During a session at the Academy of Managed Care Pharmacy annual meeting, Yuqian Liu, PharmD, of Magellan Rx Management, highlighted strategies to encourage biosimilar utilization in the oncology space and the cost savings as a result.
Although there are 18 cancer biosimilars approved for 6 originator products, there are no approved interchangeable biosimilars. To accommodate the lack of an interchangeable product, managed care organizations (MCOs) and health systems have implemented the practice of therapeutic substitutions, explained Yuqian Liu, PharmD, director, Specialty Clinical Solutions, Magellan Rx Management, during a session at the Academy of Managed Care Pharmacy annual meeting, held March 29 to April 1 in Chicago, Illinois.
Through therapeutic substitution, the pharmacy and therapeutic (P&T) committee would make a decision on clinically therapeutic equivalency for products expected to yield similar effects to the reference product, she explained. This gives the pharmacy or MCO permission to substitute the drug based on a predefined protocol.
“Almost universally at this time, having a P&T committee designation for therapeutic equivalency has allowed health care systems as well as managed care organizations to select preferred biosimilars,” Liu said.
For payers, a population strategy to encourage the use of biosimilars is utilization management with step therapy, in which a payer picks preferred biosimilar products that need to be tried first. In these cases, some patients are grandfathered in to continue on the reference product. The goal is to drive utilization to the least costly alternative product.
“One concept that we can all appreciate here is competition is the key to drive down cost,” Liu said. When biosimilars enter the market, that creates the additional competition, and when the first biosimilars came to market, they launched with at least a 15% price reduction with additional discounts and rebates driving the price down even farther.
Savings over the next 5 years from biosimilars alone is expected to be $1 billion. Sales for reference ritxumab dropped from $7.39 billion in 2015 to a projected $2.89 billion in 2022 due to biosimilar competition. Similarly, bevacizumab sales dropped from $6.95 billion in 2015 to a projected $4.68 billion in 2022 and trastuzumab dropped from $6.79 billion to $3.98 billion.
“Ultimately, the cost and the cost savings will be key factors to biosimilar adoption in this marketplace,” Liu said.
A 2020 trends report from Magellan Rx surveyed 41 payers and found 67% have a biosimilars strategy in place and 59% have specifically implemented an oncology biosimilars strategy. In oncology, 44% said their biosimilar strategy is for new starts only while 15% said the strategy is for both new starts and current utilizers.
Half of the payers said they are reimbursing biosimilars based on the Medicare model, which is the average sales price of the reference product plus 6%, according to the survey results.
Magellan internal data of 16 million covered lives identified the shift in market share for biosimilars over a 1-year period and the savings impact:
“You see the significant trend shifts toward the biosimilar preferred marketplace that we're in today,” Liu said.
For a health system perspective, read the accompanying article on AJMC.com.