Deborah Abrams Kaplan

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Cigna members who switch from Cosentyx (secukinumab) or Remicade (infliximab) to an approved biosimilar will receive a $500 debit card, per a policy introduced in July by the insurance carrier. It’s marketed as an effort to lower prescription drug costs through the Shared Savings Program. Cigna is alerting treating physicians and the 7,000 affected patients individually. 

Offering physicians $500 to prescribe biosimilars over name-brand drugs would clearly be unethical and likely illegal, says Leonard Fleck, Ph.D., professor at the Center for Bioethics and Social Justice at Michigan State University. But it is potentially ethically acceptable to offer the funds to patients under certain circumstances, he says. In the larger picture, financial incentives for using certain pharmaceuticals may contribute to wasteful administrative costs and does not benefit the patient, in Fleck’s view.

But Cigna estimates that in the short term, its clients will save at least 10% of Remicade’s cost for each patient who switches, with savings growth as biosimilars gain traction. “Biosimilars can save patients, their employers, health plans and the healthcare system billions of dollars over the long term,” Steve Miller, Cigna’s chief clinical officer, told 

Cosentyx is used to treat psoriasis, psoriatic arthritis, nonradiographic axial spondyloarthritis, and ankylosing spondylitis. Remicade is a treatment for arthritis, psoriasis, Crohn’s disease and ulcerative colitis. Patients on Remicade can switch to Avsola (infliximab-axxq) and Inflectra (infliximab-dyyb). Cosentyx doesn’t have an approved biosimilar so if patients switched, it might be to different biologic, such as Taltz (ixekizumab).

The offer could be seen as ethical if Cigna is respecting patient autonomy in deciding the best treatment. “We ought to respect patient choices in that regard,” says Fleck. However, “these drugs are called biosimilars for a reason. They are not perfect replications of the drugs they’re intended to replace.”

Biosimilars aren’t likely to negatively affect most patients, Fleck says, but it might be problematic for some. “You’re encouraging patients to make a medical decision about something they would not fully understand, and they would look at it as an economic transaction. There is a potential problem there.” The switching is arguably for Cigna’s benefit. “Then again, you can see from the perspective of a larger consumer group — everybody who has insurance through Cigna — that it could bring down overall healthcare costs for pharmaceuticals, and that’s not a bad objective,” says Fleck.

A person’s economic situation also has to be considered. For someone who is well off, a $500 debit card may not be worth switching medications, especially if the current one works well. But for someone who is economically disadvantaged, $500 is a lot of money. “That comes closer to being a coercive bargain,” says Fleck.

Patients on long-term treatments are usually told to consult with a physician before making any changes in their regimen. In this case, physicians would be consulted because a new prescription is needed. “But patients will put pressure on physicians to write the new script, which may or may not have medical consequences,” Fleck says.

Deborah Abrams Kaplan writes about medical and practice management topics.

Articles

Copays and formulary tiers involve financial incentives to use certain drugs. But is Cigna’s offer of a $500 debit card in a different category?

Is Cigna’s $500 offer to Patients for Switching Ethical?

Increased digital access in healthcare was already in the works when COVID-19 hit. But the pandemic turbocharged the trend, showing providers, payers and PBMs how they could improve service and efficiency by using more digital tools. 

, vice president of industry relations and government affairs for CoverMyMeds, spoke at the 2021 Pharmacy Benefit Management Institute® Annual National Conference today about some of these tools and what they can do.

Patients are looking for innovative partners to help them identify and afford the best treatment, Diehl-Boyd said, and COVID-19 complicated patients’ abilities to receive vital medications. During the pandemic, approximately 20% of patients, a majority with chronic conditions, experienced delays receiving their medications because of shortages or restrictions, according to results of a 2020 CoverMyMeds survey.

“We do know that even pre-COVID-19, patients were making considerable sacrifices to afford medications and therapies,” Diehl-Boyd said. Results of another CoverMyMeds survey showed that more than one-third of patients went without treatments or medications to pay other bills.

