Four Opportunities to Tap into Biosimilar Cost Savings


The policies and approaches healthcare leaders should promote.

Drug vials
Thomas E. Henry III

Thomas E. Henry III

Adrianne Spencer

Adrianne Spencer

Biosimilars, or biologics that are highly similar to an FDA-approved innovator biologic (the branded product), represent a total future savings potential of $54 billion between 2017 to 2026. However, actualizing these savings will require adoption at a much higher rate than we have seen to date.

While some health systems have fully adopted the use of biosimilars, others have been slower due to a range of obstacles.

Below, we highlight strategies for overcoming the four most common barriers to adoption.

1. Improve education

Until prescribers and pharmacists gain confidence in biosimilars, we cannot expect broad utilization. An important early step is for pharmacy leaders to provide prescribers and pharmacists with educational tools and training, such as those created by the FDA and professional societies. These tools should address common misconceptions (e.g., whether biosimilars are inferior to innovator biologics-they aren’t!) and highlight key information about approvals, efficacy, and safety. 

Here are a few areas of focus:

  • The rigor of the FDA approval process for biosimilars;

  • The breadth of randomized controlled trials demonstrating similar efficacy and safety compared to innovator biologics; and

  • The array of randomized controlled trials demonstrating the safety of switching from an innovator biologic to a biosimilar without impacting therapeutic outcomes.

2. Develop shared understanding of naming conventions

Previously, biosimilars could be identified by the four-letter suffix appended to the end of core product names (i.e., trastuzumab-anns is comprised of the core name “trastuzumab” and the four-letter suffix “-anns”). However, under recent updates to the FDA guidance for nonproprietary naming of biologic products, all biologics should receive a four letter suffix on the end of the core name, despite electronic health record systems’ inability to accept these four letter suffixes.

Related article: The State of Biosimilars in 2019

Further complicating matters, biosimilars also receive a branded name in addition to the nonproprietary core product name. This branded name is unrelated to the innovator biologic’s brand name (i.e., Herzuma, Kanjinti, and Ogivri are all biosimilars of Herceptin). These naming conventions make the process of identifying and selecting a biosimilar complicated. Therefore, great care should be taken by health systems to address the best way to identify and enter biosimilars in EHR and prescribing systems.

One way of addressing this is to use an “agnostic” name for physician ordering, followed by the selection of the “preferred product” in the pharmacy module, based on approved substitution policies. For example, a physician may prescribe a patient “infliximab” then the pharmacy module selects the health system preferred infliximab product (infliximab or one of its biosimilars, infliximab-abda or infliximab-dyyb).

3. Create therapeutic interchange and substitution policies

Currently, no biosimilar has been approved as an “interchangeable biosimilar,” a designation   that would allow it to be substituted for an innovator biologic without prescriber consultation.

However, health system P&T committees have the authority to create interchange or substitution policies for biosimilars. These policies should answer the following questions in accordance with state law (which can vary widely):

  • Does the substitution require prescriber consultation?

  • Is the policy restricted to the biosimilar’s approved indications, or should use be extrapolated to all the innovator product’s indications?

  • What is the potential impact on dosing?

  • What guidance is there for opting out of biosimilar substitution?

4. Awareness of changing reimbursement policies

Biosimilars are consistently priced 15% to 30% below that of the innovator biologic, but in the past, convoluted reimbursement policies meant that these lower prices did not always translate to lower post-reimbursement costs. To combat this and incentivize biosimilar use, recent policy changes are steadily addressing and resolving disparities in Medicare reimbursement between biosimilars and innovator biologics. One example is the removal of biosimilar exclusion from the Medicare Part D coverage gap discount program in the Bipartisan Budget Act of 2018. Now, both innovator biologic and biosimilar manufacturers must provide a 70% discount.

While policy changes are beginning to take effect, one remaining reimbursement hurdle remains: some major insurance providers may only cover biosimilars if the patient has a contraindication, intolerance, or an ineffective response to the innovator biologic.

Innovator biologics continue to be cited as preferred agents and, unfortunately, payer reimbursement is often a major driver in the use of biosimilars in health systems.

Ultimately, health systems need to stay up-to-date and aware of changing reimbursement policies for biosimilars to provide the lowest cost care without compromising quality of care.

Advancing the biosimilars era

Several competing biosimilar versions of bank-busting biologics are expected to reach the market in the coming months, including Rituxan (rituximab), Avastin (bevacizumab) and additional Herceptin (trastuzumab) biosimilars.

These new entrants present a massive opportunity for hospital systems to manage cost and reinvest savings in other value-added areas, but these savings can only be realized if the above hurdles are cleared.

To do this, pharmacy and health system leaders must seize the opportunity to guide discussions in their organizations about these challenges and present solutions to improve the adoption of biosimilars.

Thomas E. Henry III, MBA, RPh, CPh is a clinical pharmacy advisor at Lumere and actively practices as a pharmacist. He has held 17 interim executive and director level positions where he was responsible for leading pharmacy operations at some of the top institutions in the country. Adrianne Spencer, PhD is a pharmacy researcher at Lumere. She has worked in cancer research for six years.   

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