From The Editor | December 20, 2018

How This Employer-Driven Initiative Could Revolutionize Biosimilar Use

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By Anna Rose Welch, Editor, Biosimilar Development
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Over the past few months, I’ve been speaking to experts in nonprofit employer coalitions about their roles in helping employers manage their healthcare benefits — especially when it comes to educating employers about biosimilars. So far, I’ve written articles featuring experts from Employers Health, Pacific Business Group on Health (PBGH), and National Alliance of Healthcare Purchaser Coalitions. In talking with these experts, I’ve learned several encouraging and discouraging things about how biosimilars are being addressed and incorporated into employers’ health plans. Biosimilars are certainly one (of many) topics employers are excited about, and several employer organizations are working on initiatives that will increase employers’ push to incorporate these products into their employee populations. But the relationships between employers and their healthcare partners (brokers, consultants, healthcare plans) are far from clear-cut. Misaligned incentives amongst these stakeholders have made the overall transition into biosimilars tenuous, despite their alluring promise of lower costs.  

That’s why I was particularly excited to speak with the last (but certainly not least) employer organization in my current coalition lineup: The Mid-America Coalition on Healthcare (“The Coalition”). The organization, which comprises 80+ members and contributors employing roughly 600,000 lives in the Kansas City Metro area, is currently working on one initiative that, ultimately, will lead to greater understanding of employers’ healthcare costs and, in turn, more data-driven decisions. Using what The Coalition’s President and CEO Troy Ross has termed “3D thinking” through the creation of data mapping, employers are gaining access to information they’ve never been privy to before that will enable them to identify savings opportunities and better design their benefits — which could mean increased traction for biosimilars.

“We know there’s a lot of waste in the healthcare system,” Ross said. “The Coalition is helping educate employers on how to identify this excessive spending and mitigate it with more strategic benefits design.” As employers are armed with data they’ve typically never had access to, there’s a good chance biosimilars will become a larger talking point and solution for employers moving forward.

One Simple Question Raises Large Concerns About Benefits Management

The Coalition first began this data-gathering journey by entering into a partnership with the Integrated Benefits Institute (IBI). The IBI, which provides employers and stakeholders with the data to shape their workforce’s overall health and wellness, is in possession of the nation’s largest standardized disability database. It contains data spanning the last 23 years from over 1,250 employer members. Ross approached the IBI about a partnership in an effort to help members in The Coalition identify the conditions or procedures that contribute to employers’ highest disability-related healthcare costs, as well as implement data-driven decision making. In order to do this, the IBI needed to dig into the data to learn the top 10 drivers of short- and long-term disability. But in order to get a more detailed picture, Ross also asked to have data on the metrics associated with short- and long-term disability — for instance, presenteeism, absenteeism, Family and Medical Leave Act (FMLA), wage replacement, absence management cost, and work safety data. “When we shake that all up, what’s the new top 10 list?” Ross asked.

If we had to guess, I’m sure there are several diseases or conditions that are more commonly associated with employers’ increasing healthcare spends. However, you might be surprised by what the data revealed. When Ross asked members at a town hall meeting what they expected would be the greatest healthcare drivers, many called out “cancer” — a solid guess, given the rising costs of innovative oncology therapies. But, as it turns out, rheumatoid arthritis (RA) came in over cancer by what Ross called a “landslide.” In fact, of the five most costly conditions, all forms of cancer came in at number four. RA took first place, followed by hepatitis C and congestive heart failure. Diabetes rounded out the top five.

But what Ross found even more concerning was the fact that most employers were completely in the dark about this spend, nor had they had any conversations with their healthcare partners about structuring their benefits in ways to better address these costly conditions. He explained, “I asked the employers in the room, ‘In the last 12 months, have you or any of your healthcare partners said we need to talk about RA and how the associated specialty drugs and biologics are impacting your healthcare spend?’ Nobody raised their hand.” Ross also asked how many of the employers (many of which were large, national companies) felt they had all the data they needed to determine the amount their organization was spending on RA. Once again, no one raised their hands.

The Practice Of Data-Mapping: A Case-Study

It was learning about this lack of knowledge that encouraged The Coalition to make a list of all the types of data employers would need from their supply chain partners in order to get a clearer picture of the total cost of RA in their workforce. To do so, The Coalition teamed up with one of its members which is a medical billing coding company, Total Solution Partners (TSP). “We obtained every national drug code (NDC), Healthcare Common Procedure Coding System (HCPCS) code, current procedural terminology (CPT) and J-codes for medical and hospital billing purposes, along with the national provider identifier (NPI) number and social security codes so we could track which physicians were using which drugs and where,” Ross listed. “We gave them the data map and every single data set they should be asking for from their pharmacy benefit manager (PBM), health plan, and third-party administrator (TPA).”

Armed with this information, Ross and his team analyzed data from the local carrier community and determined that eight out of 10 primary care physicians are owned by a hospital system. One hundred percent of cardiologists, 99 percent of oncologists, and 75 percent of all specialists are on a hospital payroll — and this was not something employers had been made aware of in their benefit negotiations. In short, this means employers and employees are likely to realize greater healthcare spending costs, thanks to percent-to-charge contracts between insurers and hospitals. These contracts lead to reduced transparency about the costs of individual treatments administered within that hospital system and increased spending on the insurer’s side.

