In the past few months, I’ve written about the work being done by nonprofit employer organizations to evolve healthcare benefits programs in this age of high-cost specialty drugs. The articles I published highlighted the efforts of Employers Health, National Alliance of Healthcare Purchasers Coalition, The Mid-America Coalition on Healthcare, and Pacific Business Group on Health (PBGH). And, as luck would have it, at January’s CBI Biosimilars Summit, I was able to meet several of these experts in person, including Matthew Harman of Employers Health and Lauren Vela of PBGH. Harman and Vela, who also are members of Biosimilar Development’s editorial board, engaged in a fascinating panel discussion about employers’ current biosimilar efforts.
While there were many insightful panels throughout the conference, there were none so impassioned as the employer panel. After hearing Vela, Harman, and the moderator Brian Lehman from Sandoz (also an editorial board veteran!) converse, it’s clear these organizations hold and can wield even more power in the push for biosimilars — with some assistance from manufacturers, of course.
As Lehman highlighted during his portion of the panel discussion, biosimilars can help employers meet and manage several of their core goals. Not only can biosimilars provide long-term savings, but by improving patient access, they can also bolster presenteeism and productivity. What’s also critical to note is that employers represent 60 percent of the insured population, and nonprofit employer organizations, including Employers Health and PBGH, help organize and widely share the collective voice of their members. As such, Lehman emphasized the significant role employer groups could play in educating patients about biosimilars. Not to mention, they’re actively engaged in evolving plan designs and contracting strategies with their members to improve overall affordability and access for biologics and biosimilars.
Because of the increasing cost pressures posed by specialty drugs, employers are more regularly finding themselves between a rock and a hard place. “When I first started with Employers Health, we didn’t see CFOs sitting in on their company’s annual pharmacy benefits reviews,” Harman explained. “But now we see CFOs sitting at the table learning about the clinical aspect of certain drugs.”
Hence, the rallying cry from employer groups to help their members better understand their benefits management and how biosimilar access can impact their long-term healthcare costs. But as was discussed during the CBI conference, there are a number of barriers to uptake of biosimilars as well as risks employers may face as they try to make their formularies more affordable. Throughout their panel, Harman and Vela shared great insights into how employers are approaching their health plan negotiations today, what hiccups they may run into, and best practices for manufacturers and employers to consider that could help promote greater biosimilar use.
In the first of what will be a two-part article, I’ll share their thoughts on current reimbursement models for biosimilars and how employers and manufacturers can to reshape these practices to bring biosimilars more regularly into employer negotiations.
Medical Benefits Management: Making Room For Biosimilars
As I wrote in my article with Harman late last year, there are a number of tools employers can explore to improve pharmacy benefits management. Several of these tools include dispense-as-written penalties and different copay structures to incentivize patients to choose biosimilars. However, as is well-known amongst reimbursement gurus, there’s much less ability to manage the medical benefit. And all the biosimilars on the market today are reimbursed under the medical benefit, as they’re typically administered in the hospital or at an outpatient infusion center. (Humira and Enbrel biosimilars will be in the pharmacy someday….Cue the dulcet tones of Somewhere Over The Rainbow.)
Though Harman admitted it is difficult to manage the medical benefit, there are a few maneuvers he encourages his employer members to consider, including differential reimbursement to incentivize physicians to choose the biosimilar over the biologic.
“We advise our members to go to their healthcare vendors and specify they will pay the physician the average sales price (ASP) plus the percent of the reference product if they prescribe the biosimilar,” Harman explained. “However, if the physician gives the innovator, they will only be reimbursed at ASP plus the percentage of the biosimilar.” In fact, this is currently how CMS reimburses providers for using biosimilars, however this has yet to be implemented by commercial plans. (Ideally, this payment scheme would be adopted by commercial plans, too.)
Vela agreed there is definitely work to be done in terms of incentivizing physicians through reimbursement. “This is what we constantly need to be talking with our health plans about doing,” she said. “Our employers want to do that, and since they are investing as much as they are in the healthcare system, they should be able to do it.” However, this also falls into one of the many “easier-said-than-done” categories.
For example, even if a large employer had great leverage over their health plans (which is a rarity) and it was able to implement a specific payment scheme, it will more than likely run into one core issue: the scale of the change will not be great enough to justify the alteration. Say a large employer has 14 of its employees treated by a rheumatologist. That physician also treats a hundred other patients who are covered by different health plans. Vela argued it will be less effective (and maybe even impossible) to implement a payment scheme with that physician when it will only be impacting a small overall portion of that physicians’ patient base. In many cases, even when a health plan contracts with a care system, it comes down to the care system to integrate any payment changes down to the physician level, and that doesn’t always happen efficiently or effectively. “There needs to be more work done with the caregivers and care systems so that there is an incentive to change this,” she added.
In addition to these systemic barriers, both Vela and Harman explained that many of the HR teams responsible for working on employee benefit plans are under-resourced, overworked, and, generally speaking, are not healthcare experts. Depending on the company, they can be varying degrees of risk-averse. As such, it’s critical for employer groups and manufacturers to provide solutions that are already well thought-out and easily implemented.
For example, Harman referenced the National Business Group on Health’s (NBGH’s) Guide to Cancer Treatment & Prevention. This “playbook” provides a detailed checklist companies can use to evaluate general medical and pharmacy benefits, as well as short-term disability programs. Companies can take the information from this checklist straight to their health plan partners to adjust their current benefits plans. However, given the time-crunch many employers face, there are opportunities for employer groups and manufacturers to team up to ensure these resources are understood and used in an efficient way. For example, Harman shared that Employers Health partnered with a pharmaceutical manufacturer and hired an independent consultant to help employers identify the gaps in their existing benefits using the NBGH guide.
A guide and strategy such as this could be just what employers need to help them integrate biosimilars into their health plans. “We could create a biosimilar guide for medical, pharmacy, and disability benefits that help promote biosimilars, and then have a consultant meet with employers to identify gaps in their benefit design where biosimilars could be a solution,” Harman proposed.
Stay tuned for part two, in which Harman and Vela discuss the evolving role (and challenges) of rebates for biosimilar uptake, as well as the need for greater health system-employer integration.