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Prioritizing Lower-Priced Biosimilar Medications
Legacy PBM business models are fundamentally misaligned with the needs and interests of plan sponsors and their members.
During the past year, there has been a lot of buzz about biosimilars as lower-cost alternatives to biologic drugs. As you know, biosimilars are biologic medications that are highly similar to drugs already approved by the FDA. They are used for treating the same conditions and have the same mechanism of action as the reference, or originator, products. Through clinical trials, biosimilars have been proven to be just as safe and effective as their reference biologic drugs, meeting the same quality standards.
There is a growing expectation that biosimilars will transform the specialty drug landscape just like generic drugs did for traditional medications. They can increase access to important therapies and improve patient outcomes, all while providing a lower-cost option for patients.
My company, EmpiRx Health, has been an early adopter of biosimilars because they offer the same level of safety and effectiveness as the original products, but at a lower cost—sometimes substantially lower. In fact, we were one of the first PBMs that started to prefer lower cost biosimilars to original products. One must question why other PBM organizations have not readily embraced these lower cost biosimilars when they provide the same efficacy, just at a reduced cost.
Here's the unfortunate truth: Many other PBM companies are not prioritizing the lower cost biosimilars because doing so would run counter to their business models. These legacy PBM business models are fundamentally misaligned with the needs and interests of plan sponsors and their members.
Will PBMs stick with their old business model, which maximizes drug rebates at the expense of plan sponsors and their members, or will they embrace the value-driven approach that puts customers and patients first?
This issue came into stark focus earlier this year with the launch of seven different biosimilars for Humira, a drug that has represented a significant portion of health benefits plan spending since its introduction in 2002. The pricing for the new Humira biosimilars fluctuated widely, with some products being just 5% lower than the original drug’s list price, while others were priced more than 80% less. If all PBM companies were truly focused on meeting the healthcare and financial needs of their customers and members, there would be a near universal inclusion of the lower priced Humira biosimilars in the formularies of these PBMs. But that has not happened.
EmpiRx Health was the only PBM that decided to prefer the lower cost Humira biosimilars in its formularies. Prior to making this decision, EmpiRx Health’s pharmacy experts performed a thorough review of available clinical data, dosing and formulation options, and other critical factors impacting member experience. Following that comprehensive review and analysis, we decided to select two of the lowest priced Humira biosimilars for our formulary. This Humira formulary decision was consistent with our value-based, clinically-driven pharmacy care approach, which puts the pharmacist at the center of the care model.
I believe how PBM companies respond to the growing biosimilars opportunity is another crucial test for our industry. Will PBMs stick with their old business model, which maximizes drug rebates at the expense of plan sponsors and their members, or will they embrace the value-driven approach that puts customers and patients first?
We invite our PBM colleagues to join EmpiRx Health in transforming the pharmacy care industry for the benefit of customers and their members/patients. Embracing the lower priced Biosimilars is a good place to start.
Danny Sanchez is the CEO of EmpiRx Health.
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