Is Differential Cost Sharing an Incentive for Biosimilar Uptake in Commercial Patients?

One of the most attractive reasons for easy access to biosimilars was their inherent promise that lower costs would reduce patient out-of-pocket expenses. We’re not alluding to the potential for lower total health spending resulting in reduced plan premiums. That may actually happen over the long term, if biosimilars ever become pervasive. Specifically, we thought biosimilars uptake would allow invaluable medicines to be more affordable to the patients themselves.

Consider the following scenario, which likely has occurred in a few physician offices around the country. Ms. Pamela Townshend is told by Dr. Robert Daltrey, “Pamela, I’m going to write you a prescription for Remicade® for your moderate-to-severe Crohn’s disease symptoms.” (Sorry, I never get tired of hearing this naturally occurring phrase in broadcast commercials.) “We first have to file the prior authorization paperwork for your medication with your plan before you can come in for your first infusion.” Ms. Townshend goes home, goes online, and finds that Remicade is on her plan’s specialty tier—subject to 20% co-insurance. Her plan has a maximum payment of $225 in place, but she will reach that, assuming the drug is covered by the medical benefit (not the pharmacy benefit, which has a $500 deductible). Knowing that she will be taking the drug for some time, she’s alarmed at the annual out-of-pocket cost. Frantic, she phones Dr. Daltrey’s office, pleading for a lower-cost alternative.

Of course, we think, “Biosimilars to the rescue!” And of course, that’s not quite right. Instead, it’s “copay coupon to the rescue.” Even if her plan was one of the minority that preferred biosimilar Inflectra® or Renflexis®, and thus required a lower out-of-pocket payment, Ms. Townshend would still be offered a coupon from Janssen that would reduce her personal costs to as little as $5 per infusion. In fact, she may have been informed of this before exiting the doors of the Moon Medical Group, allaying any panic about the affordability of her medicine. Often, the medical group’s billing office can start the copay coupon application process at the time of the office visit.

Realistically, very few in the general population will worry that Remicade costs the health plan over $3,000 per infusion (for a 60-kg person) when they have to pay over $200 out of pocket. One can make the argument that the patient is even less concerned about the real cost of the medication when their cost share is only $5. Here’s the main point: Every reference biologic manufacturer facing biosimilar competition (except the makers of reference epoetin) has a copay coupon program (Table). The biosimilar manufacturers also provide copay coupons (e.g., Pfizer enCompass or Coherus Complete). In other words, the cost-sharing differential in preferring biologics may play a limited role in patients migrating towards biosimilar use.

Reference Brand Patient Assistance Program Copay Costs to Patient After Coupon
Remicade Janssen CarePath $5 per infusion
Humira Humira Complete $5 per month
Neupogen Amgen Assist 360 $0 to $5 per dose or cycle
Neulasta Amgen Assist 360 $0 to $5 per dose or cycle
Herceptin Genentech BioOncology Co-pay Asssistance Program® $5 per dose
Avastin Genentech BioOncology Co-pay Asssistance Program $5 per dose

To the extent that patients do not have to pay the full, intended cost share and then receive a rebate later from the patient assistance program, they would not be subject to sticker shock.

We sought data on whether virtually all biologic manufacturers provided copay coupon programs; it seems this specific data point does not exist or at least not been published. Holly Campbell at PhRMA pointed me to a study using 2013 data by Pat Gleason and colleagues at Prime Therapeutics, showing that drug coupons were used in 44% of 264,801 specialty prescriptions in their analysis. In the anti-inflammatory area, that percentage was 61%. (Note that this was before the approval of any biosimilar competition.) They also found that these coupons reduce did directly lead to less prescription abandonment.

Michael Kleinrock, Research Director at the IQVIA Institute for Human Data Science, shared with us the latest information they had compiled. He noted that overall, “18% of brand scripts use a coupon” and “there are high profile cases like the autoimmune category where lots of the drugs are couponing to $5.”

Biologic copays
Luke Greenwalt, IQVIA

Copayment use in certain biologic markets can be extremely high. According to Luke Greenwalt, VP, Market Access of IQVIA’s Admundsen division, “If you look at autoimmune, we see 80-90% copay penetration rates for commercial markets—meaning that nearly all patients who can use a card do so.” He explained, “That is driven by competitive pressures, wide proliferation of cards, direct-to-consumer [messaging] that references patient-savings programs, high utilization of hubs/specialty pharmacies who know how to get access to programs, and high copays. In general we also see that the more a patient is asked to pay, the more likely they are to use a copay card—regardless of class.”

In doing a random survey of biologic manufacturers, we couldn’t identify any that didn’t employ a copay coupon program. Highly experienced pharmacy executives like James Kenney, Jr., MS, RPh, President of the Academy of Managed Care Pharmacy, confirmed that they also couldn’t recall any biologic drug makers that don’t offer copay coupon programs today.

