Employers Face Barriers With Adopting Biosimilars

Despite the promise of savings billions of dollars in the United States, adoption of biosimilars has been slow. A roundtable discussion among employers highlighted some of the barriers, including formulary design and drug pricing and rebates.

Biosimilars have been offering the promise of saving billions of dollars in the United States, but barriers to access and adoption have limited the savings. The National Alliance of Healthcare Purchaser Coalitions (National Alliance) recently brought together 7 regional coalitions and more than 60 employers for a series of roundtables to discuss the obstacles and help employers overcome them.

The findings and recommendations were released in a new report, which outlined 5 recommendations for employers around plan design, formulary design, drug pricing and rebates, drug availability, and site of care and drug administration.

“Unlike generic drugs, which are available to 90% of patients, lower cost biosimilars are only available to 20% of the patients who need them,” Juliana M. Reed, executive director of the Biosimilars Forum, said in a statement. “Biosimilars are critical to lowering the cost of drugs in the US, and these findings make it crystal clear that policy makers can achieve billions in healthcare savings by increasing biosimilar adoption and access. We call on President Biden and Congress to do more to advance biosimilars to lower drug costs in this country.”

During roundtable discussions, the employers indicated that their current plan designs do not adequately address coverage of biosimilars. According to the report, most plans for pharmacy coverage are the simple three- or four-tier co-pay plans that are coupled with high deductibles, but employers can create an additional tier or preferred reimbursement for biosimilars and biologics to reap savings. Or employers can add biosimilars and biologics to the branded tier without changing cost-sharing/co-pay models.

Among the recommended actions for employers were:

  • Assess current plan design to ensure access to biosimilars
  • Ensure a plan design focused on a value-based approach to improve high-value care
  • Carve out specialty drugs

The report envisions a future with only two tiers — generic and branded — for pharmacy benefit design with co-pays/coinsurance capped at an out-of-pocket maximum by therapy class.

For formularies, many employers said they have been sold a standardized formulary and were told adding biosimilars and biologics would cost extra for the customization of the formulary. However, some employers have been able to add biosimilars to their formulary after insisting they be included as soon as they become available.

“There is no defensible reason biosimilars cannot be added to the formulary,” according to the report. “While some PBMs are restricting access, the employer (as the plan sponsor and fiduciary) can require they be added to the formulary without the additional fees for a custom formulary. There are not enough products to warrant a separate fee or necessitate administering claims differently.”

Among the recommended actions for employers were:

  • Take control of formulary management and implement a formulary that is not driven by rebates
  • Require all new biosimilars be placed in the generic tier of the formulary
  • Consider a custom formulary design and targeted utilization management

Another significant conversation with the employers was around drug pricing and the use of rebates and credits. A common concern was that switching patients from branded products to biosimilars would result in the loss of rebates and mean paying more, ultimately. However, the report noted that the difference in cost between a biosimilar and the branded product, which can be a decrease of 15% to 30%, should offset the loss of rebates.

“In the long term, [switching to biosimilars] would create better price transparency and a lower out-of-pocket cost to the patient, since rebates are not passed on to individual patients at the point of sale,” according to the report.

Among the recommended actions for employers were:

  • Adopt a strategy to ensure the lowest net cost even without rebates and consider an approach that reduces or eliminates rebates and nontransparent credits and incentives
  • Understand how rebates impact overall drug pricing and assess how they are positioned in the plan design
  • Start over with a transparent or pass-through PBM, if necessary

“The US lags Europe in embracing and expanding the biosimilars market,” said Michael Thompson, National Alliance president and CEO. “Educating plan sponsors about barriers to broader adoption of biosimilars will enable them to challenge the market dynamics blocking this critical channel to achieve a more competitive drug market.”