Payers could save with biosimilars if they stop chasing rebates

Biosimilars are at an inflection point, and the healthcare industry needs a fundamentally new approach to realize their promise of lowered costs. Going forward, the ability of biosimilars to lower overall costs will hinge on three things: therapeutic interchange, smarter purchasing, and integrated technology that keeps patients from falling through the cracks, said Arpit Patel, senior vice president of trade relations and supply chain at MedImpact.

During an interview, Patel said the chief obstacle is that many payers remain attached to rebate revenue, which he says means payers are leaving money on the table. By modeling the net cost of biosimilars against rebated brand pricing, he said payers consistently find they come out ahead on costs, and they have greater price predictability.

Since 2015, more than 90 biosimilars have received FDA approval, generating more than $56 billion in healthcare savings, according to a recent report from Cencora. On average, the average sales price ASP decreased by 52% within five years of the first biosimilar launch, according to the most recent Samsung Bioepis U.S. Biosimilar Market report. Samsung Bioepis found that in more mature markets, biosimilars can achieve price reductions of up to 82%.

Patel said that MedImpact has begun presenting employers with what he called “net cost opportunity assessments” to demonstrate the savings, and he said reception is growing. “More payers are receptive to it,” he said. “There’s more of an acceptance and understanding now of what the challenge is in the ecosystem.”

Focus on the patients

More importantly, Patel said that the use of biosimilars helps to lower the costs for patients. Members often pay deductibles and copays based on a drug’s list price and not the discounted net price that plans actually pay after rebates.

“Rebates and the discounts are really meant for the plan, and they won’t necessarily translate down to the member in all cases,” he said. “If you want to drive affordability for the member, then you should be basing their cost share off of all the negotiated discounts that are out there,” Patel said. “That's the fundamental problem we’re trying to address.”

Additionally, MedImpact, he explained, has partnered with Anda, an affiliate of Teva Pharmaceuticals USA, to create unbranded biosimilar versions of Stelara and Humira. The biosimilars are available from the digital pharmacy Birdi Inc. at a rate of 95% less than Stelara.

“We’re not artificially trying to set the price but want to show deeper discounts. That’s always been one of the optical challenges in the PBM space: they show bigger discounts by artificially setting pricing or increasing pricing, equating to higher rebates. Our focus is entirely around the lowest price for the member and the bottom line price for the plan.”

Patel said MedImpact focuses on therapeutic interchange as part of the PBM’s formulary strategy but with the patient at the center. Because only about 2% of patients account for roughly 50% of specialty drug spending, the population needing active management is small but high-stakes. “It’s not significant overhead,” he said. “It’s a very small subset of patients on high-cost products that we can move to a lower-cost product by engaging them directly.”