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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.
CVS Health uses and shares data as allowed by applicable law, and by our agreements and our information firewall.
This document contains references to brand-name prescription drugs that are trademarks or registered trademarks of pharmaceutical manufacturers not affiliated with CVS Health.
This page contains trademarks or registered trademarks of CVS Pharmacy, Inc. and/or one of its affiliates.
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.