One of the COVID-19 success stories was rapid adoption of telehealth by providers and patients. “After COVID-19 hit, telehealth soared, peaking at a 6,000% increase compared (with) 2019,” Diehl-Boyd said. “That innovation helped patients be able to acquire the care they needed for chronic and acute conditions.” This was especially important for patients who already had trouble with adherence and access to care due to social determinants of health (SDOH) issues.

Diehl-Boyd outlined five areas of future change:

 She noted the growth in the high-deductible health plans and growing enrollment in Medicaid and ACA plans.

Telehealth and other digital transactions soared because of the pandemic and the relaxation of regulations. Although use of telehealth has slacked off some, Diehl-Boyd said "telehealth is more than temporary trend." 

Pharmacists will build on their role administering vaccines and become more central to the delivery of healthcare

Healthcare organizations are tackling the 

ocial determinants of health and also looking for long-term solutions.

Providers are continuing to take on risk and are looking to reduce the financial risk fee-for-service exposure.

Diehl-Boyd also outlined the effects of two rules designed to bring out interoperability and "data fluidity" in health care, the Office of National Coordinator's 21st Century Cures final rule and CMS' final rule on data. The rules will force payers and providers to share information and equip patients with more information, particularly with respect to cost and coverage. "Health plans should be prepared for a radically empowered consumer," Diehl-Boyd said.

The pandemic allowed pharmacists to expand their roles by administering vaccines and testing for COVID-19. “We will see pharmacists as a growing part of the care continuum team,” Diehl-Boyd said. “They’ve continued to show their value through the pandemic.” More than two-thirds of pharmacists took on new responsibilities during the pandemic, such as checking with patients for adherence and refills, finding ways to help patients save money and starting prescription home-delivery programs, according to a 2020 CoverMyMeds pharmacist survey.

Diehl-Boyd said she anticipates that PBMs and payers will focus on ways to transform member experiences beyond government regulations, providing more consumer-driven products. They can use technology to identify patient healthcare risks to develop prevention and intervention programs for a more holistic view of patient treatment. This potentially could result in fewer duplicated services. By using data to innovate for more holistic care, PBMs and payers can improve retention and loyalty.

The Biden administration is focused on addressing inequities, Diehl-Boyd said during her presentation. Several federal departments are focused on evolving the healthcare landscape to introduce better transparency and address SDOH. That dovetails with the rise in prescription deliveries, which help patients without transportation or who live in a pharmacy or clinician desert. The administration also released its drug pricing plan last week.

True interoperability is a goal at federal and state levels. With adoption of newer standards such as the National Council for Prescription Drug Program Real-Time Prescription Benefit Standard, the E-Prescribing Standard, the Prior Authorization Standard, and work happening under HL7’s Da Vinci project, the community is seeing greater peer-to-peer exchange in surfacing clinical information so that clinicians, care team and plans can have clinical information in real time, Diehl-Boyd said.

“We’ve seen this evolution in technology to bring about real time, clinical and administrative data exchange. We will continue to see that evolution tracking to payer-to-payer exchange, payer-to-consumer exchange, provider-to-provider exchange and provider-to-payer exchange,” she said.

Diehl-Boyd, who has been working in this area of healthcare for 25 years, said, “Sometimes I feel like I’m still talking about same things I was talking about 10 years ago.” She thinks the healthcare system is on the right path and wants to see changes in healthcare costs. However, “we can’t sustain the costs that we have in our systems. I’m hopeful that as we take a holistic view of patients, that we can bring down the cost of total care and really focus on the individual needs of the patient,” she said.

Government regulations are designed to encourage data fluidity in healthcare, which could "radically empower" consumers, said Kim Diehl-Boyd, CoverMyMeds vice president of industry relations and government affairs, at the 2021 Annual National Conference of the Pharmacy Benefit Management Institute.

Digital Tools, New Standards Will Change Healthcare and Pharmacy Access

The world of oncology treatment may have just course corrected — slightly. The change? The FDA is signaling to pharmaceutical companies a shift from maximum tolerated dosing (MTD) to optimal dosing.

What’s at stake for pharmaceutical companies is lower doses that could affect pricing and income. Drug developers may also need to tweak clinical trial designs. For patients, a new framework based on optimal dosing may mean fewer side effects and same efficacy. For payers, there is the prospect of lower drug costs.

