Navigating Biosimilars: Expert Perspectives on Integration, Challenges, and Future Trends Within Health Systems

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This interview features 3 prominent figures in health care management and pharmacy who will share their insights and experiences with biosimilars and offer predictions about their future impact on health care. Sophia Humphreys, PharmD, MHA, BCBBS, is the director of system pharmacy formulary management & clinical programs at Sutter Health in Sacramento, California. Robert Gluckman, MD, MACP, serves as the chief medical officer for Providence Health Plan. Elie M. Bahou, PharmD, MBA, is the senior vice president and system chief pharmacy officer at Providence St. Joseph Health. Each of these professionals brings a wealth of experience and knowledge to the discussion on biosimilars, highlighting their significance in the evolving landscape of health care and pharmacy practice.

AJMC: How have your organizations integrated biosimilars, and what priorities have you identified in this process?

Bahou detailed that his approach to integrating biosimilars into his organization revolves around addressing the escalating costs of drugs compared with patient premiums. He noted that his organization has focused on reducing costs while maintaining high-quality patient care through several strategic initiatives. These include standardizing and optimizing formulary management, actively promoting biosimilar adoption to mitigate expenses related to high-cost biologics, and implementing streamlined review protocols for biologic treatments. In collaborating with informatics specialists, his team has developed an electronic health record (EHR) tool to guide prescribing practices and ensure adherence to formulary guidelines. Additionally, his group purchasing organization enhances their procurement capabilities, enabling more cost-effective purchasing. Using real-time data and performance dashboards, his team can continuously monitor and reflect on their achievements in these areas.

Humphreys stated that the collective focus of her organization has been on addressing initial challenges related to physician confidence and patient acceptance. As the market has evolved and education efforts have matured, she has seen increased confidence among physicians and acceptance among patients. Now, the primary challenge lies with payers. Despite multiple biosimilars entering the market with favorable pricing, comprehensive coverage remains insufficient.

Initially, manufacturers were enthusiastic about the potential market share, particularly for high-demand products like adalimumab. Humphreys detailed that although 9 biosimilars launched last year with an average wholesale acquisition cost (WAC) nearly 80% lower than the adalimumab reference product (in the low WAC offers), they captured only 2% market share due to inadequate payer coverage.

Humphreys further discussed that while coverage is improving with CVS and ArchMed adopting more biosimilar-inclusive policies, payer acceptance continues to be a significant hurdle. This lack of coverage undermines manufacturers’ motivation, as developing a single biosimilar can cost between $100 million and $300 million. Without sufficient market share, manufacturers may withdraw from biosimilar research and development, reducing competition and allowing reference products to continue driving up health care costs.

Humphreys emphasized that challenges are multifaceted, encompassing payer acceptance, manufacturer incentives, and policy complexities. In the European Union, there is no designation for interchangeability. In the US, obtaining pharmacy-level interchangeability requires costly switching studies. Under the Biologics Price Competition and Innovation Act, biosimilars must demonstrate high similarity to the reference product and prove interchangeability to be substituted at the pharmacy level.

AJMC: What are key barriers and challenges that health care professionals face in adopting biosimilar into health care systems?

Despite biosimilars being highly similar to their brand-name counterparts and available at a lower cost, Bahou shared that he believes adoption remains low for several reasons. First, rebate contracts with pharmacy benefit managers (PBMs), which are often locked in for 3 years, can result in the original brand-name drug being cheaper for health plans after rebates. Second, ingrained prescribing habits make it challenging for physicians to switch to new medications. Third, the lengthy approval and commercialization process for biosimilars, which can take more than a decade, further delays their market entry and acceptance. Humphreys further elaborated that when patients are stable with limited or much-reduced disease exacerbations, switching to another product can be difficult and a cause of concern for the patient. These factors collectively contribute to the slow adoption of biosimilars despite their potential for cost savings.

Regarding biosimilars, Humphreys said, “Though both payer acceptance and the physician confidence [of biosimilars] have increased over the past 10 years, adoption rates remain low.” In endocrinology, noncompetitive pricing of biosimilars has hindered motivation to switch. In rheumatology, stable patients on maintenance medications are reluctant to change due to their previous challenges and the unfamiliarity of biosimilars. Additionally, operational challenges, such as contracting complications, balancing acquisition costs with reimbursement, and managing shelf space for multiple biosimilars, further complicate adoption. These factors collectively create significant barriers to the broader utilization of biosimilars in reducing health care costs.

Gluckman highlighted another important consideration regarding the cost to the patient. In the commercial market, patients may not experience a cost share difference when switching to a less expensive drug. Unlike payers, patients do not typically directly benefit from rebates, as rebates are paid from manufacturers to the plan sponsor. Unlike the commercial market, Medicare patients are unable to use manufacturer coupons to reduce cost shares, and there is no cost share in Medicaid.

