From The Editor | June 17, 2020

Why It's Time For A U.S. Biosimilar Shared Savings Model

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By Anna Rose Welch, Chief Editor, Biosimilar Development

Gold Piggy Banks

Over the past few months, there’s been an increasing amount of chatter about launching a biosimilar shared savings program through the Center for Medicare and Medicaid Innovation (CMMI). As the industry continues to note the misaligned incentives in Medicare slowing biosimilar uptake, both The Biosimilars Council and The Biosimilars Forum have begun offering legislative and non-legislative strategies to improve biologics competition.

In the latest push for an even playing field, The Biosimilars Forum sponsored a white paper by Matrix Global Advisor’s Alex Brill on the potential savings and other benefits that a shared savings model could bring for the U.S. healthcare system. In addition to speaking with Brill (stay tuned for a future article!), I also wanted to hear more from The Biosimilars Forum’s president Juliana Reed, VP corporate affairs lead, immunology, inflammation, and biosimilars, Pfizer. In this Q&A, we discuss why the Forum feels this is the best path forward for the U.S. and how The Forum and its members are preparing to ensure its success.

Anna Rose Welch: How did The Biosimilars Forum become interested in advocating for a shared savings model?

Juliana Reed: When we first launched The Forum, we were focused on establishing the right ecosystem for biosimilar competition. Originally, working with the FDA on the biosimilar regulatory paradigm was a priority. However, now that biosimilar competition is occurring in the U.S. market, we've been very carefully analyzing the uptake of biosimilars. We knew pretty early on that the incentives in the Medicare Part B space have not been aligned to promote biosimilar use. In particular, we noted that physicians are incentivized to use higher cost products in Part B, as opposed to the lower cost biosimilar. Shared savings is just one of several innovative programs that could come out of CMMI — for example, one we’re currently watching in which biosimilars have been playing a big role is the Oncology Care Model (OCM). Ultimately, we’re looking to propose policies that could easily be adopted and that incentivize physicians and patients to lower costs. Shared savings would be a win, win; the government and U.S. taxpayers ultimately gain the healthcare cost savings.

Welch: In addition to greater savings, are there other reasons why you feel a shared savings model is one of the best ways we can be moving forward with biosimilars right now?

Reed: Yes, there’d be a lot of flexibility in this program. For one, it would be voluntary for physicians. The scope of it is also variable; it could be rolled out in different regions or it could be national. The patients who are being treated in participating healthcare systems or physician’s offices would benefit from reduced copays. I also think this program could be implemented relatively quickly. It's a simple model with straightforward benchmarks. In fact, the separate J- and Q-codes for the biosimilars make it much easier to bill and track the usage of the individual products through this program, too.

Welch: The Forum recently sponsored this white paper outlining the overall goals of a biosimilars shared savings model. At which stage are we in this conversation with CMMI, and what are the next steps?

Reed: We are just now starting the conversation. Our paper was a key part of thought leadership to outline our next steps. Moving forward, members of The Forum will be proactively educating as many people as we can. Education has always been one of our primary efforts, and our advocacy team has done a great job on educating through virtual meetings during the pandemic. As things continue to evolve in the months ahead, I think we'll continue that outreach and education in whatever way we can — virtually and/or in person — to keep the conversation going about all of our policy ideas.

Welch: Since creating the shared savings model framework will likely fall under the purview of CMMI, what role will The Forum and biosimilar manufacturers in general need to play to successfully roll out this proposed program?   

Reed: We can be an echo chamber of education. In the past, we’ve often been a connection between stakeholders and the FDA in areas where greater education about biosimilars was needed. I think we will continue to do so in this situation. As The Forum, we have the reach and relationships to help connect the necessary stakeholders to the answers they’re seeking. As biosimilar manufacturers, we have to keep telling our story and making sure that people know about the biosimilar opportunity. We’ve seen great progress in the past year; we have more than 20 products approved and over 70 in development. There's massive cost savings potential here.

Welch: Do you anticipate that there will be any pushback to establishing such a model?

Reed: We’re starting to see commentary arguing that there is no need to change anything and that the marketplace in the U.S. is fine. The question we need to be asking in response to those claims is, “Fine for who, and for which products?” If it is taking multiple years to reach at least 20 percent market share for some biosimilar products, the system is not working well enough for the patients who need the cost savings now.  

I’d also add that, we've learned from all the years of biosimilar experience globally that savings increased when governments incentivized biosimilar uptake or required it in some countries. We’re already setting ourselves up differently in the U.S. in that we’re promoting voluntary as opposed to mandatory programs to improve biosimilar uptake. I also think the post-COVID-19 economy will be one factor that opens the government’s eyes to the extent of the cost savings we’re overlooking by not creating mechanisms to encourage biosimilar use.

Welch: Outside of voices urging us to stay the current course, are there any other challenges you anticipate The Forum or the industry will face in rolling out a shared savings model?

Reed: Most of it really will be staying the course with education. The Forum has sponsored a number of different papers over the years to quantify just what the biosimilar opportunity could be with increased biosimilar usage, even by small percentages. We’re also at the ready to be the liaison to for anyone who would like to be more informed about biosimilars or help encourage their use.