Part 2: Ryan Cox on Whether Midsize Employers Have a Voice in Biosimilar Discussions

October 8, 2020

Ryan Cox, vice president of the Access Experience Team at PRECISIONvalue, discusses whether midsize employers can participate in payer discussions on formulary placement.

To watch part 1 of this interview, click here.

The Center for Biosimilars® (CfB): Hello, I’m Matthew Gavidia. Today on MJH Life Sciences™ Medical World News, CfB is pleased to welcome Ryan Cox, vice president of the Access Experience Team at PRECISIONvalue.

Have payer or PBM [pharmacy benefit manager] policies on biosimilar formulary placement been right and fair all along, or are there some overlooked realities here that underlie [large employers’ actions to stimulate broader biosimilar use]?

Cox:I think this is a challenge. If we look at the traditional levers that a payer uses to manage their formulary, I would say, at least, it's been consistent. These are not interchangeable products, so they are looked at as a distinct, competing product. Biosimilar or not, they're not interchangeable. They're going to be viewed as a distinct product that's going to compete against the originator. My job when I was a formulary decision maker was to make sure that we were providing the most cost-effective products clinically and from a cost perspective to our membership. In this instance, without an interchangeable [designation], we view them as distinct products.

For a biosimilar, you're going to expect the same safety and efficacy [as the originator has], but from that perspective you don't have that ability to move market share without some type of utilization management tool in place. So, I would say they've been consistent. Whether the philosophy is fair, I think is up for debate. I think it's been consistent, and I'll leave it at that.

CfB: And to build on that, what was the writing on the wall before and now?

Cox:I think the increased focus on the ability for biosimilars to drive down costs, in the ever-increasing trend on the specialty side, is going to continue to gain legs. As more data have come out, we have large employers now adopting strategies to increase adoption of them. And I think payers need to be aware of that and to look at things. Again, one of the things that I had said before is that you don't want to be the last payer that hasn't embraced biosimilars in some form.

But I think there are some challenges out there, and those relate to looking at the low net costs opportunity. And if that rebate revenue goes away, how do you replace it? From that perspective, you have this guarantee that you're paying your employers. If that rebate dollar goes away and you miss your guarantee, you're likely going to lose that business to somebody else. So, I think those are some things that are still out there, and I think just, again, it goes back to transparency. What is the value of the originator versus the biosimilar, not only from a gross perspective, which is very evident, but also looking at it from a net perspective? What is the employer getting from low net cost of the originator potentially?

CfB: Employers want to save money with biosimilars. As payer or PBM responses to this need are complicated by manufacturer rebates or other deals, do you see any 2-way solution to these dynamics?

Cox:That's a very good question. I think from that perspective, it goes back to what I was talking about before. From the perspective of the job of the payer, particularly with a self-employed employer, they're basically hiring us to provide a network, but we're also making sure that they're getting the best deal for those medications. I think having that open and honest conversation with them [is important] to understand what they're actually paying for that product at the end of the day.

And if they go down a very aggressive path, it's fine, but you have to understand what the consequences are of that. What's the end result of that? So, if we're losing $10 million in rebates from the originator, are we getting that much in savings from maybe a smaller rebate or nonrebated biosimilar? So, I think there's that. I think that from the biosimilar manufacturer perspective, continuing to provide education and also looking at ways that they can adequately compete with that originator product are ways to continue to bridge that.

CfB: How about midsize employers? Without extensive health care resources like Costco has, do they have a voice with payers on biosimilar issues, and do payers need to take them seriously, and why?

Cox:I think, honestly, as we're looking at whether it's a small or a midsize employer, again, in the whole scheme of things, we need to be looking at managing a population and managing them correctly. So, regardless of the size of the employer, we're looking at ways that, from a payer perspective, we can optimize and ensure that we're providing access to effective and cost-effective products to our members, but also our patients, from that perspective.

Again, for a midsize employer, it depends on who their health plan is. In this case, we're talking about medical benefit drugs—looking at are they working with a large national versus a regional [health plan], that may be smaller. They may have the ability to have some flex and experiment and pilot some of the programs that CalPERS, Costco, and potentially even Disney have done. So, yes, I think there's definitely some opportunity, but, again, it depends on who their health plan partner is.

CfB: And lastly, do you have any other concluding thoughts on these issues?

Cox:I think this will continue to be something that is going to be looked at as opportunity, particularly as the spend in the specialty drug category continues to drive the trend for payers. There are obviously several biosimilars that are going to be launching. I mentioned that biosimilars for adalimumab [Humira] are going to be coming out in 2023. That will be something to watch very closely.

I don't know that it will be a turning point, but I think it potentially could be, particularly if there's interchangeability within there. But keep in mind how big Humira is, how much it has been utilized. It's going to be coming into the market with some big players, with those biosimilars. So, that's going to be one that you definitely want to continue to watch and see how that plays out.

Interchangeability, I think, is going to be the big driver. And I've been saying that for a couple years. My hope is that we see the first interchangeable products come sooner rather than later, and I think that will help to continue to drive the uptake of [biosimilars].

CfB: To learn more, visit our website at centerforbiosimilars.com. I'm Matthew Gavidia. Thanks for joining us.


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