From The Editor | October 23, 2018

Preparing Employers For Biosimilars: What Must They Know Now?

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By Anna Rose Welch, Editor, Biosimilar Development
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Earlier this year, my eyes were opened to a biosimilar stakeholder I had never considered: the employer. I wrote two articles highlighting the work being done by the National Business Group on Health (NBGH), as well as how biosimilar companies can work with this stakeholder to address healthcare challenges. These articles became quite popular, suggesting to me the employer had not yet earned its place on companies’ lists of the most critical stakeholders needing education. (To be fair, there are, seemingly, at least 100 stakeholders fitting that description.) Given the industry’s interest in this stakeholder, I decided to reach out to several employer groups around the country to learn how each is approaching biosimilars with its members. I also wanted to find out what employers might need from biosimilar companies moving forward.

First up to bat was Matthew Harman, director of pharmacy at Employers Health, an employer-led organization representing and supporting more than 250 employers of all sizes in 32 states. Whether it be managing group purchasing contracts and corporate wellness or benefit programs, or helping employers tackle challenges in delivering health benefits, Employers Health is in a prime position to be on the forefront of employer biosimilar education. And as Harman emphasized, there are a number of ways the organization has partnered — and could still — with manufacturers to share the news about biosimilars.

Are Employers Interested In Biosimilars Today?

In his role as director of pharmacy, Harman communicates regularly with CVS and OptumRx to discuss strategies for managing employers’ pharmacy benefits spend. As healthcare costs continue to increase, it’s critical employers and health plans keep their eyes on which therapeutic classes and drugs are driving those spikes in spending. “My role is to be an independent clinical resource for our members,” Harman said, whether it’s looking into employers’ pharmacy benefits data or providing tips on how to better manage the medical benefit or ask the right questions of medical carriers. Harman is also responsible for building the organization’s new pharmacist residency program.

As you might expect, every employer is different in terms of what they want from their health benefits. While some are averse to disruption, others may be aggressive when negotiating their contracts and formularies with payers. For example, on the biosimilar frontier, some may want to grandfather-in the reference products while other organizations that are more cost-conscious would more quickly embrace biosimilars for their employees.

Though there is seemingly greater emphasis on increasing market competition each day, it became clear during my conversation with Harman that the current snake pit of patent litigation has tempered employers’ excitement about biosimilars. When I asked Harman about employers’ interest levels in biosimilars, as well as how often they come up in conversation, he admitted these conversations peaked a few years ago. When the first biosimilar was approved in 2015, there was excitement about seeing more approvals and market launches of biosimilars — especially those covered under the pharmacy benefit, like Humira or Enbrel. Harman even wrote an article for the Employers Health website in 2016 defining biologics and biosimilars and highlighting strategies for plan sponsors to prepare their plan design, utilization management, and formulary selection for biosimilar competition. However, as we all are (painfully) aware, these are the molecules that are currently being held off the market due to litigation.

“I think employers’ interest in biosimilars will increase once we see a Humira biosimilar available on the market, not just approved,” said Harman. “I haven’t heard as much from employers this year about biosimilars. But, when meeting with clients, we point out that there may or will soon be a biosimilar on the market — for instance, of Enbrel — that could impact spending trends or replace one of the largest cost-driving brands impacting that employer’s healthcare spend.”

What Can Be Done Now?

It’s still too early to tell how Humira biosimilar uptake will progress. If all goes well with biosimilar uptake in the U.S. in the next few years, we may see swift uptake of Humira biosimilars come 2023. But one thing Harman is — and has been — encouraging employers to do today is to make their formularies biosimilar-friendly.

As he described in his 2016 article, employers that have created a tier for specialty copays should consider splitting that tier into two — one for reference products and other branded specialty drugs, and one for biosimilars and generic specialty drugs. Employees would be incentivized to choose the biosimilar or generic drug by offering cheaper copays. Harman pointed out that at least 60 to 70 percent of employers have a fourth tier set up for specialty drugs, but specialty branded drugs and biosimilars currently remain lumped together in the same tier. This eliminates (or will) eliminate incentives for employees to transition to a biosimilar. As Employers Health continues to expand its clinical/pharmacy side, Harman hopes he will have the bandwidth to create these types of formularies, as well as help employers better manage the care they receive under the medical benefit. (Though there’s transparency into employers’ pharmacy benefits, there is currently little insight into employers’ medical benefit data.)  

So far, Harman has been working with several experts within biosimilar companies to create information employers can take to their medical carriers. “I envision these documents being something we could provide to our members, so when they have a pharmacy review with Aetna, for instance, they can share this how-to guide or step-wise approach document on how they’d like to see biosimilars managed both in the pharmacy and medical benefit,” he clarified. The purpose of a document like this would be to provide potential strategies for how employers could manage step therapy, prior authorization, and other tools so patients are incentivized to try the biosimilar.

A few months ago, I wrote an article exploring a switching program pilot a private Canadian payer has implemented with several employers. In that article, the expert pointed out the need to implement a carrot-and-stick model to incentivize stakeholders. In this switching program, rheumatoid arthritis patients changing to the infliximab biosimilar will be rewarded with lower copays. Those choosing to remain on the brand will be required to pay the difference between the biosimilar and reference product.

In the U.S., there’s a similar system at work known as dispense as written (DAW) penalties. Should a patient request the brand following the launch of a small molecule generic, they will have to pay more. “These penalties take the difference between the brand copay and the generic copay, and then add that difference on top of the brand,” Harman outlined. “Say the copay for the brand is $50, and the generic $10. To stay on the brand, the patient would have to pay a total of $90 — $50 for the brand and $40 for the difference.” Employers can implement these DAW penalties, which would go into effect should either the patient or the doctor request a multi-source brand. Something like this could be an important management tool for employers to use in the biologics space, as well.

In addition to working with employer groups to create product management how-to checklists, it remains critical to educate on the safety of transitioning between the reference product and the biosimilar. As a pharmacist, Harman has a keen understanding of biologic products and is aware of the manufacturing changes the brand undergoes. I’ve argued before that this concept is well understood within the biologic and biosimilar industry. But communication about this is either one-sided (e.g., biosimilars are the only ones that change) or this information falls under the radar in larger educational efforts. This knowledge will, of course, be critical for employers to understand as well, especially as they face misinformation and payers’ watch-and-wait strategies.

Harman also proposed establishing action alerts, which provide a template for specific organizations to contact their legislators about certain policies. As a pharmacist, he often receives templates from the Academy of Managed Care Pharmacy (AMCP) that he can use to contact legislators about a certain issue. Trade organizations in the biosimilar space could adopt a similar strategy when it comes to pushing for certain policies. “For example, employers could sign off on a policy change to improve biosimilar access,” he offered. After all, there are still a number of moving parts in this industry as far as regulatory policy is concerned. Harman argued the biosimilar industry is in need of some champions in Congress like there were for Hatch-Waxman. And seeing how employers are critical stakeholders in the healthcare industry as a whole, they should also be informed about and playing a role in the greater push for biosimilars.

In the next installment of this employer series, I will share insights from an expert at the National Alliance of Healthcare Purchaser Coalitions on how (and where) biosimilar companies can educate employer groups and employers. Stay tuned!