Tag: AMCP

Follow-on Biologics Versus Line Extensions, and What Are the Implications for Biosimilars?

Is a citrate-free formulation of Humira®, which is supposed to result in less injection-site pain, just another part of the patent thicket, or is it a real-improvement in the brand? Payers aren’t impressed, based on discussions we had at the Academy of Managed Care Pharmacy (AMCP) annual meeting last week.

In her presentation, Jennifer Day, PharmD, Coordinator Emerging Therapeutics Strategy Program, Kaiser Permanente Drug Information Services offered that these products, and potential follow-on biologic products like ravulizumab (Ultomiris®), may create new barriers for biosimilar development and uptake.

According to several pharmacy directors and medical directors I spoke to in private conversations, they are approaching citrate-free Humira in the same way as they view Herceptin Hylecta® and Rituxan Hycela®, subcutaneous formulations of Roche’s two maintstay biologics for the treatment of cancer. They are more line extensions than follow-on biologics, and as such do not necessarily provide any additional value.

This is not to say that Roche’s products cannot produce some type of savings (either based on site of care or lower administration costs). The cancer chemotherapies would likely still be administered in a doctor’s office or clinic, they agreed, but faster administration time could result in lower fees. This doesn’t necessarily tip the scales in favor of the newer products, particularly if a biosimilar is available in the original formulations at lower costs. Yet, the subcutaneous formulations may make a stronger case for these oncology medications to be managed under the payer’s pharmacy benefit, with distribution via specialty pharmacy.

The payers are not placing significant value on the citrate-free version of adalimumab, partly because injection site pain is a lesser concern for them. Although it may be attractive to patients, payers are wary of ascribing any added value to this agent. If adalimumab biosimilars were available today as alternatives in the United States, based on what we are hearing, the citrate-free formulation would not prevent a run to lower-cost biosimilars.

The greater issue may be follow-on biologics like Ultomiris, which is being sold by the manufacturer of eculizumab (Soliris®). Eculizumab may be among the next generation of biologics targeted by biosimilar manufacturers. It was approved in 2007 by the Food and Drug Administration (FDA), and its utilization can be preempted by Alexion’s push to use the newer agent. At least one prospective manufacturer (Amgen) is working on a biosimilar agent for eculizumab.

It would be logical to expect that the threat of biosimilar activity could accelerate the development of follow-on agents, particularly in view of the success that biosimilar manufacturers have had in obtaining FDA approval. If the extraordinary patent defenses erected by some manufacturers, like AbbVie, are under continuing attack, accelerated development and marketing of a follow-on agent may be the next best action.

In related biosimilar news…Several disparate organizations are joining the front against AbbVie’s patent thicket strategy for Humira. Fierce Pharma is reporting that since the initial lawsuit by a union of New York grocery store workers last month, others like another union in New York of heavy machine operators, the police department of Miami, the mayor’s office in Baltimore, and Minnesota pipe fitters and electrical workers groups have filed class action lawsuits. The AbbVie lawsuit by police organization also implicated Amgen, in signing a pay-for-delay deal allowed it an effective 180 days of exclusivity where none was statutorily allowed.

Rumblings About Drug Rebates and Safe Harbors at AMCP

The environment in which managed care has grown since the 1980s is changing at a pace not seen since the introduction of Medicare Part D. Just a couple of years ago, I visited San Diego (where the meeting was held March 25–28, 2019), and the city was very much pleasantly unchanged compared with many visits in the past. This year, an infestation of electronic, dockless scooters and powered bicycles littered the sidewalks everywhere you turned. Some leaning on kickstands, many laid broadsides on busy sidewalks. Inexperienced tourists and seemingly professional riders zoomed through streets and walkways at top speed, menacing pedestrians and sightseers alike. A rapid change with potentially dramatic consequences. The same can be said for the payer environment today.

