Helping Contain Brand Biologic Costs with Formulary Changes

Specialty Pharmacy Pipeline | Drugs to Watch

Anticipated Launches | Q3 – Q4 2019

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Biologics are the fastest growing class of therapeutic products in the U.S.https://www.fda.gov/drugs/biosimilars/industry-information-and-guidance. 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.

Biosimilars may provide some potential for cost control. The U.S. Food and Drug Administration (FDA) has approved 23 biosimilar products to date.Current as of 07/23/2019. Pipeline Services, July 2019. 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.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. 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.https://www.prnewswire.com/news-releases/amgen-and-allergans-mvasi-bevacizumab-awwb-and-kanjinti-trastuzumab-anns-now-available-in-the-unitedstates- 300887871.html. 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.

Maximizing Savings Potential Through Formulary

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.

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.

For instance, in 2017, we excluded Neupogen in favor of the biosimilar, Zarxio. Because of the formulary change, more than three-quarters of patients switched to Zarxio.CVS Health Internal Analysis, 2019.

Considerations for whether to prefer a brand biologic or its biosimilar include:
	Product quality and clinical efficacy. We 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 reliability. The supplier’s experience and history of on-time production and delivery is critical to ensure there are no supply disruptions.

Increasing Uptake, Competition

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

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.