Simply because the copay assistance programs are ubiquitous does not mean they are used every time a prescription is written. There is good reason to expect that they will be used more often in the future, not less. It does mean patient cost-sharing differentials for those covered by private, commercial insurance is not yet a real factor in choosing biosimilars. Health plans and insurers that want to increase biosimilar uptake can simply exclude coverage of the reference product. This has not been the case, of course, with infliximab. Payers can use copay accumulators that prevent the copay card savings from being applied to any deductible the patient may owe. Patients don’t really understand how these work, and to be honest, I doubt I could pass a test on them.

The use of a simple, unique biosimilar tier, with relatively low copayments, might help spur patients to ask for the biosimilar. These special tiers have not been implemented, largely because so few biosimilars are available for prescription today.

The Association of Accessible Medicines, in their Failure to Launch White Paper (part 2), stated “patients do not seek out biosimilars from their providers because the difference in their cost-sharing is rarely communicated to the patient or the provider.” I’ll go one step further: Because of copay coupons, the final cost difference to the patient may be far less than one thinks.

New CMS Proposal Lowers Cost Sharing for Part D Biosimilars and Follow-on Biologics

The Centers for Medicare and Medicaid Services (CMS) has released another proposal through the Federal Register, which attempts to correct an anomaly in how biosimilars, follow-on biologics, and brands are treated under Medicare part D.

This can be confusing, because CMS treats biosimilars as generics for the purposes of the part D coverage gap. It now wants to ensure that biosimilars are treated as generics in terms of the coverage gap for only those receiving low-income subsidies. Currently, biosimilars are more expensive for patients in the coverage gap compared with originator brands; the new policy could seriously lower overall cost sharing for patients.

CMS logoUnder the policy in place, patients receiving biosimilar therapy who enter the coverage gap are required to pay the same amount as they would for a branded biologic, rather than a generic. This discouraged the use of biosimilars in the coverage gap. The new proposal by CMS rectifies the situation for those receiving the low-income subsidy.

The Affordable Care Act seeks to reduce and eventually eliminate the coverage gap. The 2017 coverage gap begins once a patient has drug expenditures of $3,700 and ends after $4,950. After exiting the coverage gap, beneficiaries pay 5% of total costs. This seems straightforward, but complicating the matter is a provision to help close the coverage gap by 2020. That refers to the Coverage Gap Discount Program, in which drug makers must provide a 50% discount on brand-name products dispensed to Medicare beneficiaries who are presently in the coverage gap. In 2017, the health plan pays 10% of the costs in the gap (this increases through 2020 to 25%), and the beneficiary pays 40% (which decreases by 2020 to 25%). For generics and biosimilars, patients pay 51% of the cost, as CMS assumed that the prices of these would be far lower than that of brands. This is not the case with biosimilars, however; patients in the coverage gap would actually pay more for a part D biosimilar than for a brand until the coverage gap disappears.

Under the new proposal, CMS would “revise the definition of generic drug at § 423.4 to include follow-on biological products approved under section 351(k) of the PHS Act (42 U.S.C. 262(k)) solely for purposes of cost-sharing under sections 1860D-2(b)(4) and 1860D-14(a)(1)(D)(ii-iii) of the Act. Lower cost sharing for lower cost alternatives will improve enrollee incentives to choose follow-on biological products over more expensive reference biological products, and will reduce costs to both Part D enrollees and the Part D program.” This proposal is specific only to non-low-income subsidy beneficiaries’ catastrophic care (i.e., beyond the coverage gap threshold) and all low-income subsidy beneficiary cost sharing.

The real impact of this new policy on biosimilars will not be known for some time. After a comment period ends in January, implementation can take some time (perhaps around the time the coverage gap is closed). More pragmatically, no part D biosimilar is currently marketed (infliximab and filgrastim are reimbursed under part B). Follow-on biologics, such as insulins or growth hormones, are generally covered under part D, and the policy applies to these agents as well.

Will Oncology Biosimilars Ease US Access Problems?

Among the broad arguments for the rapid introduction of biosimilars is that they will increase patient access to expensive biologic therapies. This may be true theoretically from a patient cost-sharing perspective. If the biosimilar is priced sufficiently less than the originator product, health plans and insurers may elect to prefer the biosimilar and place it on a more affordable coinsurance or copayment tier.

This is not generally the case for the 2 nononcology biosimilar products launched to date. With shallow discounts for the biosimilars, the originator’s manufacturer can simply match the net cost through deeper rebates; the payer would have little reason to change the formulary tiering of the biologic.

