimumab biosimilar utilization will open wide in January. I am more skeptical about the prospects. To date, none of the biosimilar makers who have not signed a deal with a PBM “pseudomanufacturer” gained any significant market share. In other words, if you’re not chosen to play for one of the three teams, you may never see the ballfield.
PBM Private Labeling as a Template?
I’ve written often that the adalimumab biosimilars may well be the foundational model for how the other pharmacy benefit–covered biosimilars are introduced and perform. We do know that at least several the Stelara® biosimilars will be launched in the first quarter of 2025, and we know that ESI/Quallent will be offering an 80% discount upon launch on its partner product Wezlana®.
Unless the PBMs allow for wider coverage of the biosimilars in this drug category, beyond private-labeled biosimilars, manufacturers of ustekinumab biosimilars who cannot make a deal with them will be left on the sidelines again.
Private-labeled biosimilars represents an additional barrier to future biosimilar development as well as a channel where initial biosimilar utilization in these categories can occur. Granted, the market could never sustain 10 adalimumab or ustekinumab biosimilars (and more, counting reference manufacturers’ unbranded offerings). However, even those manufacturers who sign on the dotted line with these PBMs may not see sufficient utilization at current pricing discounts to remain active competitors.
A word of caution: If we wind up with fewer than 3 or 4 competitors for any one drug, prices may begin to rise again in that category. The situation as is will not entice new manufacturers to develop biosimilars to be covered under the pharmacy benefit. Nor will it persuade current players to fill their pipelines, which would help the US healthcare system save billions of dollars on the cost of effective specialty drugs.
I won’t predict how the incoming presidential administration may try to alter the Inflation Reduction Act, which is a separate stressor on the future of biosimilar development. However, I’m concerned that this new biosimilar distribution channel may not be the lifeline that some manufacturers need to gain utilization and remain on the playing field. It’s all about ensuring biosimilar competition.
This evolutionary approach to PBM finances, formulary policy, and price discounting is a work in progress. There is much for us to monitor in the next few months to better understand whether my concerns are valid.