The FDA sent a strong signal about optimal dosing in the first half of 2021 when Amgen sought approval for its KRAS inhibitor Lumakras (sotorasib) as therapy for adults with non-small cell lung cancer whose tumors have a KRAS G12C genetic mutation and who have received at least one prior systemic therapy. The FDA granted approval in late May 2021 but required the pharmaceutical company to conduct a post-approval randomized clinical trial comparing the approved dose of 960 mg daily with a 240-mg dose. 

The FDA’s director of the Oncology Center of Excellence, Richard Pazdur, M.D., also stated during 

’s recap of the 2021 meeting of the American Society of Clinical Oncology that the agency wants other pharmaceutical companies to conduct randomized phase 2 trials such as this prior to registration studies. The goal would be for phase 1 trials to identify the range of doses to study in later trials, instead of just identifying the MTD. This move toward closer study of dosing is a win for the Optimal Cancer Care Alliance (OCCA), which has been pushing for several years for the medical community to find ways to avoid relying only on the MTD as a dosing strategy. 

Optimal dosing used to be called interventional pharmacoeconomics, explains Mark Ratain, M.D., OCCA treasurer and director of the Center for Personalized Therapeutics at the University of Chicago. The group has been pushing stakeholders to develop new oncology dosing regimens. \The strategies include lowering dosing, less frequent dosing, shortening the duration of treatment and, in some cases, substituting one therapy for another.

The oncology community has been slow to accept the optimal dosing concept. Clinicians prefer to adhere to the prescribing guidelines, according to Ratain.

“Oncologists believe in the dogma that more is better,” Ratain says. “The FDA finally said more is not better.”

Although the post-approval dosing trial for Lumakras was a new mandate, there are other obvious candidates for testing lower doses, Ratain says. Those include Opdivo (nivolumab), Keytruda (pembrolizumab), Imbruvica (ibrutinib) and Tecentriq (atezolizumab), for which, Ratain says, “doses are excessive.”

Challenges exist for lowering doses in a manner supported by data from trials. The biggest issue involves paying for the trials. “Pharma certainly is not going to fund them,” Ratain says. “The NIH (National Institutes of Health) has not shown any interest in funding these trials. The people interested in developing new drug treatments aren’t interested.” But NIH would be a reasonable funder, Ratain says. Research of this kind has been funded by the United Kingdom’s National Health Service. Ratain says the trials would pay for themselves because of the savings in drug costs, which would benefit payers and healthcare systems such as Kaiser Permamente.

FDA approval of Lumakras was contingent on a trial testing lower doses. It could usher in a new era of optimal dosing instead of the maximum tolerated dosing.

Optimal Dosing Gets a Look 

The good news is that generic drug prices are continuing to decrease. As for the rest of the news about generics and biosimilars and their practices, it is complicated. For some classes of drugs, generics remain a price-lowering, cost-saving success. For others, prices are so low that manufacturers may leave the marketplace, creating an opportunity for monopoly pricing. For still others, there is an untapped opportunity for cost savings. “You cannot look at the generic drug and biosimilar markets as homogenous marketplaces,” says Martin VanTrieste, president and CEO of Civica Rx, a nonprofit company formed in 2018 to manufacture generic drugs.

For many generics critical to patient care, there are no more savings to squeeze out, says VanTrieste: “If we continue to do that, they will go away.” Some manufacturers already produce them at a loss, he adds. But for drugs just coming off patent, “there’s a great opportunity to drive the price down to a more affordable level.” Generic manufacturers need to file extensive FDA abbreviated new drug applications (ANDAs) and potentially fight off patent lawsuits from brand-name manufacturers first.

Then there are biosimilars, with a more extensive FDA approval process requiring clinical trials, and a more expensive manufacturing process. That lemon is not yet squeezed.

