Guest Column | August 4, 2020

3 Healthcare Changes Biosimilar Companies Must Prepare For

By Fred Pane


I continue to read articles from healthcare executives saying that we need to change the way healthcare is being delivered, while lowering the overall cost of healthcare. Biosimilars have been discussed as a way to decrease the cost of healthcare, or bend the cost curve, for many years in the United States; they have done so in Europe as they have been released and approved in various countries. There are several changes I have been observing in the broader healthcare space that biosimilar companies must be prepared to consider to promote greater uptake of biosimilars and, in turn, greater cost savings. In particular, these prospects include value-based care, population health, and the emergence of nontraditional models of care.

1. Value-Based Care

Value-based care and the corresponding refocus on accountable care organizations (ACOs) are getting more attention during the COVID-19 pandemic. These healthcare models have been discussed for many years and implemented to various levels, especially in primary care offices and health systems that are integrated and own their health plans. In some of these health systems, biosimilars have contributed to lowering the cost of care, while maintaining optimal patient outcomes and continued patient and clinician satisfaction. The integrated health systems with health plans have seen the benefits because they can manage patient care across all sites of care and determine sites of care for their covered lives. Most, if not all, of these integrated health systems are supported by retail pharmacy, specialty pharmacy, home infusion and homecare nursing, and an integrated electronic health record (EHR).

In June, the Centers For Medicare and Medicaid Services (CMS) proposed a rule that would allow insurance companies to enter into value-based agreements with manufacturers in support of value-based payments and value-based care. These agreements will shift away from typical negotiations around drug pricing, which are usually volume-based. Instead, the price of the drug in a value-based arrangement will not be associated with a market share or volume of sales as the sole metric. Negotiations will also center around achieving certain clinical and financial outcomes and demonstrating the value and health economics of the drug. In turn, such arrangements encourage manufacturers to develop drugs that are not only cost-effective but have definitive clinical outcomes.

Value-based contracting has existed for over 10 years with private health plans, especially to help manage various disease states, such as diabetes, where a clinical metric (i.e., blood sugar level) is measured and tracked as part of measuring compliance while taking a drug. For example, one contract with a manufacturer established a sliding scale price based on patient compliance, measured blood sugar level, and volume of drug sold. A call center model was also implemented to check in on patients. With some biosimilars, there could be the potential to use artificial intelligence (AI) to help monitor patient compliance and successful clinical metrics.

As the pharmacy benefits management (PBM) model continues to be addressed, there may be an opportunity to work directly with major health plans to lower the cost of care to their beneficiaries, measure the reduction in cost, and bring value to the many employers they are contracted to.

2. Population Health

According to the CDC, population health is “an interdisciplinary, customizable approach that allows health departments to connect practice to policy for change to happen locally. It utilizes nontraditional partnerships among different sectors of the community, including academia, industry, health care, local government entities, etc., to achieve positive health outcomes.” Examples of disease states where population health is being implemented include diabetes, hypertension, COPD, and asthma. One of the goals is to diagnose and treat patients in the non-acute setting of care and avoid hospital admission and further progression of the disease state.

Biosimilar manufacturers can support the socioeconomic issues identified through COVID-19 and make a difference to overcome health problems that drive poor health conditions in various populations. Areas of opportunity for biosimilars include ESRD (end stage renal disease), rheumatoid arthritis, and Crohn’s disease. Biosimilar companies can assist with chronic disease management educational programs, access, and compliance with medication therapy. Most data today can be obtained through a Big Data database, but AI continues to be developed and will become a good tool to support chronic disease management. There is also the possibility to create a telehealth or telepharmacy model to support population health.

Biosimilar companies should identify the population health contact at a health plan, if one exists, and ask open-ended questions:

  1. Are you implementing a population health plan?
  2. What disease states are you focused on diagnosing and treating?
  3. Are you meeting with industry to determine if there is an opportunity to support your population health plan? If so, how do you envision industry supporting your plan?
  4. What metrics are you measuring that we can assist you with?

As customer business models are being developed by biosimilar companies, it may be important to recognize that many value-based care and population health models in hospitals, health systems, integrated delivery networks (IHNs), and health plans have implemented the tenets of the Quadruple Aim, as identified by the IHI (Institute for Healthcare Improvement). These tenets include improved patient outcomes, improved patient experience, improved provider experience, and lower cost of care.

3. Nontraditional Models Of Patient Care

Lastly, an area that biosimilar companies should be aware of is the development and growth of nontraditional models of patient care, with a focus on primary care, in order to support expanding healthcare coverage and address the socioeconomic issues identified during the COVID-19 pandemic. Historically, biosimilars would be administered in more traditional sites of care, such as a hospital outpatient department (HOPD) infusion suite, a physician office-based infusion suite, or even in the patient’s home. The sites of care for patient treatment and reimbursement are normally determined by the insurance company or PBM. However, there have also been several different sites of care emerging as chain drug stores, which may own their health plans, get further involved in healthcare delivery models, payers begin to acquire primary care practices, and large employers look to improve employee health and control cost of care.

Examples of growth in the development of nontraditional patient care delivery models include:

  1. Walgreens opened 500 to 700 in-store clinics with primary care doctors in a deal with VillageMD
  2. Walgreens and UnitedHealthcare have signed a multiyear agreement to open 14 Medicare service centers in select Walgreens
  3. Walmart is creating “supercenters” with comprehensive healthcare services
  4. Walmart is jumping into Medicare with Walmart Insurance Services LLC
  5. CVS will launch a fleet of 1,500 so-called HealthHUBs
  6. Various Blue Cross Blue Shield regions are acquiring primary care practices
  7. Haven Healthcare was established through a partnership between Amazon, Berkshire Hathaway, and JPMorgan Chase

Biosimilar companies should meet with these organization and ask open-ended questions. Questions to ask include:

  1. What are your short-term and long-term goals in meeting the needs of the patients you expect to treat?
  2. Have you thought about how a biosimilar could fit into your goals?
  3. Can we contract our biosimilar in your Medicare or Medicaid health plan?
  4. Will this site of care be capable of administering biological medications — including biosimilars?
  5. How could the use of a biosimilar in your setting of care improve your patient satisfaction and patient throughput, while meeting your clinical, financial, and patient satisfaction goals (i.e., Quadruple AIM)?   


Healthcare has always been in a state of change, and COVID-19 has not slowed down the advancement of new patient care delivery models. COVID-19 has, in fact, increased the discussions to accelerate change in delivering optimal patient care and lowering the cost of healthcare. Biosimilar companies should contribute to and be part of the change.

About The Author:

FredFred J. Pane, R.Ph., FASHP, FABC, is currently a consultant for industry, hospitals, and hospital pharmacy. Previously, he served in numerous executive-level positions, most recently as SVP of business development at Comprehensive Pharmacy Services. He was also senior director of national accounts – health care systems at The Medicines Company, and senior director of pharmacy affairs at Premier Inc. As administrator of pharmacy services at Lehigh Valley Health Network, he provided pharmacy leadership for an 11-hospital IDN and chaired the Pharmacy and Therapeutics Committee, focused on developing an evidence/value-based formulary. Pane received his BS Pharmacy from St. John’s University and provides input on current issues to the American Society of Health-system Pharmacy (ASHP), the Advisory Board Pharmacy Executive Forum, and various industry professional organizations.