Biosimilars

The large markups that hospital outpatient departments (HOPDs) place on biologic medicines are both causing plan sponsors’ costs to soar and muting the potential savings that could come from biosimilars, according to a new report from the Employee Benefit Research Institute (EBRI). One of the report’s coauthors says that health care provider consolidation is largely the culprit — and it’s an issue that plan sponsors may struggle to combat.

While physician practices also mark up the prices of provider-administered drugs, HOPDs generally raise them even more, explains Paul Fronstin, Ph.D., director of health benefits research at EBRI. “And that’s because they’ve got purchasing power, and the purchasing power is increasing as they acquire more and more physician practices,” he adds.

A new study from the Employee Benefit Research Institute highlights the high — and growing — markups that hospital outpatient departments assign to biologic drugs, while also examining the variation in how HOPDs and physician offices (POs) treat innovator biologics compared to their biosimilars.

The study analyzed medical and pharmacy claims data from Merative MarketScan Commercial Database — which covers nearly 25 million people with private health insurance — from 2013 to 2020, and it focused on seven innovator biologics and their biosimilars that had been launched as of 2020.

Over the next few years, numerous biosimilars are expected to hit the U.S. market, leading to more competition and potentially lower costs for some expensive medications. However, that will not be enough to offset the entrance of new high-cost drugs and expanded indications for specialty medicines, according to the latest Pharmaceutical Strategies Group (PSG) “Spend and Trend” report.

The analysis, published on July 25, found that the per member per year (PMPY) cost for specialty drugs was $1,169 in 2022, a 14.1% increase from the previous year. After factoring in rebates, the PMPY increased by 12.5%, from $822 in 2021 to $925 in 2022.

PSG projects that the pre-rebate and post-rebate PMPY in 2025 will be $1,712 and $1,370, representing a 46.5% and 48.5% increase from last year, respectively.

With the Inflation Reduction Act (IRA) implemented in a relatively short time frame, many uncertainties remain, including the type of information CMS will deem most useful in drug price negotiations and how the law will impact biosimilars. During a June 20 webinar on navigating the IRA, Mark McClellan, M.D., Ph.D., the Robert J. Margolis Professor of Business, Medicine, and Policy, and founding director of the Duke-Margolis Center for Health Policy at Duke University, addressed some of those issues and how he expects them to play out. McClellan, who served as FDA commissioner from 2002 through 2004 and CMS administrator from 2004 through 2006, also offered advice on what he thinks pharma manufacturers should do as the first steps of price negotiation loom.

The event was presented by Innopiphany and moderated by Lisa Kennedy, Ph.D., managing principal at the life sciences consulting company.

Following the launch of Amgen Inc.’s Amjevita (adalimumab-atto), a slew of other FDA-approved Humira (adalimumab) biosimilars entered the U.S. market in July under settlement agreements with Humira originator AbbVie Inc. Major PBMs quickly announced that they would add more biosimilars to their formularies to compete with Humira.

At the end of June, UnitedHealth Group’s Optum Rx said it will place Boehringer Ingelheim's Cyltezo (adalimumab-adbm) and Sandoz's Hyrimoz (adalimumab-adaz) on its formulary at parity with Humira starting July 1. The Cigna Group’s Express Scripts then said it would add three biosimilars — Cyltezo, Hyrimoz and adalimumab-adaz (the unbranded equivalent of Hyrimoz) — to its list of preferred drugs.

As expected, early July saw the launch of multiple biosimilars of AbbVie Inc.’s Humira (adalimumab). Most of them launched with wholesale acquisition costs (WACs) just slightly less than that of the reference drug, but a few undercut that price fairly significantly.

Of the seven agents — including a branded and an unbranded version of Hyrimoz (adalimumab-adaz) from Sandoz, a division of Novartis Pharmaceuticals Corp., that will be spun off into a new publicly traded standalone company in the second half of this year — five launched with a WAC 5% off Humira’s $6,922 price tag:

Following the launch of Amgen Inc.’s Amjevita (adalimumab-atto), a slew of other FDA-approved Humira (adalimumab) biosimilars entered the U.S. market in July under settlement agreements with Humira originator AbbVie Inc. Major PBMs quickly announced that they would add more biosimilars to their formularies to compete with Humira.

At the end of June, UnitedHealth Group’s Optum Rx said it will place Boehringer Ingelheim's Cyltezo (adalimumab-adbm) and Sandoz's Hyrimoz (adalimumab-adaz) on its formulary at parity with Humira starting July 1. The Cigna Group’s Express Scripts then said it would add three biosimilars — Cyltezo, Hyrimoz and adalimumab-adaz (the unbranded equivalent of Hyrimoz) — to its list of preferred drugs.

Since the first biosimilar for Humira launched in the U.S. this January, it’s been joined by several other biosimilars referencing AbbVie Inc.’s blockbuster immunosuppressive drug — with each manufacturer trying to differentiate their offerings in a suddenly crowded market. Major PBMs Optum Rx and Express Scripts have both responded by adding some of the newly launched biosimilars to their standard commercial formularies, while CVS Caremark appears to be still considering its options.

Experts who spoke with AIS Health, a division of MMIT, shared a variety of viewpoints about how coverage of the newly launched biosimilars is shaping up. But all are closely watching how PBMs, physicians and patients respond to the influx of competition for AbbVie’s cash cow, which has earned the drugmaker $208 billion globally since it was first approved by the FDA in 2002.

June 14: The FDA expanded the label of Pfizer Inc.’s Abrilada (adalimumab-afzb) to include the treatment of moderate to severe hidradenitis suppurativa in adults. The agency first approved the biosimilar of AbbVie Inc.’s Humira (adalimumab) on Nov. 15, 2019. Dosing starts with 160 mg via subcutaneous injection on day one or split over two consecutive days, then 80 mg on day 15, and then on day 29 and subsequent doses, 40 mg every week or 80 mg every other week. Drugs.com lists the price of two 40 mg/0.4 mL kits and two 40 mg/0.8 mL kits of Humira, each with two devices, as more than $7,299. Pfizer told AIS Health, a division of MMIT, that it would launch the tumor necrosis factor (TNF) inhibitor in “late third-quarter/early fourth-quarter 2023” per the settlement of patent litigation with AbbVie.

On June 30, Blueprint Medicines Corp. revealed that partner Genentech USA, Inc., a member of the Roche Group, will voluntarily withdraw Gavreto’s (pralsetinib) indication for the treatment of people at least 12 years old with advanced or metastatic rearranged during transfection (RET)-mutant medullary thyroid cancer who require systemic therapy. The FDA gave the indication accelerated approval on Dec. 1, 2020. Genentech said the decision, which was made in consultation with the FDA, was not due to new safety or efficacy data but rather due to the “feasibility” of conducting the Phase III confirmatory trial required for full approval. Confirmatory studies to convert the other indications of the kinase inhibitor, all of which have accelerated approval, to full approval are ongoing.