How Can Employers Be Ready for the Biosimilar Influx?

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Alex Jung and Kim Dwyer, both members of the Midwest Business Group on Health (MBGH) board of directors, discuss why employers should be ready for the explosion of biosimilars entering the market, and how they can prepare.

The incoming flood of biosimilars will require special preparation, emphasized Alex Jung and Kim Dwyer during a webinar from the Midwest Business Group on Health (MBGH) called “Employers and Biosimilars: Stories from the Real World.”

The Biosimilars Act (BPCIA) of 2009 predicted a savings of $37 billion in the United States, and because of the patent cliff and impending entry of more biosimilars into the market in the next 5 years, this number is expected to quintuple.

Jung, of Alex Jung Consulting, former principal of EY-Parthenon, and Dwyer, vice president of Inspera Health, gave an overview about biosimilars and provided examples about how this growth will affect employers. MBGH, where both serve on the board of directors, collected data from employer and workgroup interviews, and held an employer panel last year.

Dwyer illustrated how employers can be ready for the entry of biosimilars across 3 examples.

In the first employer story, the employer was wondering if biosimilars are always cheaper. This is not necessarily the case, Dwyer said, because a pharmacy rebate might be the most cost effective. With 7700 employees, he felt he didn’t have the leverage to negotiate his contract with his pharmacy benefit manager (PBM), so MGBH helped him look for other ways to save money, like with manufacturer coupons for biologics. When this approach steered him away from looking at biosimilars, he decided to hire a new independent pharmacy consultant to redo his PBM contract.

For this first example, Dwyer emphasized that having an independent pharmacy consulting firm who is agnostic to the PBM can help employers identify what they want from a PBM contract.

Employers are facing a growing market for customized biological therapies, now currently estimated at $200 billion. However, Jung noted that a lot of branded products will lose patent protection in the patent cliff as biological drugs become biosimilars.

The second employer had no knowledge of biosimilars, Dwyer said, and wanted to learn more about what they were supposed to be asking about. MBGH provided this employer with J and Q codes and provided her with a list of questions she should be asking.

MBGH suggested she gather 3 years of data so that it could be measured. Both sets of data were extremely raw, almost intended to be a mystery, Dwyer said. From this, Dwyer emphasized to hold medical carriers and the PBM accountable for solid data reporting.

Dwyer also stressed the use of benchmarks to determine when biosimilar use is appropriate because it is not always necessarily true that the biosimilar will be more cost effective. Ideally, a biosimilar is both cost effective and clinically appropriate for the patient.

Finally, the goal of employer number 3, with 144,000 employees, was to see the outcome benefits from therapeutic switching. He had the resources to do his own research and compared his results against other employers’ findings, and his results were in the 90th percentile of achievement regarding compliance with therapeutic switching.

Ultimately, this employer learned that the biologic drug was sometimes intentionally being used over the biosimilar because it was cheaper than the biosimilar.
Testing drug efficacy for each patient is also important to make sure payment is being made for a drug that will be effective.

“Each and every time a new biosimilar emerges, have a conversation. And it’s not so much about the biosimilar emerging, it’s about what’s coming off patent,” said Dwyer.

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