A Payer’s Preference for Biosimilars, Interchangeability, and Incentivizing Providers to Use Biosimilars

In the last few weeks, we’ve seen a hail of biosimilars-related news, some of which significant, more having limited impact.

Building upon the success of its infliximab biosimilar uptake, Magellan Rx Management announced June 4 that it will extend its medical pharmacy program to the new oncology biosimilars (i.e., rituximab, trastuzumab, and bevacizumab) when launched. Magellan Rx had announced that its program saved 34% when it shifted utilization to infliximab biosimilars. This action was announced after UnitedHealthcare decided that it would prefer the reference biologic agents rather than the biosimilars starting in July, which caused much reaction.

In early May, the Food and Drug Administration (finally!) released its final guidance on interchangeability. Although there were no surprises in this document, it does lay out a definitive path for gaining an interchangeable designation. Other than Boehringer Ingelheim’s intention to seek the label for Cytelzo®, no other biosimilar manufacturer has publicly stated interchangeability as a goal. Boehringer cannot launch its biosimilar adalimumab, regardless of its interchangeability status until June 2023, so the strategic importance may be longer term. Switching biosimilars (for a reference product or for another biosimilar, with or without this designation) may be a more pressing question.

The Biosimilars Forum has launched an educational campaign on how aligning incentives in Medicare part B can save billions of dollars through the enhanced use of biosimilars. The industry group’s proposal includes using a shared savings model in which providers can receive savings bonuses when using lower-cost biosimilars. In addition, it is lobbying to increase provider reimbursement for prescribing biosimilars. This would be in the form of a greater percentage add-on rate in addition to the average sales price (ASP) paid for the therapy. These two actions could offset the current reimbursement disincentive, where providers bill higher amounts for prescribing higher cost (and likely higher rebate) drugs, currently at ASP + 6%. The organizations also call on the Center for Medicare and Medicaid Services to reduce patient out-of-pocket costs when a Part B biosimilar is used.

The Association of Affordable Medicines has also been focused on the issue of biosimilars in Part B medications, as well as on the potential implications of the US–Mexico–Canada Agreement. Passage of the agreement (still awaiting ratification on Capitol Hill) could have the unintended consequence of extending exclusivity for reference biologics; all other federal regulatory efforts are moving towards cutting delays in access to lower-cost biologics. The trade agreement therefore negatively affects the biosimilar industry, which frankly, cannot survive additional barriers erected in its path. The Association is hoping that harmonizing Mexico’s, Canada’s, and America’s biologic exclusivity period can be modified before the treaty is ratified.