Pharmacy benefit companies are strong proponents of a highly functioning biosimilar market and have advocated for policy changes that will increase generic and biosimilar uptake and put an end to brand manufacturers’ tactics to extend exclusivity on brand-name biologics. As more biosimilars come to market, competition increases, prices decrease, and employers and other health plan sponsors get more choice and flexibility when designing prescription drug benefits.
Recently, Alex Brill, founder and CEO of Matrix Global Advisors (MGA), published a new blog, “Biden Budget Proposes a Step Toward Biologic Drug Competition,” highlighting how the proposed budget will help bring more biosimilars to market. Brill writes:
“Specifically, the President’s budget proposes eliminating the two-tiered approval of biosimilar drugs (competitors to branded biologic “reference” drugs) by ending the interchangeability designation and deeming all approved biosimilars to be interchangeable with their reference biologic.
“At present, a biosimilar without an interchangeability designation cannot be substituted at the pharmacy counter for its reference biologic product without physician approval. Unlike with regular generic drugs, a manufacturer has to take additional steps for its biosimilar to be considered interchangeable with the reference product and be eligible for substitution by a pharmacist. For example, the FDA has approved 10 biosimilars that reference AbbVie’s Humira (adalimumab), the top-selling drug of all time, but only three have been designated as interchangeable. As biosimilars used in the pharmacy benefit (like adalimumab) begin to enter the market, pharmacist substitution has the potential to generate substantial savings.”
Brill explains how eliminating barriers to biosimilars will encourage greater competition in the market, leading to more savings on prescription drug costs:
“The Administration’s proposal to “eliminate the statutory distinction between the approval standard for biosimilar and interchangeable biosimilar products and deem that approved biosimilars are interchangeable” would foster greater price competition by putting all biosimilars referencing the same brand biologic on equal footing with each other and facilitate more competition between biosimilars and their reference product.
“This proposal is a timely and appropriate example of policy reform geared toward harnessing market-based forces to encourage price competition and generate cost savings. By removing barriers to competition between and among biosimilars and their reference products, all stakeholders—patients, physicians, pharmacists, and payers—can realize the savings from lower prices that competition yields.”
Read the full MGA blog HERE.
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New SSR Health Data on Net Prices for Prescription Drugs and Net Price on Brand-Name Humira is Shining Example of Competition Reducing Drug Costs
New data from SSR Health for the fourth quarter of 2023 finds that the net prices that health plans paid for medicines — after subtracting rebates and discounts — fell by 2.8 percent – the largest decline ever measured by the firm. How did this happen? In a word: competition. Specifically, the pricing pressure on the brand version of Humira from nine biosimilar versions resulted in the net price of Humira significantly decreasing and bringing down the net price trend overall.
As PBMs and health plans placed Humira biosimilars on formularies, often preferring the biosimilars alongside the brand, the Humira net price declined to around $29,800 at the end of last year from $48,000 at the end of 2022, a nearly 38 percent drop, the SSR Health analysis found. Additionally, net prices decreased for the entire rheumatoid arthritis drug class as well as for psoriasis medications.
See the STAT News story on the SSR Health data HERE.
Learn more about how pharmacy benefit companies support and encourage biosimilar competition HERE.
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PCMA is the national association representing America’s pharmacy benefit companies. Pharmacy benefit companies are working every day to secure savings, enable better health outcomes, and support access to quality prescription drug coverage for more than 275 million patients.
Learn more at www.pcmanet.org