Although the potential removal of the drug rebate safe harbor was the focus of conversation, many others reverberated in the presented sessions and tableside discussions. We heard plenty on posting drug list prices on direct-to-consumer advertising (and tell me why the US allows DTC advertising in the first place?). The Trump Administration’s strange decision to renew support for a judicial effort at repealing the Affordable Care Act. The imminent departure of Scott Gottlieb, the best friend biosimilar manufacturers may ever have. The latest integration of payers, the Centene–Wellcare transaction.

However, the drug rebate safe harbor question did take center stage. Most payers are convinced that something definitive will now take place after completion of the comment period (deadline is April 6th). Ross Margulies, JD, MPH, Senior Associate from the law firm Foley Hoag LLP, provided a review of action so far. He believes the February 6th proposed rule could be “the biggest change [to Medicare] since implementation of Part D.”

DRUG REBATE SAFE HARBORS: BEGINNINGS AND ENDINGS

Ross Margulies
Ross Margulies, JD

Mr. Margulies noted that the current drug rebating environment is the result of a 1990s settlement between pharmacies, who sued the pharmaceutical industry and wholesalers, arguing that drug rebates violated the Robinson–Patman Act, which prevents price discrimination. The settlement allowed rebates only when it was connected with marketshare.

Last year, the Department of Health and Human Services complained that rebates are problematic because they can be retained by plans and PBMs, and not reaching the consumer; the rebate is not considered when consumers’ cost sharing is calculated; and may be at the root of the rebate trap, which is a threat to biosimilar uptake.

The Trump Administration sought to address the problem through the anti-kickback statute, which applies to Medicare Part D and Medicaid managed care. The rebate is an inducement to convince the plan and PBM to sell more of the product, said Mr. Margulies. Today, 28 safe harbors protect these parties from persecution, created by the Office of the Inspector General.

According to Mr. Margulies, the proposed new rule amends the drug rebate safe harbors by eliminating the protection for these manufacturer payments to PDPs, MA-PDPs, PBMs, and Medicaid MCOs. The Administration also proposed the creation of two new safe harbors: (1) for fixed PBM service fees that are set out in writing in advance and based on fair market value and (2) for price reductions taken at the point of sale (i.e., at the pharmacy counter), meaning the rebate is completely passed through to the patient.

These changes would be implemented in 2020. “HHS’s goal is to get the WAC price reduced all the way down to net,” said Mr. Margulies. However, it may not lower the cost of drugs overall, per President Trump’s desire. “It may change some behaviors, though, as plans would not be incented to prefer high price/high rebate drugs.” He pointed out that moving towards a point-of-sale discount would represent a new model. “It is a major change for how pharmacies will be paid,” he noted, and would likely involve the pharmacy receiving the patient’s copayment, a reimbursement from the health plan, and then a retrospective chargeback to the manufacturer to make the pharmacy whole.

WILL THE RESULT BE LOWER DRUG PRICES?

How the manufacturers react will be the subject of some interesting conjecture. Mr. Margulies stated that the federal government hopes 15% of the former rebates will be retained by the manufacturer, with 75% to be applied as discounts at the point of sale. The remaining amount would then go towards a reduced list price. He said, “Manufacturers could theoretically make the WAC price the net price (no discount), which would cost the system a great deal. Patients with fixed copays will not likely see much or any difference.” On the other hand, premiums could rise as much as 25% to compensate for lost rebates at the plan level. However, it would not be reasonable to believe at this time that the drug manufacturers would simply lower their prices 15% en masse.

He doesn’t believe that Medicaid will be affected, as their rebates are already passed directly through to the states (Medicaid beneficiaries have very low or no copays).

In the end, Mr. Margulies explained, Health and Human Services has no legal authority to prohibit drug rebates. Any final proposal must go through Congressional action before it can be enforced as law. Pharmaceutical contracting is moving head long into a new era, much like personal transportation in San Diego. I hope neither turns out to be accident prone.

A Blueprint for Successful Infliximab Biosimilar Switching

Payers have not been quick to add biosimilar infliximab to their drug coverage. Yet, biosimilar switching is the objective for most health plans and insurers who are thinking about long-term savings. Even if they do not exclude the reference product Remicade® from coverage, some health plans, like Kaiser, have been moving forward in this effort.

