Oubre: The Practice Perspective on Biosimilar Contracts

Tony Hagen

Tony Hagen is senior managing editor for The Center for Biosimilars®.

An oncology practice administrator describes the careful calculus involved in balancing patient needs with the business side of biosimilars and cancer care.

Payers keep tight control of which biosimilars practices can use. Their contracts with vendors have a lot to do with what biosimilars get onto the preferred list. For providers, the freedom to choose among biosimilars of a drug type may be limited to just one biosimilar, or none at all.

Practices say they could be of better service to their patients and would find it easier to manage operations if they could do the biosimilar choosing.

Many audience questions asked during a recent MJH Life Sciences™ webinar about payer contracts had to do with the practice perspective on these issues. We asked panel participant Kathy Oubre, chief operations officer for the Pontchartrain Cancer Center in Louisiana, to assist, which she graciously did.

Below are her answers to questions on payer adherence, alternative contracting, cost preferences, and more. Oubre’s responses are infused with more than just her senior management experience—she is also president of the Louisiana Medical Group Management Association and a member of the board of directors for the Community Oncology Alliance.

Are you willing to quit a payer if they do not have all biosimilars in a class on their formulary?

Oubre: It would be unrealistic to quit a payer over biosimilar availability. In addition, patients on biosimilars account for a small portion of our overall patient mix; quitting a payer would result in forcing a much larger group of patients to seek oncology care elsewhere.

In your practice’s biosimilar strategy, do you consider partnering with biosimilar pharmaceutical companies that support an at-parity market approach?

Oubre: Yes, we are more likely to work with a pharma partner who is interested in being a good community oncology partner and not enter into restrictive formulary deals with payers or distributors. Our organization is more likely to use the biosimilar of a company that promotes parity.

How often is a realistic frequency to do a benefits investigation on the next infusion? Before every infusion? For the next few months? For the year?

Oubre: Benefits investigations are done to determine whether the patient is covered for treatment. They are performed before the initiation of any new therapy and at the beginning of a plan year, when payers introduce plan changes and deductibles reset.

If a payer makes formulary changes on a quarterly basis, the formulary update is generally for new patients. Patients are generally not required to change if they are already receiving treatment. They would be “grandfathered” for their originally approved drug. Therefore, no interim benefits investigation would be necessary.

Where is pegfilgrastim administered? In the doctor’s office or patient’s home?

Oubre: It is administered in the doctor’s office.

Is it a medical or drug benefit?

Oubre: It is considered a medical benefit, not Part D.

Is there an incentive for the provider to administer pegfilgrastim in the office/hospital setting versus the patient self-administering at home?

Oubre: There’s no incentive. There is a lot of discussion over treating patients at home because of the pandemic, but when they receive pegfilgrastim in the office it often results in better patient care. Having the patient return on Day 2 allows nurses to lay eyes on a patient and talk with them. Often, this brief encounter enables us to identify and treat nausea, dehydration, pain, etc, before the issue gets any bigger—which may require an emergency department visit or hospitalization.

In addition, most oncologists have policies against white and brown bagging (taking or receiving prescribed drugs outside the practice). Biosimilars are costly drugs and we cannot ensure proper storage and handling once the drug has left our facility or prior to, if it was brought in from a third-party supplier, such as a specialty pharmacy. We cannot prevent someone from leaving it in a hot (or extremely cold) car while running errands or delivering the drug to a patient’s front porch. There are many environmental factors, such as sunlight which may compromise the integrity of the drug.

Is there a higher co-pay for the patient if they self-administer at home?

Oubre: I have not seen this.

What role do you see for biosimilars in value-based care (VBC) health care models? Are there any examples of VBC models with biosimilars?

Oubre: Biosimilars play a huge role in VBC models, since the primary goal of VBC is high quality/low cost. This is especially true for the Oncology Care Model. Pegfilgrastim biosimilars have enabled Pontchartrain Cancer Center to save money every time. There are some pilot programs coming out that will center on biosimilars, particularly in value-based care models. The Center for Medicare & Medicaid Innovation is talking about a pilot program specifically for biosimilars, as are several employer groups across the United States.

Are you aware of any states that have taken steps from a policy perspective to decrease payer influence on formulary decision-making for biosimilars?

Oubre: Several states are reversing their current policies and including biosimilars on their formulary after having allowed only originator products, based on rebates between pharma partners and state Medicaid programs. I do think there’s going to be more of that.

Many states, including Louisiana, are attempting to reform step-therapy policies that often require patients to fail first on the originator before being allowed to use the biosimilar. Under proposed legislation that has passed the Louisiana Senate, patients and physicians could appeal step therapy requirements that are not in the best interest of the patient based on medical necessity [HB 263].

What biosimilar pricing discounts to brand do you need to switch?

Oubre: It’s not a simple question to answer. Practice formulary decisions are a marriage between a practice’s payer mix, drug contract structure, and pricing. I would say that at a minimum, a 10% discount is required. But it’s not as easy as flipping a switch. When you make these decisions at a practice level, it requires us to build the new drug into the treatment plans within the electronic medical record and contact the payer to obtain authorization for the new drug. We do have to recover staff costs for those additional workflows.

What makes this process more complicated is that there are multiple biosimilars and practices may have several payers who all choose different products. On a practice level, it’s important to consider the number of patients on a particular drug (I review my previous quarter or 2). Then I evaluate each drug based on practice usage, price differential, and contract metrics. Every contract looks a little bit different. The biggest problem is multiple payers are picking different biosimilars, which makes it difficult for practices to perform well on many contracts.

For webinar questions and answers from the payer perspective, click here.