The report from Trinity Partners details findings from qualitative research with 10 medical directors at US payer organizations, representing plans covering over 100 million commercial and Medicare enrollees in the United States.
Life sciences consulting firm Trinity Partners has released a new report that explores reasons for the slow adoption of biosimilars among US payers.
The report, titled “The State of US Biosimilars Market Access: Payer Perception of Past, Present, and Future Hurdles to Adoption,” details findings from qualitative research with 10 medical directors at US payer organizations, representing plans covering over 100 million commercial and Medicare enrollees in the United States. Trinity researchers conducted in-depth interviews with these directors, exploring their views on biosimilar market trends, market dynamics, and market access expectations.
The report’s authors arrived at 3 explanations for the slow uptake of biosimilars:
The complexity of biosimilar pricing. Contracting among manufacturers, providers, wholesalers, payers, and pharmacy benefit managers (PBMs) is rarely transparent, and while a drug’s wholesale acquisition cost (WAC) maybe public, its net price to a purchaser is not. The report’s authors calculate, based on the Medicare payment limits published by CMS, that the average sales price (ASP) for Remicade (reference infliximab) to payers was $807—substantially lower than the biosimilar, Inflectra’s, WAC of $946.
Furthermore, the so-called “rebate trap,” a term that describes a scenario in which payers receive rebates that increase as performance metrics (such as market share or volume) rise, has a chilling effect on biosimilars. In Remicade’s case, Johnson & Johnson had contracts in place to discourage switching to a biosimilar; if payers switched products, they forfeit valuable rebates on the reference product. Trinity’s report quotes one medical director (all interviewees remained anonymous in the report) as saying, “You don’t want to poke the Humira or Enbrel bear, because they have such huge market shares. It’s not going to be worth it if you lose the discount or the rebate for such a big market share.”
Legal and promotional issues. The report points to the protracted legal battle (which recently terminated in a settlement) between AbbVie, maker of Humira, and Amgen, developer of the biosimilar Amjevita, as an example of “the great lengths to which innovators will go to protect their biologic products,” and notes that reference drug sponsors are also investing in direct-to-consumer advertising in the US marketplace in an effort to build brand loyalty for their products that could keep patients from being willing to switch to biosimilars. In 2015 alone, the report says, AbbVie spent more than $350 million on television, print, and other consumer-directed advertising for Humira.
A lack of clinical confidence. Because many biologic therapies treat chronic diseases, providers are hesitant to switch patients’ therapies if their diseases are well controlled. Thus, payers face resistance if they try to switch patients to cheaper therapies, especially because the FDA has not yet granted interchangeable status to any biosimilars. One medical director told Trinity that “…you can’t mandate the substitution, and if the physician pushes back, we don’t really have any leverage.”
Until interchangeable status becomes a regulatory reality, payers will likely default to allowing currently treated patients to remain on reference biologics.
The report identifies 4 approaches that payers are currently taking toward biosimilars:
Some payers may not take a single approach to all biosimilars, but instead use different strategies among products. The report notes that, in cases in which payers reviewed biosimilars separately, they reported that, if there are clinical shortcomings with a biosimilar that emerge after approval, an overly restrictive coverage policy could have life-threatening implications for patients, particularly in oncology indications. “It could be that the patient dies,” said the medical director of a mid-sized regional payer.
According to the report, most payers surveyed are using either “wait and see” or “passive push” strategies, and many will likely shift to a “prefer and promote” strategy over the coming 10 years. Key changes will include more formularies preferring biosimilars and even excluding innovator products that do not drop their prices, preferring biosimilars or mandating their use for new starts while allowing existing patients to remain on their therapies in the near term, forcing non-medical switching in the longer term, implementing automatic substitution in line with state laws, and shifting toward biosimilars when interchangeable status is granted to these products.
Julie Reed: Why 2024 Is Important for Biosimilars
April 17th 2024Julie Reed, executive director of the Biosimilars Forum, showcases how the biosimilar industry is expected to develop throughout 2024, including major policy changes and hope for continued improvement in market share for adalimumab biosimilars.
Exploring the Biosimilar Horizon: Julie Reed's Predictions for 2024
February 18th 2024On this episode of Not So Different, Julie Reed, executive director of the Biosimilars Forum, returns to discuss her predictions for the biosimilar industry for 2024 and beyond as well as the impact that the Forum's 4 new members will have on the organization's mission.
Alvotech’s Stelara Biosimilar, Selarsdi, Receives FDA Approval
April 16th 2024Alvotech’s Selarsdi (ustekinumab-aekn), a biosimilar referencing Stelara (ustekinumab), gained FDA approval, making it the second ustekinumab biosimilar and second for the company to be given the green light for the American market.
A New Chapter: How 2023 Will Shape the US Biosimilar Space for 2024 and Beyond
December 31st 2023On this episode of Not So Different, Cencora's Brian Biehn and Corey Ford take a look back at major policy and regulatory advancements in 2023 and how these changes will alter the space going forward.
BioRationality: Removing the Misconceptions Surrounding Interchangeability
April 15th 2024Sarfaraz K. Niazi, PhD, outlines the current state of interchangeable biosimilars in the US and policy changes needed to clear up misconceptions surrounding the meaning behind interchangeability designations.
Global Biosimilar Market Projected to Reach $1.3 Trillion by 2032
April 11th 2024The global biosimilar market is projected to surge from $25.1 billion in 2022 to approximately $1.3 trillion by 2032, with a compound annual growth rate of 17.6%, driven mainly by the increasing prevalence of cancer and the cost-effectiveness of biosimilars, as outlined in a report by Towards Healthcare.