The Biosimilar Playbook On PBMs
By Nikolina Janakievski and Cheryl Middleton
This year marks the most consequential loss-of-exclusivity event in history. While the expansion of the adalimumab market first occurred in January with the launch of Amgen’s Amjevita, the healthcare industry had been anticipating the next round of launches allowed by patent settlements on July 1, 2023, prior to enacting any major shifts. Thus far, nine additional products have launched with further additions expected to trickle in throughout the second half of 2023 and 2024. Boehringer Ingelheim’s Cytelzo is the only launched product currently designated as interchangeable; however, several others are actively seeking the label. With a market now saturated with competitors, the details regarding the diverse strategies of both manufacturers and payers and how they plan to manage this new frontier are emerging.
Prior to the July launch of the adalimumab biosimilars, most major payers held their cards close to the chest. There was a general sentiment amongst the PBMs that, at least in the beginning, Humira would remain in a preferred position alongside some combination of biosimilars. It is likely the ambiguity was intentional to encourage further competition amongst the new entrants. After the launch of Amjevita, both Optum and ESI made the decision to add the product to their formulary at parity to Humira, while CVS included Amjevita on formulary disfavored to Humira, and Prime elected not to make the addition.
PRICING STRATEGIES = KEY TO SUCCESS
Pharmaceutical manufacturers of the adalimumab biosimilars have taken a variety of strategies to differentiate their products for payers. Payers have expressed pricing and contracting will be the most important factors in formulary management, so manufacturer’s pricing strategies will be integral in achieving market access.
Today, all major commercial payers have chosen to manage the class by preferring a select number of biosimilars at parity to the originator. Of the four major PBMs, three — Express Scripts, Optum, and Prime — have updated their formularies since the launches in July. Each of the updates included the addition of the only interchangeable biosimilar, Cytelzo, to their formularies, indicating the interchangeable designation will be a significant differentiator for payers in addition to the point of sale. In addition, each of the payers included 1-2 options with the dual-pricing strategy, including both the high and low WAC (wholesale acquisition cost) products. For payers that did not choose to include Cytelzo, Prime made the alternative recommendation of a low WAC product, Hadlima. The formulary choices reflected the need to provide a spectrum of pricing schematics and availability to both high- and low-concentration products to plans.
In contrast, highly integrated delivery networks have taken another approach. The country’s largest have developed the strategy of limiting their formularies to one biosimilar, advantaged to the originator. Kaiser Permanente has switched almost 90% of its commercial and Medicare members from the originator to Amgen’s low WAC biosimilar Amjevita, the first to market, touting an expected savings of $300 million in 2023. The Veteran’s Health Administration (VA) is expected to follow suit upon granting formulary status to the winner of a national contract. The VA is also in the midst of finalizing guidance to require the switch of patients from originator to preferred formulary agent. Unlike traditional commercial payers, the integration of these networks often negates the differentiation of an interchangeable designation. Their success with biosimilars is due to several factors, including a commitment to providing physicians with unbiased data, often developed within the health-system, decision-making uninfluenced by rebate structures, and the alignment of both payer and provider.
Cytelzo has emerged as one of the primary winners of the launch, but will interchangeability prove to be a lasting determining factor, particularly for the low-concentration products that currently make up only a small fraction of utilization? Perhaps Boehringer Ingelheim will manage to stay ahead as their upcoming high-concentration launch is also expected to receive the designation. However, with three additional manufacturers pursuing interchangeability to the original formulation of Humira and five pursuing the designation for high concentration Humira, BI will not hold the monopoly for long.
WHAT WILL CAUSE THE GREATEST UTILIZATION SPIKE?
In the coming months, particularly after any January formulary changes, we will learn what attributes (price, rebate strategy, concentration, interchangeability) elicit the greatest spike in utilization. Despite low WAC products receiving favorable formulary placement from PBMs, plan sponsors have constructed a business model dependent on rebates passed through by PBMs to offset nondrug healthcare costs and extremely high-cost patients. It has yet to be seen which will have the ability to pivot and secure the savings on the front-end. Furthermore, what will come of the products that have not received formulary status at any major payer — Hulio, Idacio, Yusimry, and Yuflyma? How long will they continue to compete, and will there be even further upcoming price concessions in the meantime?
The transition from the originator to biosimilars has long been projected to be a lengthy one, especially since commercial payers have not created any incentive to switch patients, but the competitive pricing biosimilar manufacturers have come to market with may expedite the process. Patient and physician comfort with brands is certainly real. But with data confirming both safety and efficacy of the approved biosimilars, as well as the steep cost reduction, the value of the brand will be difficult to defend.
With the explosion of cost on recently released products and upcoming launches, the success of the launch of biosimilars should evolve into a landscape similar to that of pharmaceutical generics, meaning displacement of branded products from formulary. Who will be the first to take that calculated risk and when (not if) will the others follow?
About the authors:
Nikolina Janakievski is a key account manager at Amplity Health where she works to equip pharmaceutical manufacturers with the data and strategy required to successfully engage federal and commercial markets.
As Head of Consulting at Amplity Health, Cheryl Middleton develops and enhances managed care strategies for biopharmaceutical and medical device clients.