The title is sort of a trick question. It assumes that there is a problem accessing oncology agents in our nation today. A 2015 study of 150 oncologists indicates that this is not the case. None of the respondents reported that obtaining Image result for Truxima imageRituxan for their oncology patients (chronic lymphocytic leukemia or non-Hodgkin’s lymphoma) was a problem. The researchers also surveyed doctors in Brazil, Mexico, Russia, and Turkey. In Russia, 12% indicated that access to Rituxan was indeed difficult, as did 17% in Turkey. The researchers also stated that Russia and Mexico, compared with the other countries included in the study, had the greatest share of patients who did not have any insurance. Of course, it must be noted that the cost of Rituxan is far less in the other countries studied, compared with the US.

Another way in which the introduction of a Rituxan biosimilar could improve access is to alleviate present or future drug shortages. Drug shortages are commonly the result of a couple of factors: manufacturing plant slowdowns or shutdowns (often related to quality issues or the need for maintenance); lack of available drug components, such as its active ingredients or excipients; lack of profit driving generic manufacturers out of the business.

According to the Food and Drug Administration, which is responsible for tracking drug supply shortages, Rituxan has not been subject to any supply notifications, nor have any of the biologicsSupply Chain. However, oncology has not been immune from drug shortages (e.g., daunorubicin liposomal injection, leucovorin injection). In a recent post, I emphasized that the need for anything less than a water-tight drug supply record can torpedo and sink biosimilar marketing efforts. In this instance, one can also make the case that oncology biosimilars like rituximab, trastuzumab, and bevacizumab could serve as a stalwart against potential biologic supply issues.

The outlook for the patient’s ability to pay for expensive medications is cloudier by the day. Access to these drugs is not an issue in the US today, but what about a year from now? How will efforts to change the pre-existing exclusion rules alter the landscape for covering any of the biologic products? Then, biosimilars may be in a real position to maintain or improve access.

The first oncology biosimilars are very close: Decisions from the Food and Drug Administration on biosimilars for trastuzumab and bevacizumab are expected in the third quarter of this year. Celltrion expects to file its 351(k) application for rituximab in June.

Patient Cost Sharing for Biosimilars in Part D Coverage Gap Likely to Cause Headaches

The Medicare part D coverage gap is seemingly an enigma for biosimilar manufacturers. Legislative language that seeks to close the coverage gap by 2020 incorporates a huge slip—pairing biosimilars with generics in how the Medicare eligible’s cost share is lowered over time.

An analysis by the health care consultant Avalere shows that Medicare patients will pay much more for the biosimilar drug in the coverage gap than for the innovator product. This may well result in a parallel prescribing situation: innovator products for the Medicare-eligible populations and biosimilars for everyone else.

The problem lies in the structure of the part D program, particularly, the coverage gap, authors of the Avalere paper point out.Image result for donut hole

The Affordable Care Act seeks to reduce and eventually eliminate the coverage gap (or “donut hole”). For this year, the coverage gap spans $3,310 to $4,860 in drug spending. After exiting the coverage gap, beneficiaries pay 5% of total costs. This seems straightforward, but complicating the matter is a provision to help close the coverage gap by 2020. That refers to the Coverage Gap Discount Program, in which drug makers must provide a 50% discount on brand-name products dispensed to Medicare beneficiaries who are presently in the coverage gap. In 2016, the health plan pays 5% of the costs in the gap (this increases through 2020 to 25%), and the beneficiary pays 45% (which decreases by 2020 to 25%). This manufacturer discount applies only to brands, not to generic and biosimilar drugs.

Avalere’s model assumes that the reference product at issue costs $30,000, and the biosimilar is discounted by 25%, which reflects the average discount seen in Europe. If patients A and B take the reference product and biosimilar, respectively, throughout the year, and this is the only agent he or she is prescribed, payments for either drug product will take the patient through the coverage gap and beyond. However, patient B will pay $1,536 (or 39%) more over the course of the year than his or her counterpart, because of the manufacturer’s required discounts on the branded product in the coverage gap.

There are 2 possible policy or regulatory options to correct the situation: (1) require the biosimilar manufacturer to provide coverage gap discounts as well by changing the legislative language or (2) add flexibility for part D providers to add biosimilar tiers, where biosimilars can be offered at substantially lower cost sharing compared with branded products.

Just after the meeting took place, the Medicare Payment Advisory Commission (MedPAC) met and discussed this issue, favoring the first option. MedPAC is the key resource Congress relies on for advice on Medicare financing and reimbursement issues, so there is hope that their recommendation will prompt a legislative fix.

At the Fall meeting of the Academy of Managed Care Pharmacy, this was a looming concern of several pharmacy and medical executives with whom I spoke. They think that, with rapid Congressional action, parallel prescribing is a possibility, to prevent unnecessary patient pain on reaching coverage gap.