What Employers Can Do to Stand Up for Biosimilar Formulary Placement

When it comes to getting biosimilars on formulary lists, employers may have more power than they realize and could take a number of big actions to ensure they are achieving the greatest savings, according to a report from the National Alliance of Healthcare Purchaser Coalitions (National Alliance).

The report detailed biosimilar concerns and successes of 7 regional coalitions and over 60 employers and compiled a comprehensive list of key actions that employers could take to overcome obstacles to biosimilar adoption.

Reduced barriers could produce about $25 billion in savings over 10 years, which could total $133 billion by 2025 as policy makers take on a greater role in encouraging greater biosimilar adoption, according to the Association for Accessible Medicines.

The National Alliance conducted a presurvey, roundtable discussion and a post survey to gain intelligence on the challenges that employers are facing in regard to adopting biosimilars and the concerns surrounding pharmacy-benefit trends.

The National Alliance aggregated the results, finding 5 key themes for action:

1. Revamping health plan designs to prioritize biosimilars, minimize disruption to members, and limit changes to members’ treatment cycles
2. Taking on a bigger role in ensuring biosimilar formulary placements and targeted utilization management
3. Increasing focus on low-net-cost options and understanding how rebates impact overall drug pricing
4. Ensuring coverage of biosimilars at an appropriate tier level and implementing incentives to encourage adoption
5. Focusing on impact of the site of care on drug delivery costs

Some employers raised concerns that adding biosimilars and reference biologics to health plans might worry or confuse plan members about whether their treatment regimens would be interrupted or if the move would trigger restrictions on reimbursements.

The National Alliance recommended that employers create an additional tier or preferred reimbursement for biosimilars and reference biologics to take advantage of savings related to unit prices. Employers could also add biosimilars to the branded tier without needing to change cost-sharing or co-pay models.

Employers expressed heavy agreement that consultants, pharmacy benefit managers (PBMs), and insurance companies “sold” them on standardized formularies by telling them that they would have to pay extra to customize formulary lists if they wanted to add biosimilars or new reference drugs.

However, while some PBMs are restricting biosimilars from being added to formularies, employers can require them to be added without additional fees because there are not enough products to warrant a separate fee or a difference in administering claims. The National Alliance recommended that employers take control of formulary management, implement a formulary that is not driven by rebates, and request an audit of the current formulary.

Other recommendations that the organization had for employers included:

• Do not be lured into 340B pricing plans and only consider them for members with incomes below the poverty line
• End relationships with PBMs and payers that have falsely claimed that biosimilars are more expensive and less safe than reference products or are unnecessary to include on formularies; start new relationships with PBMs that are more transparent
• Include all biosimilars on formulary and offer incentives for their use in the same drug class over the reference product
• Carve out specialty drugs and/or biosimilars
• Expect advances in drug delivery and include them as option in plan designs

The report also included some top priorities for employers and purchasers to keep in mind over the next 2 years:

• Collect objective information on biosimilars and the value that uptake can provide them
• Understand the availability of interchangeable biosimilars and what the designation entails
• Determine improved drug-management approaches
• Explore a precision-medicine model to help patients receive the right treatment on the first try
• Acknowledge the impact of rebates and current legislative policies
• Prepare for future biosimilars approvals and changes to the market

Reference

Rehayem M, Jung A. Improving drug management: employer strategies on biosimilars. National Alliance of Healthcare Purchaser Coalitions. February 22, 2022. Accessed February 24, 2022. https://connect.nationalalliancehealth.org/viewdocument/improving-drug-management-employer