Study Reveals Factors That Dissuade Commercial Plans From Covering Biosimilars

A recent study found factors that influence a commercial plan's likelihood of placing coverage restrictions on biosimilars, including how many competitors are on the market, the prevalence of the drug indications, and the plan’s relationship with pharmacy benefit managers (PBMs).

Health plans willingness to cover biosimilars could be influenced by many factors, including disease prevalence, cost-effectiveness information, and relationship with pharmacy benefit managers.

The study, published in BioDrugs, is the first to examine the characteristics associated with US commercial health plan biosimilar coverage. It also expanded on previous literature that found that biosimilars were preferred over their reference products in only 14% of coverage decisions and were less preferred in 33% of cases.

The researchers used data on coverage decisions from the Tufts Medical Center Specialty Drug Evidence and Coverage database, cost-effectiveness evidence from the Tufts Medical Center Cost-Effectiveness Analysis Registry, and list prices from the Merative Micromedex RED BOOK. They identified 1181 coverage decisions through August 2021 regarding 19 commercially available biosimilars for 7 reference products and 28 indications.

Twelve explanatory variables were assessed that considered how indications, market dynamics, budget impacts, plan characteristics, and indication prevalence influence coverage decisions:

• Cancer treatment
• Pediatric population
• FDA determinations for first- or second-line therapy
• Disease prevalence (< 200,000 cases; 200,000-1 million cases; > 1 million cases)
• Annual savings per patient
• Coverage of the reference product relative to FDA label
• Cost-effectiveness measure availability of the reference product
• Plan size
• Relationship with the “Big Three” PBMs (Caremark, Express Scripts, OptumRx)

Among the coverage decisions, biosimilars were covered more restrictively than their reference products 19.4% (n = 229) of the time. Of the 17 health plans assessed, 6 (35.3%) imposed exclusions or step therapy restrictions on biosimilars for less than 10% of all coverage decisions and 5 (29.4%) imposed restrictions on biosimilars for more than 30% of all decisions.

Plans were more likely to restrict coverage of biosimilars for pediatric populations (odds ratio [OR], 11.558; 95% CI, 3.906-34.203) and in diseases with a high prevalence in the United States (> 1 million cases; OR, 2.067; 95% CI, 1.060-4.029).

The authors said that restrictions on pediatric use make sense because plans may be more cautious in pediatric populations or have developed coverage terms for reference biologics.

Regarding prevalence, the authors explained that although their results seem counterintuitive because high disease prevalence could lead to a larger savings potential, "since diseases with higher prevalence may be larger drivers of spending for health plans, plans may have negotiated relatively more favorable prices for existing reference products and thus be more cautious when providing access to a biosimilar product.”

Additionally, cancer therapies (OR, 0.019; 95% CI, 0.008-0.041), biosimilars with more than 2 competitors including the reference product (OR, 0.060; 95% CI, 0.006-0.586) and products with an annual list price savings of more than $15,000 per patient (OR, 0.171; 95% CI, 0.057-0.514) were more likely to be restricted. Biosimilars referencing products that were also restricted (OR, 0.065; 95% CI, 0.038-0.109) and biosimilars without cost-effectiveness measures available (OR, 0.066; 95% CI, 0.023-0.186) were more likely to be restricted as well.

Plans with relationships with smaller PBMs were more likely to pose restrictions on biosimilars, possibly because larger PBMs have larger negotiating power, leading biosimilar manufacturers to raise list prices to get better rebates, resulting in smaller PBMs with smaller rebates and bargaining power to view biosimilars as less valuable than reference products.

“This may explain how PBMs’ profit motive driven by rebates may slow down biosimilar adoption and hinder price competition,” the authors noted.

The study had several limitations, including using list prices to calculate savings, the limited generalizability of the results, and the lack of information on how the quality of clinical and real-world evidence and resource utilization have an impact on plans’ decision-making.

The authors noted, “Future research is needed to identify the effects of such restrictions and other market forces (such as price negotiations by commercial plans and PBMs) on the efficiency of the market and resulting patient access to costly biologic therapies.”