The data also called attention to a critical piece of information: despite the high costs that accumulate on the pharmacy benefits side, Ross shared that, “The vast majority of the savings opportunity, especially for biologics, does not reside on the pharmacy side, but rather on the medical. Working with a trusted and experienced advisor could result in anywhere from one percent to five percent savings on the pharmacy benefits side; but that’s about it.”

Instead, the employer’s negotiation power resides on the medical side (also known as the hospital or outpatient clinic side). There are several different levers employers can pull to guarantee cost savings via the medical benefit, and, according to Ross, the most powerful is by determining the sites of care where employees go to receive their RA injection or infusion.

In order to get the RA data mapping initiative off the ground, The Coalition first approached one of three employers in the market that was self-funded and acted as their own third-party administrator. This means they cover their own pharmacy and medical bills, part-time and overtime expenses each month. In other words, they own all of their data, Ross explained. By digging into the data, this particular employer realized that, out of a population of over 604,000, a little over 800 people were being treated for RA. Though this may seem a small number of people in the grand scheme of things, treatment for this condition alone accounted for 13 percent of their total pharmacy spend — and that was a hard figure to overlook. 

After deidentifying the data provided by this self-funded employer, the data was shared with another coalition organization known as Infusion Express, which is an independent infusion clinic. Ross asked this clinic to share how much it charges for injecting or infusing the same dosage of the drug in the same frequency compared to what the employer had paid to have the drug administered by a hospital-owned physician or clinic. Ross emphasized that this large company could have saved millions on that one therapeutic class of drugs, simply by making some tweaks to its benefits design.

Over the past year, this data-mapping initiative has continued to grow. Not only has Ross been presenting this initiative at conferences around the country, but now that the RA data map has been completed, The Coalition is exploring maps for other conditions, such as hemophilia, muscular dystrophy, osteoarthritis, and early-stage breast cancer. “We’re trying to focus our data-mapping services on biologic disease states that account for a disproportionate percentage of healthcare costs,” he explained. In fact, even though The Coalition completed its RA data map, it has plans to revisit it now that there are biosimilars available. “We’ve had requests from several manufacturers that are interested to see where some of the real opportunities for savings may be now, thanks to the arrival of biosimilars,” Ross added.

There are a number of ways employers could choose to use these data mapping initiatives in an effort to shape where their employees receive their treatment. If we’re looking at a bell curve of options, on one side of that curve will be the employers who alert their employees about cheaper, independent infusion clinics for their injections or infusions, in addition to the hospital-associated clinics and doctors in their provider network. On the other side of this bell curve will be the employers that take a more direct approach by requiring employees to go to a certain location for their biologic treatment in order to have the treatment covered in full. Should the patient choose to stay in the hospital system for their treatment, the employer would only cover a portion of it, in turn leaving the patient to pay the difference.

Overall, one of The Coalition’s main goals is to encourage employers to take greater charge of their healthcare decisions. During my conversations with all the different employer groups, it’s been regularly mentioned that we’re entering a time when employers’ relationships with their healthcare plans is (slowly but surely) evolving. Generally speaking, employers are becoming less interested in being told how to establish their benefits. Indeed, Ross said his goal is to encourage more of The Coalition’s members to be more straightforward with their PBMs about what they want, especially when it comes to biosimilar use. Now that we have a large body of evidence about their clinical equivalence, employers shouldn’t be squeamish about dictating that the biosimilar should be used first where appropriate.  

How Can Manufacturers Help?

In addition to emphasizing his interest in partnering with manufacturers in this data mapping project, Ross also had a few ideas about how biosimilar companies can improve their education of employers. For instance, each time a biosimilar is released, The Coalition holds a meeting — not only for its employer members, but also for their health plans and PBMs. During this meeting, a member of the biosimilar manufacturing company’s health economics and outcomes research (HEOR) team presents the important clinical information about the biosimilar. The Coalition then provides that slide-deck of information to each employer and urges them to take it to their health plans and have the the biosimilar become an option for their employees.

However, there is one area manufacturers could improve when it comes to making this biosimilar-centric information more applicable to employers. As Ross pointed out, there is often only one slide-deck put together by companies, and the information and language used throughout that document is published specifically for a director of pharmacy or a medical director. Employers ultimately will have several unique questions they’re going to need manufacturers to answer. For example, Ross listed a few: How will this treatment reduce absenteeism? How will this treatment impact presenteeism and affect the return-to-work-time? “Since specialty drugs aren’t just covered via the pharmacy benefit, employers will also want to know, how will this treatment impact my overall medical costs?” Ross added.  

Though the biosimilar industry is a scientific industry at heart, we’re no strangers to the need for clear, audience-appropriate language. In this case, Ross argues that employers need manufacturers to provide resources in a language that, for instance, their VP of HR and Total Rewards, can understand and take to higher-level decision makers within their company. “If there were one near-term need manufacturers could help meet, it’s to share their biosimilar information in terms that help answer employers’ questions, as opposed to just those of clinicians,” Ross offered.