At the Academy of Managed Care Pharmacy’s Nexus 2018 meeting in Orlando this week, two clinical pharmacy specialists from Kaiser Foundation Health Plan of the Northwest described what may be a best practice in converting patients to biosimilar Inflectra®.

RELEVANCE OF BIOSIMILAR SWITCHING AT THE PLAN LEVEL

Kayla Hubrich, PharmD, emphasized the importance of patient education, and patients’ reliance on Google for research. She said, “When patients will turn to Google and type in ‘Should I switch to an infliximab biosimilar?’ the first search result they see is an ad for ‘Finely Tuned,’ a Janssen website.” This, of course, discourages the use of biosimilars.

At Kaiser Foundation Health Plans, coverage decisions are made at a national level for its 12.5 million members and implemented at the regional plan level, according to Lynsey Smith, PharmD. The health plan made Zarxio® its preferred filgrastim product in 2016, and registered 96% of all filgrastim dispensings in self-injected settings, and 100% of all clinical administrations for this biosimilar.

Biosimilar switching
Source: Kaiser Foundation Health Plan

Obtaining that level of use means that not only treatment-naive patients were using Inflectra, but also those using Remicade in the past. Dr. Smith outlined the key steps in this conversion, starting with the providers. “For new starts,” said Dr. Smith, “the tactic was just to have the doctor choose the biosimilar” using tools incorporated into the electronic health record that encouraged them to order the preferred product. Concerning those patients needing to be converted from the reference product, Kaiser asked the prescriber to sign a ‘Therapeutic Equivalency Protocol’ agreement, which authorized the plan to make the switch. The biosimilar switching agreement was voluntary, and virtually all the rheumatologists, dermatologists, and gastroenterologists signed. “One GI out of 20 declined to authorize the switch in patients already receiving Remicade,” she said.

Kaiser emphasized patient notification and education. A letter, signed in their doctor’s name, was sent to each patient at least 2 weeks before the conversion date, explained Dr. Smith. Clinical Pharmacy Services was enlisted to answer patients’ questions via phone and E-mail. Patients were also given informational handouts about the biosimilar switching program at their infusion center.

“During this process, the clinical pharmacists received 30 to 40 calls,” she said. “The patients’ main concerns were whether the product was going to work as well as their old drug and whether they would receive the same copay assistance as before.” Active patient outreach was not conducted after the switch was instituted. Any patients reporting issues or concerns were triaged through Clinical Pharmacy Services.

Dr. Hubrich added that infusion center pharmacists reviewed all patients scheduled for infusions one week ahead of their appointment. The infusion center confirmed that the provider signed a TEP document, that patients were sent the notification letter, and that the infliximab order changed to Inflectra. Kaiser also developed a nurses’ protocol for the biosimilar switch and worked to educate practice staff about the program.

 

INFLIXIMAB SWITCHING PROGRAM RESULTS

The conversation program began on May 1, 2017, with dermatologists and rheumatologists, focusing on patients who were getting their first infliximab treatment. Dr. Hubrich stated that notification letters were sent to 158 patients. Three weeks later, current patients began to be switched from Remicade to Inflectra. The GI conversion began on May 11, 2017 with treatment-naïve patients, and letters were sent to 188 adult patients (as Inflectra did not have the pediatric ulcerative colitis indication). Active therapeutic switching began in September. “The one GI who declined to sign the TEP agreement joined in 2018,” said Dr. Hubrich. This is likely because of the experience of this doctor’s peers.

A total of 22 patients (6.4%) across specialties reported adverse events, with nine being changed back to reference product (2.6%), five changed to a different medication class, four resulted in a dosage increase, one patient decided to discontinue therapy, and three continuing biosimilar infliximab treatment without any change. They did find that 12.8% of patients experienced some “nocebo” effects, despite the fact that “no statistically significant changes in effectiveness and safety were observed after a medican of four infusions in 9 months of study.”

Dr. Smith asserted that communication was critical to the success of the program, with patients and providers. The provider’s agreement to sign the TEP document was a necessary step, and was accepted by all Kaiser’s specialist providers.

