Do Skinny Labels for Biosimilars Matter to Payers?

Extrapolation of indications by the Food and Drug Administration (FDA) has been widely accepted by providers, payers, and most patient groups. Yet how to address the approval of a narrow indication list (or skinny label) seems less settled.

Skinny labels

The four FDA-approved adalimumab biosimilars received the agency’s endorsement for a large set of Humira®’s 10 indications. Amjevita® and its brethren were approved for the treatment of moderate-to-severe rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis, moderate-to-severe Crohn’s disease in adults, plaque psoriasis, moderate-to-severe polyarticular juvenile idiopathic arthritis, and moderate-to-severe ulcerative colitis. Missing are indications to treat pediatric Crohn’s disease, hidradenitis suppurativa, and noninfectious uveitis (regardless of severity). When payers are asked whether these missing indications (especially involving other autoimmune disorders) are important for coverage decision making, they will likely agree that it makes little difference to them.

In perhaps the more important biosimilar example, rituximab, the indications are split between cancer treatment (e.g., non-Hodgkin’s lymphoma and chronic lymphocytic leukemia) and autoimmune therapy (e.g., rheumatoid arthritis, polyangiitis, pemphigus vulgaris). Although the dosing rate (50 mg/hr) is the same, Rituxan is given as part of a cytotoxic chemotherapy regimen for patients with non-Hodgkin’s cancer versus methotrexate and methylprednisone for autoimmune treatment. The two rituximab biosimilars (Truxima® and Ruxience®) approved by the FDA do not have the rheumatoid arthritis indication, although Ruxience has received approval for polyangiitis.

The reasons their manufacturers sought the skinny labels could be many, including avoidance of patent infringement, quicker path to FDA approval, or simply limited resources. However, Pfizer did complete a phase 3 trial in RA for Ruxience. Currently, Amgen/Allergan have completed phase 3 trials for both non-Hodgkin’s lymphoma and rheumatoid arthritis for their investigational biosimilar ABP 798. It is possible that the partners could submit a 351(k) biologic license application at the end of Q4 2019 or Q1 2020.

For payers, the presence of skinny labels for biosimilars versus approval for the entire set of indications matters little. In several market research projects we have conducted with managed care medical directors and pharmacy directors, their answers have been consistent: If the biosimilar is approved by the FDA and is covered by the health plan or insurer, then the payer will be far less concerned how the biosimilar is used. The reasons are simple: Payers are gaining comfort with biosimilar use. If the reference product and biosimilar have been demonstrated to be sufficiently equivalent to produce equivalent outcomes, and the biosimilar is less expensive, why overmanage its use?

Further support for this view was published this month in BioDrugs. These South Korean authors evaluated 11 head-to-head randomized, control trials of rituximab biosimilars for use either non-Hodgkins lymphoma or RA. A total of 3,163 patients were included in the meta-analysis. Response rates in the trials for lymphoma and RA were consistently equivalent, and no significant differences were revealed in the formation of antidrug antibodies. Perhaps the best opportunity for managed care organizations to restrict the use of a biosimilar (or biologic) outside of step therapy is the ubiquitous prior authorization (PA). Today, there is little, if no, reason for PA criteria to be different for a reference biologic or its biosimilar(s), other than price preference. In that case, the skinny label has little effect on a payer’s coverage.

A Conversation With Steven G. Avey, MS, RPh

In May 2016, I interviewed Steven Avey, Vice President, Specialty Pharmacy, MedImpact, for the Center for Biosimilars. That conversation speculated on the potential for biosimilars, having only recently experienced the launch of the first biosimilar in the United States, filgrastim-sndz. At the Academy of Managed Care Pharmacy’s 2019 annual meeting last week, I sat down with Steve once again to gain his perspectives on changes in the biosimilar environment.

Biosimilars Review & Report: Congratulations on winning the Academy of Managed Care Pharmacy Foundation’s Steven G. Avey Award! This is sort of a double honor, first having the award initially named after you, and then many years later, winning it yourself!

