This week is Global Biosimilars Week. Biosimilars are lower cost, therapeutically equivalent versions of biologics. You may have noticed biosimilars making headlines in the news recently. Last month, the Food and Drug Administration (FDA) approved Cyltezo, the first interchangeable biosimilar to Humira, the top-selling drug on the U.S. market. This is great news for patients and employers who provide health care benefits to their employees and families.
More than 180 million Americans receive health care benefits through their employer, with large employers paying more than 80% of health care premiums for their employees. As prescription drug costs rise, employees are experiencing an increased burden of out-of-pocket expenditures for the medications they and their families depend on. Specialty drugs, including biologics, are the fastest-growing part of drug costs. In fact, employer groups have reported that specialty drugs—including biologics—accounted for less than 1% of prescriptions but made up 40% of the group’s total drug spending. Biologics spending accounted for 93% of growth in net drug spending from 2014-2017.
In 2019, ERIC launched a groundbreaking three-part initiative, Biosimilars: Employers and Employees See Savings, More Competition Needed, to understand better biosimilars’ role in reducing health care costs.
The first part of the initiative, Biosimilar Medications – Savings Opportunities for Large Employers, was conducted by the Bloomberg School of Public Health at Johns Hopkins University. The study focused on cost savings for large employers. Researchers used actual employer plan data – a first! – that tracked spending by 13 large employers on two biosimilars: infliximab and filgrastim. They found the biosimilar price represented 68% of the price of the biologic for infliximab and 74% of the price of the biologic for filgrastim. It was determined that participating companies would have saved an average of $1.53 million on infliximab alone.
The study also showed that biosimilars created savings for employees and their families as well. Patients who took the biosimilar paid on average 12% (~$300) for infliximab and 45% (~$600) for filgrastim less out-of-pocket than those who took the biologic.
The second part of the initiative, led by the consulting firm Segal, detailed strategic recommendations for employers to use in their plan design to speed the uptake of biosimilars by employees and families.
- Drive understanding of biosimilars by health plan participants and health care providers through education and incentives
- Apply clinical management techniques to improve health care quality while lowering costs through prior authorization, step therapy, and medical channel management
- Include biosimilars in the payment provisions of prescription drug benefits through plan design and pharmacy benefit manager (PBM) formulary strategies
- Address biosimilar medicines when negotiating PBM contracts
These approaches all hold the promise to increase biosimilars uptake and savings for employers and employees.
The third part of the initiative was an accounting of legislative and regulatory options federal and state policymakers, administration officials, and interest groups have proposed. Fidelity Investments compiled the list. The compilation serves as a resource detailing the many policies that can create a favorable environment for a competitive biologic marketplace, leading to lower-cost options for employers and patients.
ERIC is hopeful that Cyltezo’s recent approval of interchangeable status will help pay the way for other biosimilars. We just hope it doesn’t take four years for those biosimilars to go from approval to being available to patients. A long, drawn-out timeline only hurts patients.
To read more about ERIC’s Biosimilars Initiative, click here.