It must be emphasized that Kaiser has a different magnitude of leverage over its physicians than a network plan like Aetna or CIGNA. Yet a biosimilar switching program like this could be a blueprint for other integrated health plans to move forward if they desire to move patients quickly and efficiently to biosimilar therapy.

State Biosimilar Laws Need Clarity and Consistency

Although 41 states currently have passed legislation to enable plans to substitute interchangeable biosimilars, these state biosimilar laws seem an attempt to put the cart in front of the horse. Reginia Benjamin, JD, Director of Legislative Affairs, at the Academy of Managed Care Pharmacy, explained that the first state legislation to optimize the use of biosimilars was signed in 2013, before any were approved by the Food and Drug Administration.
Biosimilars Review Biosimilar ReportsMs. Benjamin’s presentation last week at the annual meeting of the AMCP in Boston highlighted the fact that by the time Zarxio®, the first biosimilar was approved, 10 states had similar laws on the books.

The individual state biosimilar laws do vary quite a bit. Some of them specified that notification must be given to the provider (via phone, fax, or notation in the EMR) that a reference product is being substituted. She added that these requirements are generally above and beyond what is mandated for the dispensing of other medications.

At the time the majority of these laws were enacted, the FDA had not yet defined the criteria for an interchangeable biosimilar.
As a result, the medications’ definition of interchangeability varies in some states’ legislation. For example, they may rely on the way the Biologics Price Competition and Innovation Act (BPCIA) framed interchangeability, which is less specific than the FDA’s current guidelines.

To complicate matters, said Ms. Benjamin, states may also refer to a level of therapeutic equivalence as defined by the FDA’s Orange Book. However, the Orange Book does not address biologics, only small molecules. The Purple Book would be the appropriate reference, but this was only introduced in 2014.

Additional state legislative language, which is not uniform, includes the following:

  • Patients must be notified before receiving the biosimilar medicine (and varying timeframes for such notification)
  • Receipt of patient approval of the interchanged biosimilar before dispensing
  • Requirements to state boards of pharmacy produce a website with information on FDA-approved interchangeable biosimilars
  • Limits on liability for pharmacists who substitute a biosimilar for a reference product (ie, no greater liability exists than for filling any other prescription)

Ms. Benjamin stated that “state laws are inconsistent with the intent of the BPCIA,” for instance, pharmacists do not have independent authority to substitute a biosimilar agent for the originator product without the approval of the health provider. They fail to recognize the Purple Book as the FDA’s reference source for information about the interchangeability of biosimilars.

She concluded that education is key in providing stakeholders to better inform them of the potential for these drugs, “to provide increased access to safe and more cost-effective drugs.”

Payers’ Expectations for Biosimilars Reflect a Conflicted Environment

Hopeful but not enthusiastic. Preparing but not anticipating. Those are the impression one gets when speaking to medical directors and pharmacy directors of health plans, insurers, and pharmacy benefit managers about biosimilars today. Although savings associated with biosimilar use have been limited so far, one recently released survey of these payers revealed expectations that seem to reflect today’s environment.

payer expectations of biosimilarsIn December 2017, executives from the TPG-National Payer Round Table (NPRT) obtained 77 responses to their Web-based survey (a 31% response). At that time, only eight biosimilars had been approved (Pfizer’s Ixifi™ [infliximab] was not yet approved by the Food and Drug Administration). Thirty-nine percent of the respondents were from national plans, 27% were from regional organizations, and the remainder were from local health plans.

Fifty-three percent of the respondents indicated a willingness to permit biosimilar use for all originator-approved indications, regardless of the FDA’s approved labeling. Twenty-five percent expected a biosimilar to be the only product covered on formulary. In order to enhance conversion and uptake, nearly half (48%) believe that the biosimilar will be associated with lower cost sharing than the originator. This could come in the form of a separate biosimilar tier, with a fixed copay or percent co-insurance that is significantly lower than that for the originator drug.