Steve, you’re considered one of the real thought leaders in managed care pharmacy. What do you consider to be the main challenges facing your colleagues today?

Steven Avey, PharmD: Thank you. There are many real challenges today. First of all, we have the potential for drug rebates to go away. It’s clear that something is going to be done (and we don’t know what that is), and it could apply not only to Medicare Part D, but possibly Medicaid and commercial. We will need to wait and see.

Steven Avey, MS, RPh

Another challenge relates to the Administration’s emphasis on reducing list prices for drugs. This will not only influence the industry, but managed care pharmacy as well.

That challenge is part of the ongoing concern about the cost of specialty medications (and continuing price increases), and the greater call from payers for a better understanding of the value that they’re getting from these medications. Are the people who are taking specialty medications actually getting real benefit?

BR&R: In addition to payers, employer purchasers and others have been requesting a better understanding of the value of specialty medications. This has been sought for 10 years or more. Are we any closer today in getting a grip on this?

Avey: I think we are. Many PBMs are getting more involved in data management regarding these medications. The better we get at analyzing the medical and pharmacy data together, the closer we will get to understanding the value of these specialty medications.

To give you an example, a PBM today is basically reviewed and assessed on what its financial picture looks like—are you able to bend that specialty cost trend? But if you don’t know what these specialty agents are really doing for the patient population, how can you tell if covering them is the right thing to do? In order for us to know that, we have to evaluate the medical and pharmacy data together and focus on the total cost of care of that individual member. Over time, you can say that our costs are either going down or not. Then, we can ask the question, am I using the right agent or should we be using those very expensive drugs for these patients?

Given the lack of the medical and pharmacy data, we just don’t know. That’s one of my greatest frustrations.

BR&R: Let’s switch to biosimilars. Do you believe that if the rebate safe harbor is removed for Medicare, payers will also stop seeking them?

Avey: Yes. It will definitely trickle into the commercial side. I can see a day in the not too distant future where we don’t rely at all on rebates. It will be a new world focused almost solely on list price reductions.

BR&R: Will that give biosimilar manufacturers an edge?

Avey: It will be a boon for biosimilar makers! When the rebate goes away, then all that remains is the list price. That will be a huge advantage for biosimilars.

BR&R: Well, if I’m a reference biologic maker, whose R&D costs were paid off a decade ago and whose profit margin is extremely high, I can still lower my WAC price considerably to compete with the biosimilars, right?

Avey: They can, but they will have to compete with three or even five biosimilars who do not have to spend millions of dollars on advertising or promotions like the innovators do to keep their brand’s exposure and visibility high. The innovator drug maker will do everything possible to avoid losing that high market share.

Now, I haven’t seen much of this in print, but payers are angry—they’re angry at these 10% to 20% increases in costs each year from the innovator drug manufacturers. As a payer, if a biosimilar is available, why would I want to support that innovator maker, who has dramatically raised costs for the last 10 years? That gives biosimilar manufacturers the advantage: “Hey, I’m the new guy helping you to reduce costs. How about supporting me instead?” I think many payers will act on this message.

BR&R: In our conversation in April 2016, that was the gist of what you said.

Avey: And I haven’t changed my mind.

BR&R: I asked, how soon are you going to drop the AbbVie contracts (when there was some expectation that biosimilars would be available before 2020), and you said, “As soon as humanly possible.” And you weren’t the only one who said this.

Avey: Absolutely. And now the timeline has been extended to 2023. This just made us all the more angry, because this is because AbbVie filed 100 patents on Humira®, which overwhelmed what the BPCIA was intended to address. The result is that AbbVie is going to make $16 billion a year (and more each year) for 4 more years before we’ll be able to see some competition for their market.

BR&R: Genentech (Roche) is coming out with subcutaneous forms of Herceptin® and Avastin®. Will these introductions change the way you position the biosimilars for these two cancer agents, when they are finally launched?

