Before the Senate Finance Committee, pharmacy benefit managers said legal issues, not their actions, were to blame for keeping biosimilars from reaching US patients.
Pharmacy benefit managers (PBMs) were asked Tuesday about the availability of biosimilars, and how the category is treated in negotiations with drug manufacturers or placed on payer formularies, during their appearance before the Senate Finance Committee.
Most of the PBM executives, in attendance for the committee’s third hearing of the year on drug prices, cited biosimilars and generics as 1 strategy to keep pharmaceutical costs lower for consumers in their opening statements.
The hearings are the product of bipartisan cooperation between Senators Chuck Grassley, R-Iowa, and Ron Wyden, D-Orgeon. That cooperation extends to a related investigation about the price of insulin.
Grassley opened the session by saying that PBMs report rebates and other price concessions to CMS but that, for legal reasons, use of the information is limited. “More transparency is needed,” he said.
During a line of inquiry about rebates, the PBM executives all denied using list prices as a tool to win larger rebates.
On the topic of biosimilars, some said delays stem from waiting for the FDA to finalize guidance on interchangeability, which would allow pharmacists to substitute biosimilars for biologics at the pharmacy level.
“Biosimilars have the potential to save the health system $54 billion over 10 years, but we need more of them on the market. In the European Union, 53 biosimilars have been approved, while only 17 have been approved in the United States and most of them are not on the market. We encourage the Administration to finalize interchangeability guidance to improve competition in the biologic market,” Derica Rice, executive vice president and president, CVS Health and CVS Caremark, said in his opening statement.
Senator Sherrod Brown, D-Ohio, pressed about the issue later on in the hearing, saying it was his understanding that at times the reference biologic product is preferred over the biosimilar.
“This is shortsighted,” he said. “It’s already having a chilling effect on the potential for robust biosimilar market in the US." He asked the executives to say what “they can and will do, and what more Congress should do,” to see that the United States has a vibrant biosimilar market.
“Shortening this period of exclusivity could make a huge difference in bringing biosimilars to the marketplace,” said Steve Miller, MD, executive vice president and chief clinical officer for Cigna, which owns Express Scripts. He blamed the legal issues thwarting biosimilar competition in the United States.
Rice referred to the experience of follow-on insulins, saying that when new competition was introduced, they were able to reduce out of pocket costs by 9%
Senator Catherine Cortez Masto, D-Nevada, brought up sole-source drugs and organizations such as the Institute for Clinical and Economic Review (ICER). She referenced a report looking at biologic treatments for asthma from ICER, which issues reports and evaluations about the cost effectiveness of different therapies and the value that they bring, and asked if the PBMs use such reports.
To one degree or another, the executives reiterated similar points: they use such reports, and PBMs help lower costs and bring value.
But Wyden said he “questioned their message that they bring value and fight for value,” referring to an Amgen cholesterol drug that he said is extremely similar to an older formulation, but has a price that is 60% higher than the original.
He held up what he said was a prior authorization form required of a doctor who wanted to prescribe the less expensive drug, because the newer one was on the formulary. He pointedly asked Rice, “is it because you get a bigger rebate on a more expensive drug?”
“Absolutely not,” Rice responded.
The question of spread pricing—the difference between what a plan sponsor is billed and a participating pharmacy is reimbursed—came up throughout the hearing. Toward the end of the session, Wyden asked each of the executives if they would commit to not using spread pricing in Medicare and Medicaid. Three executives said yes, 1 said the company was “neutral,” and the other executive responded with an answer that Wyden said left him “scratching his head” as to what the answer was. “I’m going to have to decipher that one,” Wyden said.
On the subject of ending rebates—which the PBM industry opposes—the executives testified that ending them, as HHS wants, will not change their business model, and it also would not do anything to force drug companies to lower their prices.