Almost 40 years ago, the Hatch-Waxman Act, known formally as the Drug Price Competition and Patent Term Restoration Act, ushered in a new era at the FDA, speeding up approvals and creating a pathway for approving generic medications. Before Hatch-Waxman, less than 20% of prescribed drugs were generic. Generics now comprise 89% of all prescriptions, according to the Association for Accessible Medicines, a trade group for the generics and biosimilars industry. The FDA has approved some 16,000 generic drug applications since passing the Hatch-Waxman Act. Amendments to the law in 2012 that created a user fee program for generic approvals have also been a major factor in getting more generics on the market.

Generics saved the U.S. healthcare system $293 billion in 2018 alone, according to the FDA, and various other tallies show the savings over the past decade as totaling almost $2 trillion. Although prices have shifted over the years, the Express Scripts overall Price Prescription Index showed generics prices falling 37% between 2014 and 2018, while branded drug prices increased more than 60%. According to 46brooklyn Research, a nonprofit drug pricing research organization, generic drug prices have fallen this year compared with last, notwithstanding some predictions that the pandemic would have the opposite effect. 46brooklyn says driving the overall trend are falling prices for Concerta (methylphenidate), Colcrys (colchicine), Suboxone (buprenorphine-naloxone) and Tamiflu (oseltamivir suspension).

Not surprisingly, supply and demand have an influence on generic drug pricing. An FDA report showed that if the generic has no competition, its average manufacturer price — the price that wholesalers pay to manufacturers — is 39% lower than its brand-name equivalent. If there are two generic competitors, the prices are 54% lower and with four, 79% lower.

There’s a common misperception that a brand-name drug’s price drops when a generic is coming on the market, says Leigh Purvis, director of health care costs and access at the AARP Public Policy Institute. Instead, the brand usually increases its price or stays the same. “That makes it even more important to switch to the generic, because there’s an even greater price differential,” she says.

One reason for the brand increase is that companies sometimes raise the price of the brand-name drug in the months before the generic is available. As a result, the generics may end up with higher pricing than that of the brand-name drug, according to an analysis by GoodRx.

In the generic marketplace, about one-third of generic drugs lose money, one-third break even and one-third make money, according to VanTrieste. “The ones that are losing money still make those products to absorb capacity in their manufacturing plants to spread overhead around. It’s better to lose a little than lose a lot.”

But as soon as they can produce a money-making product, they’ll stop manufacturing the
money-losing one. That can cause drug shortages. Avoiding drug shortages is one of the reasons seven health systems and three philanthropies teamed up to start Civica in 2018.

“Civica produces on a cost-plus basis,” VanTrieste says. “Our prices are completely transparent and every member in Civica pays exactly the same price.” The organization works with other manufacturers to produce 41 generic medications in multiple dosage forms, with a goal of manufacturing 100 drugs by 2023.

Drug pricing in general is a black box, Purvis says, with little to no transparency in what it costs to produce drugs and how pricing is determined. It’s also difficult to pinpoint why prices increase. Prices may be driven up because of higher ingredient pricing or a shortage of ingredients, or prices are raised because the product would not be financially viable to produce otherwise. These and other factors affect generic availability and pricing.

The FDA’s Drug Efficacy Study Implementation (DESI) and Unapproved Drugs Initiative programs offer an optional abbreviated FDA approval process for generics that entered the market before 1962. In return for the approved application, the manufacturer is awarded a monopoly on marketing the product. Although initially companies did not abuse the program, some eventually increased prices to resemble branded pricing, according to VanTrieste. 

Generics competitors can file an ANDA, but he says it takes about a year to get the paperwork together and another year for the FDA to process it. That gives the initial manufacturer an artificial monopoly for at least two years. Some manufacturers find ways to extend that monopoly, exclusively contracting with all active ingredient manufacturers, for example. Companies making DESI-approved products sometimes lower the product price when competitors are gathering their FDA application data, so they won’t have a profit motive. “Knowing that will happen, other generics don’t enter those markets,” VanTrieste says. One example of the jump in pricing is vasopressin. In the hospital sector, vasopressin costs rose almost 700% between 2014 and 2018, after getting DESI approval in 2014.

More than 500 drugs without patent protection have no generic competition. “Because they (are for) small populations, there may not be enough incentives to create a generic version. They have a monopoly forever because the generic manufacturers aren’t attracted to that product,” Purvis says.