Uncertainty About When and How Much 

The study results were released as a poster at the 2018 annual meeting of the Academy of Managed Care Pharmacy last week. In an interview with Biosimilars Review & Report, Richard A. Brook, MS, MBA, Senior Vice President at TPG-NPRT, said, “Health plans generally expect their costs to go down with the use of biosimilars. However, a lot of uncertainty remains as to the timing and magnitude of these savings.”

Indeed, some of the respondents were quite cynical about the savings seen in 2018. Forty-five percent believe there will be less than 10% savings from biosimilars overall this year. A further 16% do not anticipate any savings from biosimilars. The picture brightens significantly when the timeframe is moved two years out—by 2020, 29% believe savings will exceed 20%, and 47% think that savings will be 10% to 20%. Only 2% think no savings will be accrued. This is likely in line with expectations that etanercept, pegfilgrastim, and some oncology biosimilars will be available for use by 2020.

Lessons for Biosimilars From the Generic Drug Industry

The utilization of generics in the US is vast, upwards of 86% of all prescriptions in 2017, according to the latest research by IQVIA. The pace of generic drug approvals by the Food and Drug Administration is also impressive, with 767 last year. This does not ensure the future of the generic drug industry, however, said Doug Long, MBA, IQVIA’s Vice President of Industry Relations. If we’re not careful, biosimilars in the pipeline could suffer a fate similar to that for newly approved generics.

Doug Long, IQVIA
Doug Long, IQVIA

In his yearly update presented at the Academy of Managed Care Pharmacy 2018 annual meeting on April 25, Mr. Long said that despite near-record numbers of generic approvals over a three-year period, “only 30% of these generics were actually launched. That’s not happened before.” The reason is that the manufacturers, upon receiving approval, reevaluate the marketplace prospects for their product and the competition. “They decide not to throw additional money into a losing proposition,” he stated. In fact, of the 767 generic approvals, only 73 were first-time generics. Ninety percent were simply piling competition onto already crowded drug categories.

He terms it a race to the bottom, but not a death spiral for generics. That is, “we’ve already reached the bottom, and we will come off of it” at some point. Generic drug manufacturers’ reticence to launch will help change the market direction.

Biosimilars have vast potential to save health care dollars, but only if they are launched. In a couple of instances, manufacturers have reviewed their biosimilar positions (Shire, EMD Serono) while early in the pipeline. Though it is reasonable to expect a paring back of prospective biosimilar drug makers, we hoped this would happen once the marketplace becomes saturated. That of course has not happened.

More Evidence of Value in Generics

Although several generic drugs have been associated with steep price increases, the net price change in 2017 for generics was -7.2%, according to Mr. Long. Most of this was the result of large rebates. Despite 86% generic drug prescribing, generics account for only 13% of the revenues. “I think there will be more generic drug shortages as a result of this revenue picture. People are refusing to launch after receiving approval, based on the dynamics of the marketplace,” he said. There will be more patent expirations and opportunities for first-time generics, “but I have less optimism on the biosimilar side.”

“Of 9 biosimilar approvals, we have only 3 launched products,” emphasized Mr. Long, “accounting for just $1 billion in total value of US marketplace in biosimilars.” He was hopeful that biosimilars for Remicade would have “broken the dam,” but this hasn’t happened. “Instead, payers have chosen to take the rebates, not the biosimilars. That resulted in only a 3% marketshare as a result for infliximab biosimilars.”

He noted that the average rebates given to payers and pharmacy benefit managers is 25% for biologics overall. Rebates in the autoimmune area averaged 20%, but payer market research routinely confirms that Janssen’s Remicade® rebates well exceed this figure.

Note: IQVIA is the child of the marriage between Quintiles and IMS.

 

A Health System Biosimilar Survey’s Implications

When asked about potential cost savings with the infliximab biosimilar, nearly one-quarter of health system respondents did not believe that it represented a cost savings opportunity for their organization, according to a newly published survey in the Journal of Managed Care and Specialty Pharmacy.

Conducted by Premier, Inc., a group purchasing organization, 57 US health systems responded to its questionnaire in April and May 2017 (before the launch of Merck/Samsung Bioepis’ Renflexis® biosimilar). All of the health systems currently used infliximab at their facilities.