Avey: We’ve dealt with this 15 years: It’s really no different than what we’ve seen occur with conventional agents. Consider a sustained-release form of a brand that is approved around the time the generic for the immediate-acting formulary is launched. You look at the new product and ask, what does that premium in pricing buy us? Is it a site-of-care advantage? Maybe, but does it really offset the cost of using that more expensive agent? We generally decide to cover the lower-priced (albeit it not as convenient) dosage form. With biologics, the cost differential between the new agent and the biosimilar is very large, and there is very little advantage for the new subcutaneous formulation.

BR&R: We are seeing something similar playing out right now with pegfilgrastim. Most of the market has moved to the use of Amgen’s on-body injector OnPro®, and the biosimilars are being launched using prefilled syringes. To the extent that payers are interested in eroding OnPro’s marketshare, assuming the price difference is substantial, OnPro does represent a bit more patient convenience. Some payers may be thinking this way. To the extent that this will happen may predict some similar effect for the trastuzumab and bevacizumab markets.

Avey: You have to remember that payers are receiving a lot of criticism that we’re not doing a good job of supporting the biosimilars. Quite frankly, the biosimilar drugs that have been approved up until now are really covered under the medical benefit. We have a little trickle that can be covered under the pharmacy benefit. Payers have only so much bandwidth. They know that under present conditions, a new biosimilar has to build market share from scratch. Some have said, “You know, it’s not worth the effort. We have other fish to fry. We’re not going to get too excited yet about these products.”

We have an HMO client that did an amazing job moving market share away from Neupogen® to Granix®. But they own their prescribers and they can easily analyze the combined medical-pharmacy spend. They saw a dramatic lowering of expenditures.

BR&R: Are you expecting biosimilar products for trastuzumab and bevacizumab to be managed under pharmacy?

Avey: We see those drugs under the pharmacy benefit now. Remember that those drugs have a greater utilization than the other biosimilars that have been launched to date. I do think that they will attract a lot of attention. And if the rebates do go away, that takes the market share question right off the table. The biosimilars will do quite well.

BR&R: The four-letter suffixes: The FDA recently came out with an updated guidance, saying that the agency will no longer consider adding four-letter suffixes to previously approved reference agents. However, they will continue to add suffixes to newly approved biosimilars and interchangeable agents.

Avey: Everybody is trying to figure out what’s next here. When we look at biosimilars’ pharmacokinetic information, one biosimilar is going to be somewhat different than another. I don’t think it will be an insurmountable problem, but just a headache. We’ll just have to be more in synch with our specialty pharmacies to ensure that they stock and dispense this one biosimilar with this one four-letter code.

BRE&R: Have we made any progress from an educational standpoint here? Do providers and patients still think that a product with a four-letter code is not comparable to the originator brand? What is the level of discomfort today?

Avey: I’ve watched this carefully over the last year. I don’t think there will be huge angst from the payer. The prescribers and to some degree the patients that will need more educating to make them feel more comfortable. We will need better educational materials and communications for them. The situation is really no different than when we started instituting the generic substitution laws. We heard a lot of claims that docs will never prescribe generics, patients will never take them. We had to do a lot of educating to alleviate their fears, and to help prescribers understand that these drugs work like the brands work. At the end of the day, I don’t think that this will be a long-term challenge.

Payers Focus More on a Biosimilar’s Price Than on Clinical Data: A Retrospective

It can be fun to go back in time! That’s the case with an old column I wrote for the Center for Biosimilars, just after Zarxio was approved. Here, I reprint a portion of the column, with some additional commentary.

A RAND study from 2014 boldly predicted $44.2 billion in savings from biologic drugs over the 10-year period ending in 2024. The study’s authors believed that upwards of 20% of the savings would come from the anti-TNF inhibitors alone.

These savings would salve the wounds of payers and purchasers suffering annual double-digit increases in specialty pharmaceutical costs. It has kept them up at night. Worries about the affordability of medicines have kept patients and their families on edge. All of this light focused through the magnifying glass, refracting to a point, has heated up attention on the first biosimilars in the 351(k) approval process. US health plans, pharmacy benefit managers, and insurer executives have been anticipating the push to biosimilars and their possible savings since the implementation of the Biologic Price Competition and Innovation Act in May 2010.

