David Chen, Pharm.D., on Kaiser Permanente's biosimilar strategy

For David Chen, Pharm.D., keeping Kaiser Permanente's formulary aligned with long-term value is less about balancing competing priorities than recognizing how closely the two are linked. Chen is executive director of Formulary and Drug Use Management for Kaiser Permanente's National Pharmacy program, where he leads formulary and drug utilization management strategy across the health system.

"I guess one is dependent on the other, and they're not necessarily competing," Chen said of the relationship between access to innovative therapies and long-term financial sustainability. He said Kaiser Permanente's clinician-led review process steers the system toward preferred therapies expected to improve outcomes and that resulting savings are reinvested into the system rather than distributed as rebates.

Biosimilars are central to that model, Chen said, functioning much like the generic drug market by expanding access to affordable, clinically equivalent medications and increasing competition. Where many pharmacy benefit manager rebate structures favor branded products over biosimilars, Chen said Kaiser Permanente's approach avoids that tension. "We are looking for a total value, not a rebate-driven model," he said, adding that savings flow both to the organization's bottom line and to members' out-of-pocket costs.

Chen also pointed to policy shifts he believes could accelerate biosimilar adoption, including PBM reform efforts aimed at increasing drug pricing transparency and regulatory changes such as the move away from requiring comparative efficacy trials for biosimilar approval. That shift, he said, has allowed more manufacturers to enter the market, broadening competition and potentially increasing biosimilar uptake industrywide.

Chen will speak at Managed Healthcare Executive’s 2026 Health System Executive Summit held in San Francisco on Oct. 16.

His session is titled ‘Formulary and Drug Utilization Management Strategies for High-Cost Biologics.’

The summit will be his first industry-wide conference since joining Kaiser Permanente in his current role.

In the video, he discusses what he hopes to take back to Kaiser Permanente from conversations with peers across the health care industry as the system works through broader affordability challenges.