From The Editor | April 20, 2018

Pfizer Executives Elaborate On Payer Biosimilar Contracting Goals, Challenges

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By Anna Rose Welch, Editor, Biosimilar Development
Follow Me On Twitter @AnnaRoseWelch

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It’s not every day that I’m able to combine my two passions — biosimilars and poetry — but last week turned out to be a special occasion. The same week I read from and celebrated the launch of my first collection of poetry, I also accepted an invite to sit in on a press conference with several executives from Pfizer’s Essential Health biosimilar business unit. I always enjoy opportunities to learn firsthand how companies that have traditionally been on the innovator side are putting their efforts toward bringing biosimilars to market. Pfizer has been on my radar in particular, not only because it’s one of the first companies to market a biosimilar in the U.S., but also because it’s also playing an active role in calling attention to the payer-contracting-related efforts barring biosimilars from the market.

I intended to share my takeaways from this hour-long press meeting in a single article. However, as is often the case with my writing, I found the information shared to be worthy of more than one article. In the upcoming weeks, I intend to address how the experts’ views of the market have changed over the past several years while preparing for and finally launching Inflectra. But in the meantime, the company shared a few key updates related to Inflectra’s uptake and the company’s ongoing efforts to work with commercial payers. These updates not only shed more light on Inflectra’s market journey, but also reassured me that progress is being made — even though it’s not regularly broadcast in headlines. 

Diving Into Inflectra’s Successes And Ongoing Market Barriers

I’ve argued before that coverage of the biosimilar market in the U.S. tends to fixate on the number of barriers standing in the way of biosimilar success. Though these barriers are real, this naturally leads to a lot of pessimism about the state of the biosimilar market — both warranted and unwarranted. (I wrote a recent article about this phenomenon termed “progressophobia.”) Despite some of the market-related hurdles, all the experts from Pfizer reiterated their hopes for and faith in the U.S. biosimilar market. And though progress has been slower than many of us would like, I was reassured listening to them share recent stats about Pfizer’s biosimilar business and current pipeline. As Angela Hwang, group president of Pfizer Essential Health, shared, upwards of 130,000 patients globally have been treated with a Pfizer biosimilar. In the grand scheme of things, Hwang acknowledged the company and its biosimilars are “at the brink of a long journey.” But she expects that journey to continue. If we look at the company’s pipeline, there are currently four products in review by the FDA and/or the European Medicines Agency (EMA), suggesting 2018 will be an exciting year for the company.

I was also happy to learn Pfizer has made more progress specifically in the U.S. than has been shared through news headlines. According to John Kennedy, general manager of U.S. biosimilars, Pfizer has garnered 5.6 percent of the infliximab market share by volume (through the fourth quarter of 2017). Though the trifecta of the largest payers — UnitedHealthcare, Express Scripts, and CVS — either did not place Inflectra on their formularies or make it their preferred product, the product did gain favor from Aetna and some smaller, local insurers which offer reimbursement for Inflectra in the medical benefit.

But it came as no surprise to hear the true successes thus far for Inflectra have been in integrated delivery networks (IDNs). Because these organizations comprise both the payer and the provider, there is greater visibility into the overall cost and longer-term savings and value of a product. Depending on the IDN, this can translate into a greater willingness to go with the cheaper biosimilar product. In Pfizer’s case, 50 percent of Inflectra’s 5.6 percent market share was due to biosimilar use in IDNs — for instance, Kaiser and the VA. And, in these systems, Inflectra garnered 58 percent of the infliximab market share.

Securing Fair And Equal Access: Pfizer’s Ongoing Payer Strategy

That said, one of the ongoing challenges each expert reiterated needs more attention overall is ensuring fair and equal access in the U.S. market. None of us are strangers to the issues posed by exclusionary contracting which led to the ongoing lawsuit between J&J and Pfizer. In the case of Inflectra, J&J has turned to exclusionary contracts, which threatened to pull the company’s rebates for Remicade should a payer contract with the biosimilar. There are also suggestions that J&J has lumped other products into their contracts for Remicade, meaning the payer would also lose the rebates for those “bundled” products.

Now, providing a payer with a rebate in return for formulary placement is in no way unusual in the pharmaceutical space. Hwang emphasized that it is common practice to contract with payers for a wide number of drug classes. But in the biosimilar realm, exclusionary contracting practices in particular have a much more drastic and harmful impact. For instance, innovative products, unlike biosimilars, have clinical differentiations. Of course, when companies attempt to get their innovative products placed on a formulary, they negotiate on price and rebates. But an innovator is also able to supply additional data to support claims of clinical differentiation or superiority within a specific therapeutic area and drug class.

By law, the definition of a biosimilar emphasizes it must be a highly similar product with no clinically meaningful differences. As such, a biosimilar legally cannot compete on claims of increased efficacy and/or safety, said Eric Aaronson, Pfizer Essential Health’s SVP and chief counsel. “A biosimilar’s ability to gain market access is based on price, not efficacy,” he pointed out. “The lack of differentiation specified by law between the brand and biosimilar makes exclusionary contracting particularly impactful in the biosimilar space,” said Aaronson.

Having learned about the progress the company made with Aetna and in the IDN settings, I was interested to learn the company’s approach to commercial payers moving forward (outside of the Pfizer-J&J lawsuit). Broadly speaking, Kennedy emphasized the ongoing conversations the company is having with commercial insurers and reiterated the progress they have made with IDNs and smaller insurers. But in addition to strengthening the company-payer relationship, Kennedy said success is also dependent on all stakeholders making their voices heard in this arena. Pfizer is working on educating provider groups, payers, advocates, and those in the policy space to garner their attention and input into these contracting inequalities, as well. 

It’s easy to assume Pfizer’s current end-goal is to see Inflectra conquer the major formularies and get that big, gold “P” for “preferred product.” In fact, even I’ve approached the payer challenge through a particular (and lofty) lens: “How can companies get their biosimilars into the preferred product slot on formularies?” But after my discussion with these experts, I realize I may have gotten ahead of myself (and Pfizer) with this assumption. Pfizer is actually taking a much more modest approach (more of a step-wise approach, if you will).

“We’re not striving for ‘preferred access’ on formularies right now,” Aaronson clarified. “We are striving to get equal access on formularies. We just want to be reimbursed to give physicians the option of prescribing us in the first place and having it covered.”

Though long-term goals are to build payers’ confidence in biosimilars and secure “preferred” rankings, Aaronson emphasized the importance, too, in smaller steps. After all, it’s only once the biosimilar and innovator are on equal footing on a payer’s formulary that natural market competition can take place and shape future biosimilar uptake.

 

 

Stay tuned for Part Two!