Expectations have pent up that biosimilars will begin to relieve the pressure building from the annual double-digit specialty drug trend. If payers are given 20% and 25% lower net prices, they will likely jump at the opportunity to save millions of dollars, if they can. That means putting net pricing ahead of clinical data when making coverage decisions (assuming no significant immunogenicity differences, as payers and providers would consider this a powerful disincentive).

Payers may presuppose that the Food and Drug Administration (FDA) will do its utmost to evaluate the equivalence in outcomes and pharmacokinetic/ pharmacodynamic characteristics of the agent. The real question is whether payers care enough about the clinical data to make extrapolation a potential issue if the FDA does not. They may well leave that decision to the prescribers, taking a more laisse faire approach, as they did in the very early days of generic drug introductions (before the days of automatic generic substitution).

Today’s Commentary:

Well, the verdict seems to be in, both from payers’ and providers’ perspectives. Payers are leaving it up to the FDA, and in some cases, without any clinical data in patients (just phase 1 trials in healthy volunteers), to determine the appropriateness of biosimilars in several disease states.

Proprietary market research, as well as individual conversations with payers, support that they have crossed a critical point of confidence—the safety and effectiveness of using a biosimilar instead of a reference product is no longer much of an issue. Any question about extrapolation, similarly, is no longer deemed clinically relevant in approved biosimilars. This may not be the case with a future product. We must also await experience involving FDA approvals of products with “skinny labels” or limited indications. In these cases, we don’t know yet whether plans and insurers will discourage use of a biosimilar for the reference product’s full slate of applications (privately, they have told me they wouldn’t discourage this use, assuming similar dosage forms).

However, payers hunger for biosimilar choices. Not necessarily to add to their formularies, but to force originator manufacturers to halt further price increases. They want the opportunity to worry less about one biologic agent for which next year’s expenditures will jump—and by how much exactly? The few biosimilars approved in the US have forced WAC pricing (and ASP pricing) down. We are expecting the same for the latest market entrants, like pegfilgrastim.

As for RAND’s predictions? Not enough has happened from 2014 until now to make one think that cumulative savings of $44 billion is realistic. It is possible, however, if one considers the near-term launches of trastuzumab and bevacizumab biosimilars. The one-year savings from adalimumab biosimilars may top $8 billion by itself (out of total revenues exceeding $20 billion prior to the introduction of these biosimilars).

It should not have even been this close.

Biosimilar News Bytes to Wrap up 2016

A Shrug of the Shoulders on Savings Payers are becoming increasingly pessimistic that they will be seeing substantial savings with biosimilar products in the near term. The results of several market research projects we’ve conducted point to payers’ assumption that the 15% discounts seen today with Inflectra® and Zarxio® introductions will be mimicked by manufacturers of new biosimilar and follow-on products (assuming they cross the FDA approval and patent litigation barrier). Risking these introductions, the payers assume that makers of the originator products will simply match the offer, enabling the payer to take the path of least resistance and stick with the originator. But this means that the predicted tens of billions in savings to be gained by the biosimilar introductions will remain a mirage, at least until several competitors enter the market for the same originator.

Trastuzumab Biosimilar Data Published The Mylan and Momenta partnership announced that the phase 3 trial data on its biosimilar version of trastuzumab, previously announced at major medical meetings this year, has been published in the Journal of the American Medical Association. The HERITAGE study confirmed the safety and efficacy of MYL-1401O.

Final Guidance Released by FDA The Food and Drug Administration finalized and released its guidance “Clinical Pharmacology Data to Support a Demonstration of Biosimilarity to a Reference Product,” which describes how biosimilar products may be listed as “not similar,” “similar,” “highly similar,” and “highly similar with fingerprint-like similarity.” The latter, it is assumed, will be used as a basis for considering interchangeability designations. The guidance is a belated tool to assist drug makers with proving pharmacologically the similarity of their molecule to the originator.