In the last few weeks, we’ve seen a hail of
biosimilars-related news, some of which significant, more having limited
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.
In part two and the conclusion of this interview, Molly Burich, MS, Director, Public Policy: Biosimilars and Pipeline, speaks to Boehringer Ingelheim’s progress in Cytelzo interchangeability studies, its plans for the product in Europe in the face of several adalimumab biosimilars launches in the EU, and also the complexity inherent in CMS’s plans to move biologic agents from part B to part D coverage.
BR&R: Boehringer Ingelheim indicated that it started the study on Cytelzo interchangeability last year. What’s the progress on this effort?
Burich: The trial is continuing to progress. It’s a high bar and a big commitment. We will certainly publicize relevant information in due course.
We feel that for Cyltezo, in particular, interchangeability is an important component. It may drive switching. The study will also show a complement of clinical data around that topic. We hope to have information to share in the future. [Editor’s Note: The VOLTAIRE-X study, which will evaluate the effect of switching between Cyltezo and Humira in patients with plaque psoriasis, has an estimated primary study completion date of March 2020 and full study completion of July 2020, according to ClinicalTrials.gov]
BR&R: Speaking about Cyltezo, I have a question about the marketing floodgates being opened in the EU for adalimumab biosimilars. At least 4 are being launched in the EU after the October 16th patent expiration. Does Boehringer Ingelheim plan to join the fray?
Burich: Boehringer Ingelheim had planned to bring Cyltezo to patients in the EU. Due to the patent litigation with AbbVie in the US, we will not commercialize Cyltezo in the EU. Boehringer Ingelheim will continue all activities for our biosimilar in the United States. We are committed to making Cyltezo® available to U.S. patients as soon as possible and certainly before 2023.
PART B TO PART D TRANSITION BY CMS
BR&R: Medicare has indicated that it will move many Medicare part B drugs into part D. To what extent will this affect biosimilar access and utilization?
Burich: It is a very hot topic these days. We have some pretty significant concerns on conceptually around what it means for moving from part B to part D. The key reason revolves around the access question, including patient cost sharing.
A move from part B to plan D could mean that patient cost sharing may jump significantly. We know that part B beneficiaries have wraparound or Medigap coverage to protect them from cost sharing issues. In part D, there is not such protection. Aside from the biosimilar question, the move from part B to part D really has to be explored and discussed a lot more to understand how we can ensure that patient access is not reduced through high cost sharing. That needs to be ironed out as it applies to any part B drug before we can speculate whether this is an opportunity for a biosimilar. Time will tell what that really looks like.
Last month, CMS released the Medicare Advantage guidance allowing for step therapy for part B drugs. That could be a potential opportunity for biosimilars, if we know how some of the access concerns will be addressed. We just don’t have the full picture at this point.
BR&R: Is it possible that this move to part D might spur some payers to create biosimilar tiers? These would require lower cost sharing for patients compared with reference biologics, assuming contracts with the reference manufacturer permits it.
Burich: In my opinion, we’ll need access to more biosimilars before we see a lot of that activity. It’s hard to foresee what big benefit design changes will be coming, but it’s certainly possible. We’ll need a mature market in the US before that will happen.
BR&R: The devil is in the details with this switching issue but there’s also an access issue. Plans can make midyear formulary changes, this would then apply to biosimilars and reference drugs covered under part D.
Burich: This is an important issue. The latest guidance that we saw from CMS, which is now a couple of years old, allowed positive formulary changes. Adding the biosimilar to a formulary is always allowed mid-year. The question involves removing an originator product or changing its tier.
CMS has said that those situations would be reviewed on a case-by-case basis. These rules preventing negative formulary changes midyear are there to protect patient access. It will take CMS some time to iron out what the process looks like for this type of potential formulary change midyear. For now, we’ll have to rely on CMS’s case-by-case review
BR&R: In general, payers do not consistently fund and manage self-injectable specialty drugs in the same way. In some cases, they cover these agents under the pharmacy benefits, medical benefit, or even both. Further, they can be managed under either benefit as well. However, it seems we are moving toward pharmacy management of these agents. How does this affect biosimilar access, if at all?
Burich: There will be more benefit design changes once we have a more robust biosimilar market. More specifically, when we have pharmacy benefit biosimilars.
We’ve mentioned CMS’s intention to move more of these products from part B to part D. It is possible that commercial plans will have different benefit designs and treat injectables differently than Medicare does. We want to make sure that biosimilar or not, the access piece is really at the center of those changes; it will not be beneficial to the biosimilar market if this move causes significant patient access issues (e.g., actual access to this drug or big swings in cost sharing). All of those things will be equally problematic for a biosimilar as they are for an originator, so we want to make sure we have our eye on the access component.
BR&R: Health and Human Services Secretary Azar and FDA Commissioner Gottlieb have loudly stated their desire to improve biosimilar patient and market access. The Biosimilar Action Plan was released earlier in the summer to that end. What is the one aspect of the Biosimilar Action Plan that appeals most to manufacturers like Boehringer Ingelheim?