The greatest barrier to adoption cited by the health systems was the reimbursement from payers (28%), with actual cost of the biosimilar being a lesser concern (10%). According to the survey, about one-third of the respondents had had communications by that time with payers regarding the latter’s approach to biosimilar coverage.

Interestingly, 62% of those systems represented by the survey respondents had not reviewed Pfizer’s Inflectra® in their Pharmacy and Therapeutics Committees. In large part, thiBR&R Logo Transparent1.5-21-2017s was a continuation of a “wait-and-see” approach, particularly in view of the relatively small discounts offered by Pfizer. Others responded that they were awaiting Merck’s entry into the marketplace, to review both biosimilars at the same time.

“For sites of care that approved formulary addition of the infliximab biosimilar, implementation strategies ranged from full product conversion to ‘new patients’ only,” wrote the author, Sonia T. Oskouei, PharmD, Director of Pharmacy Program Development-Biosimilars at Premier. “Some sites added it to their formularies as a preferred product but only when payer coverage supported it.”

Seventy-six percent of respondents perceived that there was a cost savings opportunity for biosimilars compared with the reference product. What are the expectations of the remaining health system executives? If they don’t believe biosimilars do not save the system money, why not?

Interchangeability: Another Challenging Perspective

Although the FDA has offered a pathway for the interchangeable designation, a recent presentation at the AMCP Nexus meeting shone a new light on some fairly important challenges posed by the interchangeable designation.

Edward Li, PharmD, MPH, Professor of Pharmacy, University of New England, Portland, Maine, raised the Web image 3well-trod issue of manufacturing drift—that over time, the reference product in particular is often subject to slight changes in structure that may be due to manufacturing changes, or other factors. This is an extremely important concept in biosimilars, as it highlights that these biologics can never be exact copies of the biologic drug. In fact, the originator biologic produced today cannot be expected to be exactly the same as the medication that was first approved 15 years ago. Although the structure may have changed subtly in these complex molecules, the clinical effects and outcomes have not materially changed. With interchangeability, Dr. Li said, “There should be no clinically meaningful differences,” in terms of safety, purity, and potency.

Once the FDA assigns the interchangeability designation to a prospective biosimilar or one that has already been marketed (and subsequent studies have provided FDA with the data to conclude that it is interchangeable with the originator), payers expect to be able to freely substitute this biosimilar for the originator at the point of dispensing—an expected boon to health plans and insurers, as well as the biosimilar maker.

However, what of the interchangeable biosimilar in the future? If manufacturing drift continues to occur over the course of time, the variation in the biosimilar and originator product will have introduced new subtle changes compared with that previously used in the approval process. “Differences may accumulate over time,” said Dr. Li, and hypothetically, these can lead to differences in safety and efficacy.” Does the biosimilar manufacturer need to prove interchangeability all over again, five years later? Is there a possibility that the biosimilar can be reduced back to the ranks of ordinary biosimilars?

These are important questions. Only after we have a biosimilar  designated as interchangeable will we be able to broach this question. However, it does perhaps give the reference drug maker a line of defense in sparing loss of marketshare.

With Higher Prices, the Need to Promote Longer-Term Value of Pharmaceuticals

The keynote session at the Academy of Managed Care Pharmacy’s Nexus meeting this week aired notes of resistance and denial, resignation, and acceptance. This may sound familiar, especialAMCP logoly if frustration was substituted for actual grief, and closely reflects the process for dealing with the death of a close friend or relative. In this case, one could say that the dearly departed is pharmaceutical pricing rationality.

The panel discussion was in many ways a eulogy. Alan Weil, Editor-in-Chief, Health Affairs, moderated the service. The chief question at hand was whether we are willing or able to pay for innovative therapies that may cost a half-million dollars or more? Mr. Weil pointed out that apart from their cost, these new therapies (e.g., CAR-T) “fit poorly into our current payment model.”

