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PBMs: The Biosimilar Blockade


In recent years, a wrench has been thrown into the patient care equation.

With 5 rheumatology biosimilars already approved by the FDA, and dozens more in the pipeline, the landscape of the rheumatology drug market is on the cusp of a major shift. Biosimilars were created to bring notoriously expensive biologic drugs to patients at lower prices. In theory, they increase access to life-changing, even life-saving, treatments. As a practicing rheumatologist in downtown Washington, DC, I observe firsthand the power of biologics to bring relief to patients suffering from crippling diseases of the joints.

In recent years, however, a wrench has been thrown into the patient care equation. Pharmacy benefit managers, better known as PBMs, were created to negotiate prices with pharmaceutical manufacturers on behalf of insurance companies and manage drug benefits. Based on my experience as a rheumatologist, I believe that PBMs, however, have evolved from their original administrative function and now wield increasing influence over which drugs are prescribed and what patients pay.

As new biosimilars enter the market, PBMs will evaluate clinical and analytical data to determine which drugs to include on their formularies, the list of medications a PBM will cover. But performance will not be their sole consideration. A spot on a PBM’s formulary is a valuable commodity. PBMs pressure drugmakers to grant them high rebates in exchange for a favorable position on their list of approved drugs. This rebate system is destructive to the biosimilars market, hinders patient care, and costs consumers billions.

Long story short, rebates don’t lower drug prices—they drive them up even higher. If a biologic manufacturer offers PBMs a high rebate, a biosimilar of that biologic trying to break into the market will have trouble succeeding. Rebates reduce competition, and consequently, reduce cost savings for patients. To make the situation even worse, PBMs absorb all or most of the rebate savings. Meanwhile, patients have little or no clue where their money is going.

The rebate system thrives on lack of transparency. Clinicians and patients have no way of knowing whether a biosimilar is on a formulary due to strong evidence of its effectiveness, or the manufacturer simply offered the PBM a higher rebate than the competition. Without transparency and fair competition, we can’t determine how effectively biosimilars reduce pharmacy-counter sticker shock and put vital treatments in people’s hands.

The medical community must come together to demand greater transparency in drug pricing, starting with PBMs. Too few people know that PBMs exist, much less understand how they contribute to skyrocketing healthcare costs. Fed up with PBMs interfering with treatment, a group of patient advocacy organizations and medical associations formed the Alliance for Transparent and Affordable Prescriptions (ATAP), a coalition that works to raise awareness about harmful PBM practices. To learn more or get involved, visit www.ATAPAdvocates.com.

The writer is a rheumatologist in private practice in Washington, DC. He is vice chair of the Alliance for Transparent and Affordable Prescriptions (ATAP).

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