Stan R. Mehr

Patients see drug couponing as a way to lower or avoid cost sharing on brand-name prescription drugs. Payers view drug couponing as undercutting their pharmacy benefit design. Pharmaceutical companies see drug couponing as the key to greater sales, especially when they are in nonpreferred formulary positions (i.e., after generic competition is launched).

In a value-based pharmacy benefit design, the payer assigns medications that are highly effective, lower cost, or both to lower formulary tiers, to make them attractive to plan members. On the other hand, agents that are deemed to be of less value are placed in higher tiers, or even excluded from coverage. Simply, lower cost sharing means greater incentive to use and better sales for the industry. However, drug couponing, which is now ubiquitous, remove the patient incentive to use higher value drugs (and the disincentive to use lower value agents).

In the case of biosimilars versus originator medications, drug coupons offered by the manufacturer of Enbrel

, for example, actually make it less expensive for the patient to purchase the originator than the biosimilar, assuming a lower-copay biosimilar tier. That is, unless Sandoz, the maker of the approved etanercept biosimilar, matches Amgen’s couponing program. In that case, there would be incentive or disincentive for either product, from the patient’s perspective.

In dealing with couponing programs, payers have 3 options: (1) let things be and hope that if patients have little cost sharing perhaps adherence will improve overall, (2) ban the use of couponing by members (in other words, don’t allow network pharmacies to accept them), or (3) exclude from coverage any drug for which coupons are offered (this would be a lot of drugs today).

, couponing has boosted prescriptions for branded medications by greater than 60%. For the nation as a whole, every copayment coupon adds up to $120 million over the first 5 years after a generic drug is introduced. For the manufacturers of 85 medications that first faced generic competition between 2007 and 2010, couponing boosted spending anywhere from $700 million to $2.7 billion over a scenario in which couponing did not exist.

To preserve the value of biosimilars, payers will have to carefully mull their limited options. Excluding coverage of originator products that have copayment coupons may not be practical, because of the delicate situation regarding switching of biosimilars and lack of an interchangeable designation, especially for patients on established therapy. Banning the use of copayment coupons seems like a more reasonable option for payers, but one that may cost them members, particularly in today’s heated competitive market. 

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Payers will have to carefully mull limited options.

Drug Couponing: Better or Worse for Biosimilars?

The winds of change are blowing, and they are blowing throughout the health care industry. Value-based health care has forced several systemic changes, including movement from fee-for-service based reimbursement to alternative models, including shared savings and risk sharing.

One of the most powerful blasts has been the discussion over outcomes-based and risk-based contracts for pharmaceuticals. These are being discussed more commonly at trade and professional meetings. Outcomes-based contracting sounds, at this point, like the way things are heading, but the devil is in the details in this form. Many payers are taking a wait-and-see attitude, specifically waiting for the results of large, leading-edge organizations’ efforts to see if they are successful. They may be waiting a long time, though. In order to do a truly transparent return-on-investment analysis, one has to know how the contract was structured and the extent of the pharmaceutical company’s risk. Yet health plans and insurers, and drug manufacturers, have been highly protective of this proprietary information, unwilling to give the competition any hints about contract specifics.

However, one type of alternative reimbursement model that has been the subject of a bit less press is the 

indication-specific pricing (ISP) contract

. Under ISP, the payer and pharmaceutical partner sets different levels of pricing for each indication or for patient subpopulations eligible for treatment. It is a logical step in alternative reimbursement models, because a medicine that is approved for multiple indications may not be as effective for each indication. Think of it this way: why should the health system pay the same price, on a per-dose basis, for a drug that is only 40% effective in treating psoriasis versus 75% effective in relieving the symptoms of psoriatic arthritis? Or a cancer drug that is far more effective in treating early stage colorectal cancer than in advanced stage non—small cell lung cancer?

The result is a misalignment between value of the intervention and its cost to patients, plans, and society. Indication-specific pricing is not without precedent. One classic example is the use of sildenafil as a erectile dysfunction medication (Viagra

for pulmonary arterial hypertension. Players like Express Scripts are looking at ISP for gaining value in cancer agents with multiple indications.

How can ISP be used in biosimilar introductions? Any of the key anti-inflammatory originator agents have multiple indications, and biosimilars have been tested generally in one of them in clinical trials. The US Food and Drug Administration (FDA) may decide further to extrapolate to other indications based on the totality of evidence in terms of a biosimilar’s structural, pharmacologic, pharmacodynamics, and mechanism of action. What if, to help clinicians gain comfort with the biosimilar and increase rapid uptake, the indication for which the medication was clinically tested was priced at a lower level than for other indications? It is highly unlikely that the maker of an originator product will want to match this pricing scheme.

