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Contributor: What’s Behind the Slow Uptake of Biosimilars in the US?


Dan Danielson, RPh, MS, senior director, market access solutions, at PrecisionValue, a market access marketing firm, explains the remaining issues at play slowing down biosimilar uptake in the United States.

Payers have long maintained that the high cost of biologics relative to small-molecule drugs is unsustainable and a threat to their business model. However, a new analysis shows that many plans aren’t yet sold on giving less expensive biosimilars better footing on formularies compared to reference products.

Dan Danielson, RPh, MS

Dan Danielson, RPh, MS, is the senior director, market access solutions, at PrecisionValue, a market access marketing firm.

According to an analysis of more than 1,100 coverage decisions made by 17 commercial health plans involving 19 biosimilars, insurers and pharmacy benefit managers (PBMs) are slow-walking the uptake of biosimilars by continuing to offer preferential formulary placement to the original biologics in some circumstances and parity placement for most.

So, why would a payer prefer a more expensive reference brand?

The analysis offers a clearer understanding of how discounts and rebates attached to reference products can make it more profitable for some in the value chain to obstruct the building of a vibrant biosimilars market in the United States.

It found that payers are often less likely to prefer biosimilars or place them at parity. This is particularly true if the biosimilar in question has a pediatric indication or is for a condition with at least 1 million prevalent cases.

The analysis showed a reticence for payers to promote access to biosimilars unless:

  • The decision is made in alignment with one of the 3 largest PBMs that control 85 percent of the market;
  • There are at least 3 competing products (reference plus 2 biosimilars) with savings of at least $15,000 per patient per year; or
  • The indication of the biosimilar is for the treatment of cancer.

Another determining factor in the economics of biosimilars coverage concerns wholesale acquisition cost (WAC). Price-sensitive plans such as Medicare, Medicaid, Veterans Affairs and nonprofit coverage networks often prefer the up-front discounts provided through low-WAC products. On the other hand, PBMs and rebate-sensitive plans—which may have rebate guarantees with downstream clients—prefer high-WAC products and the higher rebates they generate.

The role of PBMs and rebate incentives stood out as the biggest determining factor in the decision to deploy step therapy and other utilization management practices to slow biosimilars uptake. Plans aligned with one of the “big 3” PBMs (CVS Caremark, Express Scripts, and Optum Rx) often are not able to alter formulary content or customize as the so-called national formularies seek to pull in as many rebates as possible across all therapy areas. PBMs generally favor accumulating rebates on the original biologic unless the cost of the branded product cannot be rebated down to less than that of the biosimilar.

It bears noting that even if plans and PBMs begin to provide on par or better formulary placement for biosimilars, that access will only be as helpful as the efforts made to educate providers about the availability and efficacy of biosimilar alternatives. This “pull through” is critical. After all, biosimilars are competing brands, and prescribers cannot write for them if they don’t know their names. Also, prescribers are creatures of habit who need to become comfortable with a particular biosimilar, suggesting the need for provider-facing campaigns by manufacturers to keep biosimilars top of mind. Finally, pharmacists cannot substitute most reference products with less expensive biosimilars.

When Hatch-Waxman was passed in 1984, creating the generics market for small-molecule drugs, we saw a corollary to some of the challenges facing our nascent biosimilars market today in terms of gaining trust and acceptance of less expensive alternatives. Forty years later, the main difference is how rebate incentives have changed the marketplace and heavily influenced the coverage calculus of both drugs covered by pharmacy benefits that are processed by PBMs as well as medical benefits.

For the United States to catch up to Europe on biosimilar uptake, payers need to examine rebate guarantees and make sure that they don't favor long-term disincentives to cost savings due to the short-term needs of a particular client. Biosimilar manufacturers will need to examine how they are educating providers about the safety, efficacy and savings provided by biosimilar products.


Yu T, Jin S, Li C, Chambers JD, Hlávka JP. Factors associated with biosimilar exclusions and step therapy restrictions among US commercial health plans. BioDrugs. 2023;37(4):531-540. doi:10.1007/s40259-023-00593-7

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