For Immediate Release
Washington, DC – The ERISA Industry Committee (ERIC) released groundbreaking research, part of a larger initiative examining the impact of biosimilars on the health benefits spending of multiple large employers. Biosimilars—which are newer, similar versions of complex medicines approved by the Food and Drug Administration as equivalent therapies—are offered at a lower price and bring competition to the biologic market. Biologic medicines are not widely used but are quite costly. 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 (Willis Towers Watson’s Rx Collaborative). Biologics spending accounted for 93% of growth in net drug spending from 2014-2017 (IQVIA Institute).
The study, Biosimilar Medications – Savings Opportunities for Large Employers, was released in conjunction with the tenth anniversary of the March 2010 passage of the Biologics Price Competition and Innovation Act (BPCIA), part of the Affordable Care Act, which created a pathway for biosimilar approval. Specialty drug costs have continued to spiral in the subsequent years, growing from a hefty 25% of total drug spend in 2010 to nearly half (47.7%) of all spending on prescription drugs in the latest analyses (Express Scripts). Today, ten years after the pathway was created, only two biologics face meaningful biosimilar competition.
“It was important for ERIC to lead this initiative because our member companies – the nation’s largest employers – want to ensure that as plan sponsors, their employees and families have access to quality medicine at affordable costs. But as prescription drug costs rise, employees are seeing an increased burden of out-of-pocket expenditures for the medications they and their families depend on – biosimilars offer a solution,” said Annette Guarisco Fildes, President and CEO of ERIC.
The study conducted by Mariana Socal, MD, Ph.D., and Gerard Anderson, Ph.D., of the Bloomberg School of Public Health at Johns Hopkins University, focused on cost savings for large employers using actual employer plan data that tracked spending by 13 large employers on two biosimilars: infliximab and filgrastim. The researchers found that when matched for all characteristics, the biosimilar price represented 68% of the price of the biologic for infliximab and 74% of the price of the biologic for filgrastim. The study found that participating companies would have saved an average of $1.53 million on infliximab alone (under the assumption of 100% biosimilar uptake).
Further, the study showed that biosimilars created savings for employees and their families as well, noting that patients who took the biosimilar paid on average 12% (~$300) and 45% (~$600) less out-of-pocket than those who took the biologic (infliximab and filgrastim, respectively).
“These findings show that when available and used, biosimilars can generate significant savings for employers and employees,” said Dr. Socal. “Greater savings could be achieved if there were more biosimilars on the market and a higher rate of utilization of these medications.”
“At ERIC, we believe that obtaining both more biosimilars and better uptake is a shared responsibility,” said Guarisco Fildes. “Large employers we represent can employ plan design and benefits strategies to help promote the utilization of biosimilars. But when it comes to the availability of more biosimilars on the market, we need federal and state governments to act.”
To further examine the expanding access to and availability of biosimilars, ERIC commissioned two additional reports.
First, Segal, a leading consulting firm, details strategic recommendations for employers to use in their plan design to speed the uptake of biosimilars by employees and families.
Some of those recommendations include:
- 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.
Secondly, Fidelity Investments compiled an accounting of legislative and regulatory options that have been proposed by federal and state policymakers, administration officials, and interest groups. This 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.
Click here to read more about ERIC’s Biosimilars Initiative.