He continued by sharing another challenge, describing that physicians might initially be uncomfortable discussing this switch due to previous resistance to generic drugs. However, this resistance has largely diminished among physicians and is expected to decrease for biosimilars. As more biosimilars become available, potentially 5 or 6 for a single product, payers may each have different preferred biosimilars, similar to the current variability in preferred brands.

AJMC: Can you discuss how your biosimilar strategy was developed and implemented to reduce health care costs at the system or health plan level?

Both Bahou and Humphreys discussed the challenges of integrating biosimilars into their health care system, and how implementing a comprehensive and collaborative approach was necessary. On this experience, they noted that executive leadership initiated a series of strategic meetings involving physicians, nurses, and pharmacy staff to assess cost-benefit analyses and facilitate change.

They stated that a significant barrier they had to overcome was altering established prescribing habits among physicians. To accomplish this, EHR tools that hard-coded the switch from reference products to biosimilars were implemented. This systematic approach ensured seamless integration into the prescribing process.

Humphreys reflected on the process and shared that it involved extensive education and collaboration. Her organization has what they refer to as ‘clinical institutes’, which are groups of various physician specialties that provide feedback to the system pharmacy and therapeutics (P&T) committee before the final voting. Typically, they are more open to implementing system P&T decisions, because their opinions are valued and incorporated into the final decision-making process. Her team effectively communicated with these clinical institutes, ensuring they were engaged and educated regarding biosimilars. This education extended to nurses and other specialty practice staff before presenting the topic to the system P&T committee for review. Once the P&T committee approved the biosimilars as comparable to reference products, they were considered interchangeable within the health system.

In parallel, their pharmacy contracting team leveraged this approval to negotiate favorable terms with biosimilar manufacturers. Given the diversity of payer mixes across their 7 states, reimbursement strategies were also evaluated, using CMS guidelines as a benchmark to ensure optimal financial outcomes.

Furthermore, they noted that their data science team developed robust dashboards and monthly reports to track adoption rates and identify challenges. Regular meetings with regional teams allowed them to address specific issues, such as 340B account management, to overcome barriers.

Bahou and Humphreys emphasized that when making a policy decision at the health system level, the pharmacy department needs to be empowered to facilitate the transition to biosimilars effectively. This strategic and inclusive approach ensured that the right medication was prescribed to the right patient at the right time, ultimately enhancing the adoption of biosimilars within the health care system.

AJMC: How does the choice of preferred biosimilar vary depending on payer coverage throughout your network of health systems spanning multiple states?

Gluckman emphasized the significance of acknowledging payer dynamics when addressing the variability of biosimilar strategies across local markets. He shared that payer dominance within specific markets dictates the selection of preferred biosimilars for coverage. Providers face the complexity of managing multiple payer preferences, each aligned with distinct biosimilar options. As the market expands with more biosimilars for each reference drug, this complexity further intensifies, necessitating thorough familiarity with diverse choices dictated by individual payers. Looking ahead, the development and adoption of electronic point-of-service tools aim to guide physicians toward preferred products during prescribing.

Bahou provided further insight, highlighting that the variability in preferred biosimilar choices across his extensive network of health systems spanning multiple states is influenced by distinct preferences among different payers, such as Providence Health Plan, CVS Caremark, and various PBMs like Express Scripts and Optum Rx. Each of these entities maintains specific preferred product lists shaped by unique rebate agreements with drug manufacturers. This diversity poses challenges for providers, who may encounter prescription rejections due to nonpreferred status; this may prompt them to explore alternative prescribing options or utilize patient assistance programs to mitigate cost barriers.

AJMC: Reflecting on your experience with implementing such a program within your health system, what advice would you give to other health systems seeking to implement similar initiatives?

Bahou suggested that ensuring effective communication and alignment among all stakeholders is paramount. Securing buy-in and commitment from experts involved in the use of biosimilars is critical for successful program implementation. Clear understanding of the program’s rationale is essential to garner support and facilitate execution. Continuous improvement is key, as learning and adapting are ongoing processes. Implementing tools such as electronic medical record integrations can streamline prescribing practices, enhancing adherence to preferred medication choices within health care systems.

