When Will Patients Benefit From Deepening Infliximab Discounts?

Seth D. Ginsberg, co-founder of Global Healthy Living Foundation, told The Center for Biosimilars®, “Currently the benefit of rebating and pricing of all infused drugs goes to the payers, health systems, hospitals and physicians, not the patients. Until patients participate in such savings, infused drug pricing has nothing to do with them.”
Kelly Davio
September 05, 2017
When Pfizer launched Inflectra, a biosimilar infliximab referenced on Johnson and Johnson’s originator Remicade, it priced its product at a 15% discount to Remicade’s wholesale acquisition cost (WAC). While many in the industry had thought that Inflectra’s price point would be enough to encourage uptake of the cheaper biosimilar, and predicted that the biosimilar could produce significant cost savings for health systems, Inflectra has gained only a 2% market share. Pfizer believes the slow uptake of its product is the result of insurers largely choosing to cover the originator product.

Pfizer, AIS Health reports, has recently adjusted its average sales price (ASP) for Inflectra in an effort to be more competitive with both the reference product and the newly launched Renflexis (priced by Merck at a 35% discount to Remicade’s WAC). The adjustment to the ASP brings Inflectra’s WAC to 19% lower than Remicade’s. According to Lynn Nishida, vice president of pharmacy at Solid Guidance, payers generally reimburse providers based on the ASP, not the WAC. “When the first biosimilar comes to market, the ASP of the first biosimilar mirrors WAC [and] can be much more expensive than the reference product’s ASP,” says Nishida. “Therefore, until the ASP drops for the biosimilar, which usually takes about [1] to [2] quarters, payers are challenged in embracing the biosimilar, which is more costly.”

However, Pfizer’s conservative initial discount was not the only factor that helped Remicade remain the dominant infliximab treatment; contracts between Johnson and Johnson and payers played a key role in keeping the reference product on formularies. As Fierce Pharma reports, Johnson and Johnson offered volume-dependent discounts for Remicade to providers, bundles comprising multiple drugs and medical devices to larger hospitals, and deep discounts for its product to independent infusion centers. Those incentives, which made the reference drug cheaper to acquire than a biosimilar option, kept Remicade from dropping further than 5% in its sales number for the second quarter of 2017 (the company had itself anticipated that sales of the drug would erode by 10% to 15%).

While Johnson and Johnson’s investors may see cause for celebration in holding off biosimilar challengers, patients continue to seek relief from the high cost of biologic drug therapy. Because patients’ out-of-pocket costs are based on list prices for drugs, not on the reduced prices offered to health plans, hospitals, or infusion centers, costs to patients receiving treatment with Remicade remain as high as ever. As Seth D. Ginsberg, co-founder of the patient advocacy group Global Healthy Living Foundation, told The Center for Biosimilars®, “Currently the benefit of rebating and pricing of all infused drugs goes to the payers, health systems, hospitals and physicians, not the patients. Until patients participate in such savings, infused drug pricing has nothing to do with them.”

Furthermore, patients who hope to achieve cost savings by switching from the reference infliximab to a biosimilar treatment may face disincentives from their health plans. UnitedHealthcare, for example, continues to prefer Remicade to biosimilar treatments, and noted in its July bulletin that patients who want to switch to the biosimilar Renflexis may be required to transition their infusion services to another site of service if they want to continue to receive coverage. Such changes to sites of care, Ginsberg says, are “unfortunately, a common historical practice with infusions of all types, and existed before biosimilars. If an integrated network delivery system, for example, decides to only stock a certain brand, then a patient who wants, or needs, another brand will need to go to a different infusion site. Pricing and demand considerations mean sites cannot stock all brands, and some exclusionary contracts prohibit competitive brands. Again, the patient suffers because the distribution system allows these market distortions.”

While patient advocates like Ginsberg see potential in biosimilars, the road ahead may be a long one for patients as they seek affordable therapy. “Biosimilars are changing some entrenched pricing and distribution policies for biologic medicines, but the patient is not yet driving or benefiting from these changes,” says Ginsberg. “We’re disappointed the system has not found ways to better serve the patient medically, emotionally, and financially, but we plan to keep fighting for change within a system that often asks the patient to fight for good healthcare at a time when they are least able to.”

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