Amanda Forys on Reimbursement Models and Formulary Placement Strategies for Biosimilars

Biosimilars products can affect the development of new reimbursement models and formulary placement strategies as more people become educated on biosimilars, explained Amanda Forys, MSPH, director of Xcenda’s Reimbursement Policy Insights consulting team.

Transcript (slightly modified)

Are US payers currently developing reimbursement models and formulary placement strategies for biosimilar products?

We’re not necessarily seeing payment systems or any type of models being designed yet to encourage the use of these products. So, we are not seeing reimbursement being completely different for these products, or providers getting a bonus, or any type of quality metric for using biosimilars. But, we only have 2 products on the market right now and they are physician administered. On that physician administered side, right now Medicare came out and said they would reimburse these products at ASP [average sales price] plus 6% of the originator product. So, they did put a little bit of an incentive payment to these providers to say, 'if you use the biosimilar, you are saving us money but you as a provider will not be losing money on that.' That is something that they did put in place. Whether or not the private market is picking that up, we are not really getting a lot of evidence on that because we are still relatively new in this market. But that could be where they are going, through encouraging the uptake by giving a percent based off the average sale price of the originator. That’s what’s going on in the physician administer side.

On the Part D side for Medicare, or what we are going to see on the prescription side for commercial patients, that is a lot that remains to be seen. We have had interest and seen payers say, 'yes, we’re interested in picking up these products, we are going to put biosimilars on preferential tiers to the originator products that you might see at a preferred status versus a specialty tier product for someone with a biosimilar and at the point of sale, the price should be lower for that product.' So, yes, they will very likely pick them up if providers come to them or manufacturers come to them and make a good value story, saying we’re cheaper and we’re equally effective. If they can demonstrate that they are biosimilars for specific indications, then they will get that placement.

What’s tricky on the Medicare Part D side with all of this is that the biosimilar products currently do not count as brands for when a patient is in the coverage gap. So if patient is in that donut hole, right now they get a manufacturer discount that counts towards their out-of-pocket expense and then they are able to use that to bump themselves up in the catastrophic coverage, which ultimately decreases the patient spend. Here you’ve got a product that Medicare isn’t counting as a brand, so patients in that coverage gap are not getting any help with that. The plan has a responsibility that the patient is still paying more for the prescription. At the end of the day, a plan is going to say, 'how are we sitting with these products? How are patients paying out-of-pocket? What type of utility are we seeing from everyone’s perspective?' when they are evaluating the products.

There are a couple other considerations in the payer market that we need to think about. The first thing is a lot of these products, while you’re hearing providers say they are interested in learning about a biosimilar or they are comfortable with potentially prescribing one, plans cannot necessarily come in and say we expect you to give every patient that is on a current product, let’s say a current Humira, to transfer everyone over to biosimilar A or biosimilar B. You’re not going to necessarily get providers wanting to do that if they have an existing patient with rheumatoid arthritis that is happy with the therapy that they are on, you are very likely to want to keep using that therapy and not switch them over. Now, if you have newly diagnosed patients, that’s where you might see the shift and willingness of providers to move patients over to the new product. That’s something payers are going to have think about when they are managing their formularies and thinking about their pricing and tier placement. You don’t want to create a complete disincentive for people that are doing well on their current therapies because that could have other outcomes or downstream costs that are an issue, but you do what to encourage that there be an uptake. Around all of this too is the manufacturer.

The manufacturer has some significant responsibility too to help educate everyone on biosimilars. So, not only do these manufacturers have to go prove their value, just like they do for any product, they also need to be in providers’ offices and doing the typical patient support programs, that they offer for their branded products, for the biosimilars. This might be something they have to do more of upfront—they need to educate providers on what a biosimilar is, they need to help them understand all of the coding and coverage dynamics around them, and then help them through their reimbursement support hotlines and all of the services that they set up through their hubs to say if you have issues you can call and they will help you navigate the space and get the patient access to the product. You’ve got to worry about that whole issue, in addition to if something is on the formulary—is it on the formulary and has the manufacturer done what they can to encourage uptake and access to the products? Have they set ways for if it’s not covered or if a patient needs help with a copay, that they can design a program, like they do on the branded side, to make sure that patients get those products? That’s something, that at our company, we see a lot of. We have a patient assistance side of our business that actually administers those programs and there’re a lot of questions around how biosimilars change our industry and what providers are looking for as they start to use those products.