Steve Miller, MD, Senior Vice President and Chief Medical Officer, Express Scripts, said that the answer is no. We are apparently not willing to pay for them, based on the hepatitis C treatment paradigm today. He noted that the antiviral treatments available today are highly curative. “Although hepatitis C treatments have come down in price, we, as a society, do not pay. We’ve treated only one third of the patients so far. And now, we’re challenged with a $1 million treatment. We need to change our mindset.”

Jane Barlow, MD, MPH, MBA, Senior Advisor, Massachusetts Institute of Technology Center for Biomedical Innovation, countered that in the end, “We will pay. The patients want these innovations. The question is really the sustainability.”

J.D. Kleinke, Medical Economist, agreed, saying that “We as a country demand access, and we demand progress. People will sue for it, have bake sales for it, to force the system to pay for it.”

“If the hepatitis C vaccine cost originally $10,000 per month and it was to be taken chronically, people would not worry much about paying for treatment, said Robert DuBois, Chief Medical Officer, National Pharmaceutical Council. The original price tag of $84,000 for a limited treatment course, however, did set a firestorm of controversy.

There also seems to be a different reaction when speaking to payers one to one, according to Dr. Barlow. She said that in private conversations, payers express less concern than in groups [or in the press]. “When we say we’re spending too much, we seem to be spending more,” she said.

Web image 1With new gene therapies and immunologic approaches, the pricing models and relatively few people treated will force payers and purchasers to take a different evaluation approach to value, said Dr. Kleinke. This may involve a longer view towards future productivity or “value capture.” With this concept, if a drug company charges $100,000 for an intervention that helps produce $1 million in productivity or additional benefit, the drug “captures” 10% of the value of the transaction.

Perhaps our ability to pay for them is a very different question. Until now, pharmaceutical pricing could be explained relative to other similar therapies or compared with the likely costs of future care avoided. It may be that future productivity gained, rather than medical costs avoided, may be a better framework for evaluating the pricing of these next generation interventions.

Budgeting the Impact of Inflectra and a Possible Clinical Benefit for Amjevita

Although the biosimilar marketplace is fairly stagnant at the moment, there was plenty of action at this week’s annual meeting of the Academy of Managed Care Pharmacy held in Denver, March 27–30.

Calculating the Breakeven Point for a Health System

A poster presentation from the University of Pittsburgh School of Pharmacy discussed the budget impact of adding biosimilar infliximab (Inflectra®) to the formulary of a model health system.

In this presentation, the researchers assumed the health system had 1,000 patients taking infliximab; of these, 400 were new prescription starts for the biosimilar’s rheumatology and gastroenterological indications, and the rest were receiving maintenance therapy on the originator product Remicade®. The model assumed 3 levels of discounting on Remicade: 10%, 15%, and 20%. They assumed that 60% of patients with a gastrointestinal indication would start on Remicade, and 40% of new start patients would be given Inflectra. At a new start and maintenance price of $20,430 for the biosimilar, they calculate a breakeven point of 15% discount for Remicade to keep only the originator on formulary.

If they assumed that the biosimilar was given not only to new starts but also to 50% of patients initially receiving Remicade , the breakeven discounting point for keeping Remicade only on the formulary becomes far greater. This model is somewhat conservative, because it assumes no further discounting by Pfizer for its biosimilar product. However, it also does not consider additional levels of rebating by Janssen Biotech.

A Biosimilar’s Noneconomic Benefit?

Although biosimilar manufacturers are constrained in the respect that their product has to not only mirror the structure and clinical effect of the originator biologic, it also cannot be produced in a more convenient form of administration (autoinjector vs. vial/syringe). The expectation is that the biosimilar will not be superior in any way to the originator. In a second poster presentation, Amgen researchers disputed this assertion with their biosimilar version of adalimumab. According to their findings, Amjevita® was associated with less injection-site pain compared with Humira®, based on pain scores given by clinical trial patients with moderate to severe rheumatoid arthritis. They found that pain site scores (based on a 100-mm visual analogue scale) were significantly lower at each 4-week office visit for the biosimilar.

The researchers theorize that the reason for the benefit may be the different excipients used in the biosimilar versus the originator drug.