When the patent life runs out, companies may look for ways to continue their monopoly. “If anything, companies are getting more innovative in finding ways to extend their monopoly,” Purvis says. AbbVie obtained more than 100 U.S. patents for manufacturing processes and other issues with Humira; the initial patent expired in 2016. The company mounted legal defenses against companies that wanted to launch biosimilars to Humira for alleged secondary patent infringement for the drug’s formulation or delivery. Six biosimilars for Humira have been approved by the FDA, but none of them will be on the market until 2023 because of legal settlements with AbbVie.

Some companies change their brand-name drug formulations in attempts to maintain market share. That works for some manufacturers, says David Ridley, Ph.D., a professor and faculty director for health sector management at Duke University’s Fuqua School of Business. But “payers and pharmacy benefit managers have been tougher on the drug markets by declining to put drugs with small tweaks on formulary. The games that drugmakers have tried in the past have been thwarted by some of the managed care practices,” he says. There are exceptions, including Teva Pharmaceuticals’ Copaxone, a daily injection for patients with multiple sclerosis. Teva changed the 20-milligram daily injection to a 40-milligram dose, injected three times a week. “They were able to hold on to much of the market and hold off competitors,” he says.

In June 2020, New Jersey’s attorney general and a multistate coalition sued 26 drug companies, alleging conspiracy to artificially inflate the prices of 80 topical generic drugs. The lawsuit claims a violation of federal and state antitrust and consumer protection laws. This is one of at least three price-fixing lawsuits filed in recent years. “It’s not worth it (to collude) because you’re going to get caught and your company will be embarrassed and have to pay a massive fine,” says Ridley. “When you defraud the federal government, you face potentially enormous penalties. They can threaten to exclude you from doing business with the government, which is a major customer in healthcare.”

Biosimilars are the equivalent of generics for monoclonal antibodies and other large-molecule medications. But the biosimilar market and the dynamics of competition on price have been slow in developing for many reasons, including the “patent thickets” that drugmakers have used to protect their brand-name products and to keep biosimilar competition at bay. Since 2015, 29 biosimilars have been approved for nine reference products and 20 are on the market. “Biologics are living organisms and are substantially more expensive” than other drugs, says Purvis. “A lot of what’s coming on the market are products that won’t face generic competition in the way we’re used to seeing it.” 

The biosimilar market has been slow to grow, partly because the FDA was slow to give manufacturers guidance, she says. Although costs are generally lower for generic biosimilars compared with the brand, prices are still high. If a drug is $100,000, dropping it by 90% still means a $10,000 bill. “It’s not like where people can get their $5 generic,” Purvis says. The highest discount she’s seen for a biosimilar is 30%. That may change as more biosimilars come on the market and there’s more competition. 

FDA approvals for biosimilars require the manufacturer to complete a drug trial. “Although that is costly and painful for the biosimilar manufacturers, it’s good for them in the long run because it helps persuade providers and patients that the products are truly safe and effective,” says Ridley. Longer term, the FDA might relax those requirements, especially if technology allows molecular comparisons to show they’re sufficiently similar. Physicians and other providers currently don’t have much of an incentive to select a cheaper biosimilar when administering drug. Value-based payment models and other payment changes could alter the incentive so use of biosimilars would be to their advantage.

Is there more juice to squeeze from the generic lemon? Yes for biosimilars. Yes to artificial monopolies. Yes to those on extended patent protection. But no to standard generics. “Payers have done an exceptionally good job at driving patients toward generics when available,” Purvis says.

Low prices and some gaming of regulations can drive out competitors and create monopolies that allow generic makers to jack up their prices. Experience has shown that it often takes multiple generics to achieve the promised-for downward pressure on prices.

Deborah Abrams Kaplan

Articles

Is Cigna’s $500 offer to Patients for Switching Ethical?

Digital Tools, New Standards Will Change Healthcare and Pharmacy Access

Optimal Dosing Gets a Look

Generic Drug Price Tags: Too High. And Too Low. Competition Can Help Create an In-Between.