Biosimilars Critical to Increasing Market Competition, Lowering Costs

Helping Contain Brand Biologic Costs with Formulary Changes

InsightsfeatureJuly 31, 2019

While they represent great forward strides in helping prevent and treat often serious and complex conditions such as cancer, rheumatoid arthritis, multiple sclerosis, and hemophilia, they come at an unsustainable cost to payors and patients.

Biologics are the fastest growing class of therapeutic products in the U.S.1

Beginning July 1, we made several changes to our template formularies for categories that now have biosimilars available, to help deliver the lowest net cost.

*Nivestym and Zarxio are biosimilars for Neupogen.

The U.S. Food and Drug Administration (FDA) has

approved 23 biosimilar products to date.2 The most recent

approvals were for Ruxience, a biosimilar to Rituxan, for

the treatment of adult patients with CD20-positive B-cell

non-Hodgkin’s lymphoma, and Hadlima, a biosimilar to

Humira, for the treatment of several conditions, including

rheumatoid arthritis.3

Biosimilars may provide some potential for cost control.

Maximizing Savings Potential Through Formulary

Drug Class Preferred Drugs (as of 7/1/19)

Colony Stimulating Factor (Hematologic) Long acting

Neulasta Udenyca (biosimilar)

Colony Stimulating Factor (Hematologic) Short acting

Nivestym (biosimilar)*

Excluded Drugs

Fulphila (biosimilar)

GranixNeupogenZarxio (biosimilar)*

Although only a few have come to market, we expect

more to be launched over time. Two new biosimilars

for oncology were just launched: Mvasi, a biosimilar

to Avastin, and Kanjinti a biosimilar to Herceptin.4 The

availability of biosimilars in key therapeutic categories that

currently have only one or a few brand biologics available

creates competition and is a tool pharmacy benefit

managers (PBMs) like CVS Caremark can use to help

lower costs.

Brand Biologics or Biosimilars? It Depends

Our formulary plan design has included a biosimilar policy

since 2017. CVS Caremark was the first PBM to begin

considering biosimilars for formulary placement and will

continue to do so to better manage and contain client

drug spend. For clients who choose one of our template

formularies, new biosimilars are subject to a new-to-

market block upon launch and are unblocked only after

considering a range of factors including price and clinical

review by an independent committee.

Our approach to maximizing the savings potential of

biosimilars is to utilize competition to help drive the lowest

net cost for payors. We may do this by encouraging

uptake of the biosimilar as the lower-cost alternative or

by utilizing the biosimilar to drive a lower price for the

reference brand.

Considerations for whether to prefer a brand biologic or its biosimilar include:

Product quality and clinical efficacyWe review all existing literature to ensure products are placed where medically appropriate – all decisions are reviewed and approved by our independent CVS Caremark Pharmacy & Therapeutics Committee.

Established rebates and discounts

In some cases, the discounts we have negotiated with manufacturers mean the brand biologic offers greater savings and therefore a lower net cost.

Manufacturer reliabilityThe supplier’s experience and history of on-time production and delivery is critical to ensure there are no supply disruptions.

EXAMPLE:

In 2017, we excluded Neupogen in favor of the biosimilar, Zarxio.

More than 3/4 of patients switched to Zarxio because of the formulary change.5

1. https://www.fda.gov/drugs/biosimilars/industry-information-and-guidance.

2. Current as of 07/23/2019. Pipeline Services, July 2019.

3. https://www.fda.gov/drugs/biosimilars/biosimilar-product-information?utm_campaign=FDA%20approves%20Ruxience%20%28rituximab-pvvr%29%2C%20a%20biosimilar%20to%20Rituxan%20%28rituximab%29&utm_medium=email&utm_source=Eloqua.

4. https://www.prnewswire.com/news-releases/amgen-and-allergans-mvasi-bevacizumab-awwb-and-kanjinti-trastuzumab-anns-now-available-in-the-united-states-300887871.html.

5. CVS Health Internal Analysis, 2019.

6. https://www.centerforbiosimilars.com/news/biosimilars-council-white-paper-condemns-patent-abuses-defends-patent-settlements.

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Image source: Licensed from Getty Images, 2019.

©2019 CVS Health. All rights reserved. 106-49487A 073119

Troy Brennan, M.D.Executive Vice President and Chief Medical Officer, CVS Health

Biosimilars are key to increasing market competition and lowering costs. But an all-or-nothing approach is not the answer for payors or patients. Finding the right balance between brand biologics and biosimilars will help lower plan cost while ensuring patients have access to these important therapies.

CVS Health will continue to monitor the pipeline, review all new drugs, and evolve our formulary strategies to keep pace with the changing market.

Increasing Uptake, CompetitionDespite the availability and proven value of biosimilars, they

have seen slow uptake in the market, partly because patent

litigation and pay-for-delay tactics by brand manufacturers

have often delayed the launch of many of these products, even

after they’ve been approved by the FDA.6 Concerns about

patient outcomes can also affect prescribing by providers.

Better provider education and information at the point of

prescribing can help reverse this trend.

With real-time prescription benefits, we can help providers

make more informed prescribing decisions by sending patient-

specific plan and cost information through electronic health

record systems and prescriber portals. Real-time prescription

benefits let providers see all drugs covered by a patient’s plan,

both brand biologic and biosimilar, along with associated

patient out-of-pocket costs, so they can choose the most

clinically appropriate and cost-effective option.