Although ISP has several challenges, including the big one—how to identify the indication for which the drug was prescribed&mdash;it is not impossible. The winds of change may be blowing this way. 

Value-based health care has forced several systemic changes.

Indication-Specific Pricing and Biosimilars

Partners Mylan and Biocon announced on November 9 that their 351(k) application for a 

 has been filed with the US Food and Drug Administration (FDA). This filing of MYL-1401O marks several firsts: the first biosimilar application for this product, the first biosimilar filing for an agent that directly treats cancer, and the first 351(k) filing for the Mylan—Biocon partnership.  

Mylan president, Rajiv Malik, stated in a press release, “Our trastuzumab biosimilar is already being sold in 11 developing markets, including India, and we look forward to bringing the product to market in the US and Europe upon approval.” Biocon’s CEO, Arun Chandavarkar, added, “The submission of our proposed biosimilar trastuzumab with the FDA is an important milestone of Biocon and Mylan's joint, global biosimilars program and demonstrates our commitment to provide access to high-quality and affordable biologics to patients across the globe.”

The Mylan—Biocon partnership aims to develop and market 6 possible biosimilar molecules. Mylan has exclusive commercialization rights in several regions, including North America, Australia, and Europe.

The global market for Herceptin stands at 

, and it is a stalwart revenue producer for Roche. Mylan and Biocon will likely face additional competitors fairly soon, as Celltrion and Samsung Bioepis have already filed trastuzumab applications with the EMA, and Amgen is moving quickly to develop their own version.

 that have been filed or approved have been for supportive care (epoetin, filgrastim, and pegfilgrastim. Additional oncology therapeutics are being investigated, but not yet filed with the FDA, and include rituximab and bevacizumab. 

Mylan Files Application for First Herceptin® Biosimilar

Sometimes I can be excused for taking important details for granted. Scientists, medical professionals, and health systems, however, do not have that luxury. Two recent studies reminded me of classic gaps, in not only broader biosimilar discussions, but in pharmaceutical testing and use overall. For the purposes of this discussion, the actual study results are less the point than the objectives of the investigators. 

With biosimilars, as with any conventional agent, a good deal of research is done using commercial or working-age populations, and unless the target indication is for pediatric use, testing on younger patients is rarely done. On the other hand, testing on older populations is extremely important, especially for diseases that are more likely in the older population (and in some cases, patients over 75 years of age). For example, older patients may have renal impairments that could interfere with drug clearance, they may exhibit differences in drug metabolism, and the possibility exists that drug interactions in the elderly may more likely result in clinical manifestations. 

French investigators sought to better understand how the biosimilar agent epoetin zeta (available only in Europe) worked in patients younger and older than 70 years for the treatment of chemotherapy-induced anemia. The result of this observational study was that the tolerability and effectiveness of an epoetin biosimilar for treating chemotherapy-induced anemia was equivalent in patients at least 70 years old compared with younger patients.

Another key component of some biosimilar products (self-administered injectables) that is often glossed over is the injector itself. These devices attempt to make the patient as comfortable as possible and dosing simple, and in general, the pharmaceutical manufacturers do an excellent job of engineering these devices.

In a market research study sponsored by Biogen (maker of a biosimilar etanercept brand in Europe called Benepali), German and Swiss investigators sought opinions from patients with rheumatoid arthritis about their preference for the Benepali autoinjector or Enbrel’s autoinjector. Needless to say, Biogen’s injector came out on top. The most important attributes of either injector, they said, were (in ranked order), ease of operation, ease of grip, and intuitive use.

These basic issues often get lost in the broader discussion of biosimilar uptake and utilization. For example, what is the benefit to payers, patients, or physicians of an interchangeable biosimilar that must be injected, if no one is comfortable with the injector device? 

It can also be argued that accurate characterization and analysis of a biosimilar prior to clinical trials should predict its equivalent effect to the originator product in older and younger patients alike. In any case, this subgroup analysis is very important in comparative clinical trials and should not be glossed over. 

Sometimes the actual study results are less the point than the objectives of the investigators. 

Stan R. Mehr

Drug Couponing: Better or Worse for Biosimilars?

Indication-Specific Pricing and Biosimilars

Mylan Files Application for First Herceptin® Biosimilar

Two Reminders in Biosimilar Discussions