Burich: The aspect of education, tackling both proactive education and countering misinformation is very critical from our perspective. We’d like to see more materials moving forward that focus on switching and on interchangeability. We haven’t really scratched the surface on those topics from an education standpoint.
The reality is that the FDA has an important voice and bringing validity to educational materials is so critical for patients, physicians, and health plans as well. We hope that the FDA will stand by its public commitment to release more reading materials, more videos, more web info, etc. It is especially important at this juncture; we are seeing misinformation and a lack of clarity on certain things.
IS THE BIOSIMILAR ACTION PLAN ACTIONABLE?
BR&R: One of the biggest barriers to biosimilar access is the patent thickets. The rebate trap problem is another story. What power does HHS have to clear out the patent thickets? Or is this an area that can only be addressed by Congress?
Burich: This is the most difficult part of the Action Plan, because it is unclear who can truly implement change and what change might be realistic. We have to protect true innovation that’s important to all stakeholders.
At the same time, there’s no question that patent litigation is the leading barrier to biosimilar accesss. Some makers of branded pharmaceuticals have constructed patent thickets so that they could sustain prolonged, expensive litigation against competitors, while stifling competition. Humira is the prime example: More than 15 years after the molecule was approved , no biosimilar is being marketed – in the U.S. What the answer is and which government agency can effect change has yet to be determined.
BR&R: That change won’t come quickly, in any case. Whether enacted by Congress or the Office of the Inspector General, which may have to reinterpret the safe harbor statutes, this may only first apply to the second-generation of biosimilar agents, beyond 2021 perhaps. It seems likely that this will be a very deliberate process.
Burich: I do believe Commissioner Gottlieb is thinking about both how to get more products launched in the short term and also the long-term vision of a sustainable biosimilar market. That is such an important part of the problem.
We were very happy that the FDA had their public hearing. The FDA panel asked a lot of thoughtful and probing questions to the individual speakers. We are fully supportive of the Action Plan and its individual components. If we saw all of those things come together and start to see action, including finalizing the interchangeability guidance and providing more education, the biosimilar market would be in a far better place.
BR&R: We say that biosimilar manufacturers can make their products attractive to payers, but payers need to play a positive role here. Commissioner Gottlieb has said that payers have to help in this process by taking the long-term view, by not automatically sticking with the reference product because of the rebate revenue. They have to be open to using the biosimilars and nurturing the health of the industry. Is there anything else the biosimilar manufacturer can do to convince payers to make this market viable?
Burich: Certainly, biosimilar manufacturers have to approach these payer negotiations and conversations with competitive and innovative contracting approaches. That does not just include pricing but also how do you drive volume and true savings to both payers and patients. That kind of innovative approach is necessary, because we know it’s a challenging market.
Biosimilar manufacturers have to look at the whole picture as well. That means providing targeted patient/physician services to really help ensure that the switching experience is seamless for the patient and the physician so that biosimilar utilization is not viewed as something very disruptive.
The Centers for Medicare and Medicaid Services (CMS) has decided drugs covered under Medicare part B may be subject to step therapy, if so desired by Medicare Advantage plans. UnitedHealthcare has become the first to publicly implement step therapy policies for these drugs. However, biosimilar step therapy is not the typical utilization management tool that industry executives are used to seeing.
Traditional step therapy or step edits for prior authorization policies are typically used to require the use of an effective, low-cost drug class before trying a more-expensive treatment. For example, a plan might have a step in place before a patient can receive Humira®, such as requiring documented failure on other disease-modifying anti-rheumatic drugs, like azathioprine or methotrexate. This makes very good sense when supported by practice guidelines or treatment pathways, based on solid supportive evidence.
For biosimilar manufacturers, the perspective on the revised CMS policy, seems to imply trying the biosimilar before receiving the branded originator product. This biosimilar step therapy would make very little sense. A doctor would not be practicing evidence-based medicine if he or she prescribed Remicade® to a patient after failure of Renflexis®. There is no evidence to show that the biosimilar will work in a patient who did not receive adequate clinical benefit from the reference product (and vice versa). Similarly, there is no information to show that a patient who has an adverse effect while taking Remicade will not have that adverse effect after injecting with Renflexis (or vice versa). In other words, after failing one, a new mechanism of action should be tried, not a product with a very similar structure. This may be a different argument, if a subcutaneous form of infliximab was introduced, and this might be reason to step the infusible form through this drug.
In United’s announcement, they are clearly seeking to increase biosimilar utilization, as designated preferred part B agents, at the expense of Remicade use, the nonpreferred agent. Therefore, it may make more sense that new patients will have to use a biosimilar before being prescribed the reference product. Step therapy in this case is almost an aside.
Ironically, the Department of Health and Human Services has also expressed its desire to move part B agents like self-administered injectables to part D. This may not apply to infliximab, as it is given as an in-office infusion. Should this be the case, plans will have many pharmacy tools at their disposal beyond biosimilar step therapy.
In other biosimilar news…Fresenius Kabi has signed an agreement with Abbvie to delay its adalimumab biosimilar market entry in the US until 2023. The manufacturer is currently trying to secure European approval for the product. A 351(k) application has not yet been filed by Fresenius in the US.
