Health Plan Sponsors Favoring PA, Step Therapy to Encourage Biosimilars

A survey of health plan benefit sponsors representing employers found that most are using prior authorization (PA) or step therapy to encourage the use of biosimilars, but fewer are considering mandatory switching, cost-sharing differentials, or higher cost-sharing for reference biologics for new patients, according to a report from The Pharmacy Benefit Management Institute.
Allison Inserro
March 11, 2019
A survey of health plan benefit sponsors representing employers found that most are using prior authorization (PA) or step therapy to encourage the use of biosimilars, but fewer are considering mandatory switching, cost-sharing differentials, or higher cost-sharing for reference biologics for new patients, according to a report from The Pharmacy Benefit Management Institute.

The eighth annual Trends in Specialty Drug Benefits report includes findings from a survey of 306 respondents responsible for managing the drug benefit for their organization. The respondents were divided 40% to 38% between large employers (more than 5000 employees) and small employers (5000 or fewer) and are responsible for about 85 million covered lives.

Specialty drug spending is 50% of total drug spend and is expected to hit 60% by 2021, although patients who use specialty drugs make up nearly 5% of commercially insured members (up from nearly 4% in 2015).

The percentage of those respondents having separate cost-sharing tiers for specialty drugs in 2018 rose to 59% from 52% in 2016. Biosimilars typically fell into the second or third tier. In addition, while the use of coinsurance has declined, the use of flat-dollar copayments increased to 48% of plans in 2018, up from 37% the year prior.

Flat-dollar copayments provide better cost stability for patients using specialty drugs, the report said. The average flat-dollar copay amount is $131.

Inflammatory conditions and multiple sclerosis are 2 of the top 5 drug classes with formulary exclusions (the others are hepatitis C, fertility, growth deficiency, and cholesterol).

And while formulary exclusions do not have much support as an effective way to manage drug costs—the number of respondents agreeing with this view dropped 21% from last year—33% are considering adding or expanding their use. Formulary exclusions are typically considered a way to achieve better pricing, typically through discounts or higher rebates. They are also used to limit the use of drugs determined to be of lower overall value when considering both clinical value plus drug cost.

Another cost management strategy, step therapy, is favored by many respondents, with 48% already using it and 27% planning to do so in the next 12 months. The same percentage (48%) are already using PA, and 24% are planning to use it.

Just 17% are currently using mandatory biosimilar switching, and 25% are considering adding it; 58% have no plans to put it in place. Thirteen percent are using higher cost-sharing for new-to-therapy patients starting a reference biologic, and 25% were planning on implementing that as a strategy in the next 12 months; 62% had no plans to do so.

However, small employers were more likely to use step therapy, prior authorization, and cost-sharing differentials than large employers.
 
Of those not planning to begin a strategy to use biosimilars, most said they are waiting for more biosimilars to enter the market and to see more savings before they changed their plan design.

Most of those with a strategy in place said they felt like they have achieved some successes, such as a reduction in costs.

Respondents were also asked about their top goal, after cost management, for managing specialty drugs. Just 2% said their goal was to encourage biosimilar adoption. Other responses included ensuring appropriate use of medication (22%), adherence (11%), ensuring access to medications (7%), and clinical outcomes (6%).
 

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