Humphreys underscored an initiative that is focused on streamlining operations by eliminating duplicative processes and gaining endorsement from physicians and the P&T committee, emphasizing the pivotal role of collaboration in achieving operational efficiency. She detailed how her team transitioned all biosimilar reviews to a consent-agenda approach, simplifying the evaluation into unified subclasses per molecule, such as adalimumab, consolidating what previously required multiple separate reviews into 1 cohesive assessment. This method enabled seamless integration of new products into their streamlined process, subject to comparative evaluation by their contracting and payer teams to determine preferred selections. Additionally, she recognized the importance of stakeholder alignment across diverse physician groups, exemplified by considerations like support from rheumatology and gastroenterology specialists, which underscores the broader need for consensus in implementing successful strategies. Ultimately, effective stakeholder and health care professional support is pivotal and underscored by the need for targeted, concise educational outreach that adhered to her team’s short, sweet, and repeat philosophy.

AJMC: How do payer coverage and reimbursement policies, along with the role of group purchasing organizations (GPOs), impact the adoption of biosimilars in health systems, particularly concerning inventory management, specialty pharmacy operations, and cost management?

According to these health care leaders, payer coverage and reimbursement policies significantly influence the adoption of biosimilars in health systems, particularly regarding inventory management and specialty pharmacy operations. Decisions on managing inventory are often delegated to local and regional directors, allowing the autonomy to adapt based on market dynamics and facility-specific considerations. Larger institutions may stock multiple biosimilars according to anticipated patient demand and payer preferences, reflecting a strategy that aligns with both market trends and the needs of the patient population.

In addition, Bahou shared that GPOs play a vital role in the acquisition of medications, including biosimilars, and in managing costs effectively. A GPO negotiates contracts on behalf of numerous hospitals, allowing them to secure contracts at significantly deeper discounts than those that could be achieved independently. Without a GPO, health care systems would require a full-time team solely dedicated to negotiating with various manufacturers. Using the collaborative GPO approach enhances cost efficiency and supports the strategic adoption of biosimilars across health systems.

AJMC: How can health systems address the financial sustainability of biosimilars, particularly in light of potential reimbursement challenges in both infusion settings and outpatient specialty pharmacy prescribing?

Gluckman described the instances where reimbursement structures can vary based on the cost differential between products, such as injectables for macular degeneration. This variation in administrative costs can sometimes pose challenges for providers seeking to administer lower-cost alternatives. Creative payer-provider contracting is crucial in aligning reimbursement principles with the goal of delivering the most effective therapy at the lowest cost to patients. Innovative solutions are continuously developed to facilitate broader adoption of cost-effective treatments in health care practices.

Bahou added that the 340B Program medications, typically reimbursed at a reduced rate, contrast with new biosimilar products that are reimbursed differently based on their ASP relative to reference products. This financial structure influences decision-making for physicians involved in drug acquisition and infusion. Monitoring ASP changes is crucial, especially as many newly introduced biosimilars currently offer lower reimbursements compared to acquisition costs. Consequently, adoption decisions are often guided by payer mandates rather than cost advantages alone. Recent market events, such as the withdrawal of a pegfilgrastim biosimilar last year, underscore the volatility and complexity of biosimilar availability and pricing. This ongoing monitoring ensures health care providers remain informed and responsive to market dynamics, while manufacturers and payers also track these developments closely.

AJMC: What are your insights on the future of biosimilars, including anticipated approvals and potential market changes?

The health-system leaders emphasized that the future of biosimilars looks promising, with expansion into different therapeutic classes and more biosimilars on the horizon. Favorable policy changes are anticipated, and these developments are expected to improve biosimilar adoption, though some current challenges will persist. There is optimism, however, with increased efforts on Capitol Hill to promote biosimilars, which should boost physician and patient confidence and garner more policy support, ultimately leading to greater market penetration. It may take several years, similar to the timeline for generics, but the outlook is positive.

Bahou expressed confidence that competition in the biosimilar market is beneficial for patients and the health care system. Given that health care expenditure is nearing 20% of GDP, this reduction is critical for sustainability. Competition drives down costs, making medications more affordable, especially as more people require them in their later years.

Gluckman held the opinion that the pressure to reduce health care costs is immense, with an emphasis on maintaining similar efficacy. The future will likely see a reduction in barriers to lowering costs, driven by a collective responsibility to the public. Open communication and collaborative solutions will be essential as providers navigate both private and public spaces to achieve these goals.

KEY TAKEAWAYS

The integration of biosimilars into health care systems is crucial for managing escalating drug costs while maintaining high-quality patient care. Health care organizations are implementing strategies such as standardizing formulary management, promoting biosimilar adoption, and leveraging EHR tools to guide prescribing practices. Despite increased physician and patient acceptance over the past decade, significant barriers remain, including inadequate payer coverage, ingrained prescribing habits, and complex approval processes. Variability in preferred biosimilars across payers and regions adds to the complexity. Effective stakeholder communication, continuous education, and streamlined review protocols are essential for overcoming these barriers. Looking ahead, favorable policy changes and increased efforts to promote biosimilars are expected to improve adoption rates, reduce health care costs, and enhance market competition.