For 2019, the Trump administration has proposed transferring some products reimbursed by Medicare part B to part D coverage. Additionally, it will allow Medicare Advantage firms, which manage a small but significant percentage of Medicare beneficiaries’ care, to negotiate prices and utilize some pharmacy benefit tools to control costs.
Some of these tactics are a bit late to the party, as commercial insurers and health plans have been employing them for years. To the extent that an injectable treatment can be managed through the pharmacy benefit rather than the medical benefit, the drug can be easily subjected to prior authorization, step therapy, quantity limits, and other tools routinely used.
For the few available biologics and their corresponding biosimilars, these infusions are covered in general on the medical benefit today. Infliximab, filgrastim, and pegfilgrastim are still subject widely to buy-and-bill scenarios. Yet, Neulasta® (pegfilgrastim) is already covered under a medical specialty benefit (fifth tier) for beneficiaries of two sample Medicare Advantage plans (HumanaChoice and Aetna Medicare Choice). In both of these plans, Neulasta is subject to prior authorization requirements. UnitedHealthcare covers it under the medical benefit, generally under its highest copayment or cost sharing tier. In contrast, Zarxio® is on the preferred or second tier for United’s Advantage 3-tier and Small Group plans, also under the medical benefit.
These agents, administered via office- or clinic-based infusions, may also be available through specific distribution channels, like specialty pharmacy. In contrast, self-administered agents like adalimumab may be distributed to patients through specialty pharmacies only, which are part of the managed care machinery.
Insulin is still considered a “transitional drug.” Like adalimumab, it is self-administered. However, it is already covered by Medicare under the part D benefit, at least when used outside of an insulin pump. Therefore, part D providers, like commercial plans, have preferred and nonpreferred insulin products, negotiate for pricing, and may use other pharmacy benefit tools.
The Administration has not yet announced which drugs it will from part B to part D. It is unlikely though that the Centers for Medicare and Medicaid Services will jump beyond the experience of commercial plans and insurers. Until other biosimilars are made available for prescription, the latest CMS attempt to control costs may not directly affect biosimilar manufacturers.
Reimbursement of biosimilars for Medicare Part B beneficiaries has long been an issue for biosimilar manufacturers. The Medicare Payment Commission recognized this problem in its own recommendations to Congress earlier this year, and the Centers for Medicare and Medicaid Services (CMS) asked for comments on its 2018 proposed payment policy.
The Biosimilars Council, in a letter to CMS, complained that instead of the current policy of using a single J code (and average sales price) for payment for noninterchangeable biosimilars (based on the same originator product), a unique code should be issued for each. Under the current policy, the Council argued, incentives for prescribing biosimilars are limited, which discourages the development of “a robust biosimilars market in the United States.”
In a press release, Christine Simmon, Executive Director of the Biosimilars Council, stated, “Shifting biosimilar reimbursement to unique codes will help facilitate the creation of a thriving market and greater, more affordable, patient access to these medicines. This is a critical opportunity for policy to have a positive impact on the future viability of the biosimilars market.”
A letter sent to CMS Administrator Seema Verma, signed by Citizens Against Government Waste, CVS Health, Express Scripts, FreedomWorks, National Association of Chain Drug Stores (NACDS), National Taxpayers Union, Pharmaceutical Care Management Association (PCMA), and Prime Therapeutics, stated “Under the current policy, all biosimilars for a single reference product are combined into a single ASP… This policy is a significant departure from how CMS treats other drugs in Part B, as no other blended codes exclude the original reference product from the blended code with its follow-on counterparts. The letter also asserted that the opportunity for expanded patient access to these innovative therapies, be fully realized,” only if the policy is changed.
Announced in March, the Centers for Medicare and Medicaid Innovation (CMMI) planned a far-reaching pilot that would affect how physicians are reimbursed for administration of part B drugs. Apparently, the pilot was too far a reach, as it elicited strong criticism from nearly all stakeholders. On December 15, the federal government announced that the plan was now withdrawn.
The centerpiece of the program was a change in the way physicians are reimbursed for purchasing and administration of the medications. Under the pilot, which was to extend to most Medicare participating medical practices, clinicians would be paid at the average sales price of the drug plus 2.5% (presently at ASP + 4.3%) in addition to a flat rate of $16.80. From a biosimilar industry standpoint, this was objectionable, because higher priced drugs (presumably originators) would be subject to greater reimbursements to doctors, which ran counter to the concept of value-based alignment.
As reported in the New York Times, a spokesperson for the Department of Health and Human Services stated, “The proposal was intended to test whether alternative drug payment structures would improve the quality of patient care and the value of Medicare drug spending. While there was a great deal of support from some, a number of stakeholders expressed strong concerns.” The spokesperson concluded, “The complexity of the issues and limited time available led to the decision not to finalize the rule at this time.”
It is not known that the transition to a new administration may have also played a role, but the aggressive timeline set by the Centers for Medicare and Medicaid Services left little time to attempt adjustments to the pilot, accept public comments, and publish final rules.