The Benefit Channel: Pharmacy Benefits and Medical Benefits


An overview of how benefit channels, such as pharmacy benefit and medical benefit, differ and how it impacts utilization of biosimilars and unbranded biologics.

Timothy O’Shea, PharmD, MS: With the biosimilars and unbranded biologics that we have on the market today, some of these are going to span the pharmacy benefit, some are going to span the medical benefit, and some can go through both. Pharmacy benefit being for drugs that are self-administered by a patient, medical benefit being administered by a health care provider—that could be in a provider's office, could be through home infusion or an infusion center. And for the most part, whether a drug goes through the pharmacy benefit or medical benefit, [it is] not going to make a big difference in terms of uptake or use of those products. Between both pharmacy and medical benefit, you’re going to see prior authorizations and medical necessity reviews. You're going to see preferred and non-preferred products. You're going to see some mechanism to drive or manage quantity limits. And when we look at the data of market share of biosimilars, we don't see big differences in uptake of biosimilars from the pharmacy benefit and the medical benefit. On the pharmacy side, the concept of interchangeability could be a little bit more impactful because these are products that are being dispensed by a retail or specialty pharmacy, whereas on the medical side, oftentimes these are purchased through some type of buy-and-bill model... The one wrinkle that you sometimes see on the medical side that you don't see on the pharmacy side is around retro authorizations and retro-billing, which means that a payer is reviewing an authorization after the medication has been given to the patient. So imagine your provider is submitting an authorization for a biosimilar three months, six months after the patient has already received it. And it's not the payers preferred biosimilar. What ends up happening is those are often denied and caught up in a ring of appeals … We don't see that as much in the pharmacy side because it's a real time billing and if something requires an authorization, it's going to be at the point of sale. But on the medical side, we do sometimes run into those, and that's a reason why we encourage use of prospective authorizations rather than retrospective.

Transcript is AI-generated and edited for clarity and readability.

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