Biosimilars Are Supposed to Save Money. Providence St. Joseph Health Has Made That Happen.

Amid extraordinary stresses on healthcare caused by the rising cost of biologics and the COVID-19 pandemic, one large hospital system has lowered its medicine tab with an aggressive, integrated, utilization management approach to the use of biosimilars.

Providence St. Joseph Health, a West Coast network of 53 hospital and 1,085 clinics headquartered in Renton, Washington, worked in advance of biosimilar availability to prime for rapid uptake of these cost-saving replicas of originator biologics, according to a paper by Sophia Z. Humphreys, Pharm.D., M.H.A., Providence’s director of System Pharmacy Clinical Services. Providence achieved savings of $26.9 million in 2019 and 2020 via the use of biosimilars for seven originator biologics.

Sophia Z. Humphreys

“The efficiencies offered by such a program may play a significant role in optimizing affordable access to critical biologic drugs in U.S. health care systems,” Humphreys wrote in a paper published in March in the journal Future Oncology.

Biosimilars, which are competitive versions of brand-name biologics such as Herceptin (trastuzumab) and Remicade (infliximab), have been on the market in the U.S. since 2015.But prescriptions and the savings that are supposed to follow have not occurred automatically. A coordinated approach that involved pharmacoeconomic evaluations, patient education, expedited pharmacy and therapeutics committee drug evaluations, and electronic health records reprogramming was key to the success that Providence was able to achieve, Humphreys wrote.

The program also involved flexibility to capitalize on differences in drug reimbursement between inpatient and outpatient settings and avoid use of biosimilars reimbursed at lower rates.

Biosimilars are generally approved by the FDA long before they become commercially available; but following each regulatory approval, P&T committees at Providence immediately studied the clinical data underlying the FDA decision and repeated that process for every new biosimilar in a therapeutic category, such as biosimilar versions of Herceptin. This preparedness gave them leverage to negotiate with manufacturers for the best terms once the biosimilars were commercialized, Humphreys wrote.

Providence also modified its electronic health records (EHR) systems to steer physicians toward prescribing the preferred biosimilars rather than brand-name “originator products” that they are more familiar with.

“All new prescriptions for originators were guided to the system-preferred biosimilars to promote biosimilar utilization,” Humphreys wrote. The EHR tools were designed to account for differences in practices and reimbursement structures between health care settings. In outpatient settings, for example, more biosimilar choices were needed because of different payer preferences. Conversely, a single, system-preferred biosimilar could be emphasized in inpatient settings.

All stakeholders were notified in advance of policy changes to allow time to adjust and learn, Humphreys wrote. “In preparation for the release of the EHR tools, frontline physicians, pharmacists and informatics specialists were informed of the upcoming changes and the anticipated go-live dates so that they could become familiar with the new tools and options.”

Pharmacoeconomic analysis was used to identify the most cost-efficient biosimilar options. For example, in the 340B program, CMS grants temporary “pass-through” status to new biosimilars, allowing them to be reimbursed at average sales price plus 6%, a payment rate encourages the use of these alternatives to high-cost originator products. But once pass-through status expires after two to three years, biosimilars are reimbursed at average sales price minus 22.5%. The Providence system was designed to anticipate that swing in reimbursement and guide physicians toward the use of biosimilars for which pass-through status was still in effect.

As a result of these efforts, some dramatic reductions in originator drug utilization were achieved, according to Humphreys. Use of Procrit (epoetin alfa) declined 92.75% over the two-year period she examined. Use of Neulasta (pegfilgrastim) declined 78.07% and use of Neupogen (filgrastim) dropped 73.75%.

Several cancer treatment biosimilars were introduced during 2019 and 2020, so their usage trends couldn’t be analyzed over the full two-year period. Still, Humphreys was able to document that the overall spend on three cancer originator products — Herceptin, Rituxan (rituximab), and Avastin (bevacizumab) —declined by nearly 50% ($5.77 million vs. $3.05 million) from January 2020 to June 2020. Biosimilar use for those three biologics climbed from around 10% in January 2020 to roughly 60% by the end of November 2020, Humphreys wrote.

“Innovative formulary management offers the opportunity to reduce drug costs without compromising patient care,” Humphreys concluded. “Due to the high price of biologics, which results in a disproportionate contribution to the total national drug spend, these specialty medications are one obvious area in which cost reductions would make a big difference.”

She said the experience and biosimilar promotion at Providence was similar to the achievements at a few other healthcare institutions for which data have been published, further demonstrating the value of an integrated, aggressive utilization management approach.