The Future Of Affordable Healthcare: The Impact Of Biosimilars On Employer-sponsored Pharmacy Plans

First introduced in 2002 for the treatment of rheumatoid arthritis, Humira has impacted the pharmaceutical market in numerous ways. It has become one of the world’s best-selling drugs, generating more than $200 billion in revenue with annual global sales exceeding $20 billion. At around $7,000 per 30-day supply, Humira has historically been one of the most expensive treatments under an employer’s pharmacy plan.

The expiration of Humira’s patent in early 2023 paved the way for a new wave of biosimilars, offering a significant opportunity for employers to manage healthcare costs while maintaining high-quality care for their employees. Biosimilars, which are very closely related to their reference medicine, are a growing segment of the pharmaceutical market, particularly for chronic and debilitating conditions. As more biosimilars enter the market, the potential for cost savings and increased patient access offers a competitive advantage to employers that want to ensure their employees have the best prescriptions possible.

Understanding Biosimilars and Their Impact on Drug Affordability

Given the popularity of Humira, there was significant competition to create an affordable alternative via biosimilars. Unlike generic drugs, biosimilars are not exact replicas of their reference products but must demonstrate no clinically meaningful differences in terms of safety, purity, and potency before they can be approved by the FDA. The first Humira biosimilar, Amjevita (adalimumab-atto), was launched by Amgen in January 2023, marking the beginning of a new era of competition in the adalimumab market. Currently, the FDA has approved ten Humira biosimilars, with more pending approval. For the first time in years, the cost of drugs like Humira, used to treat inflammatory conditions, is declining for most employers.

However, employers should be aware that while biosimilars offer cost-saving potential, there are challenges to their adoption. Physician and patient hesitancy, formulary placement, concerns about safety and efficacy, and marketing strategies, which at times aim to steer patients toward alternative products, can slow the integration of biosimilars into clinical practice.

It’s also important to note that each contract is unique in terms of what the net cost payers actually pay for these drugs after considering the value of the rebate payment. Regardless, most employers continue to seek – and should seek – out innovative solutions designed to drive down the overall cost of these and similar drugs.

Strategic Considerations for Employers

The success of Humira biosimilars is just the beginning. As more blockbuster biologics lose their patent protection, the biosimilar market is expected to expand rapidly. Over 100 biosimilars are currently in development, targeting a wide range of therapeutic areas, including ophthalmology, bone health, and immunosuppressants. This trend will transform the pharmaceutical landscape, with biosimilars playing a crucial role in reducing healthcare costs and improving patient access.

As employers consider incorporating biosimilars into their formularies, several factors should be taken into account. The potential for cost savings with biosimilars is significant, but it may take time for these savings to materialize fully. Employers should monitor the market closely, as increased competition among biosimilars is expected to lead to more substantial price reductions in the coming years.

Employers should work closely with their pharmacy benefits managers (PBMs) to integrate biosimilars into their formularies effectively. Some PBMs have already added biosimilars to their preferred lists, which can help drive adoption and cost savings. For example, CVS recently accelerated the adoption of its preferred biosimilar, Hyrimoz, by removing Humira from its major national commercial formularies.

It’s crucial for employers to take an active role in managing biosimilars, rather than leaving it solely to PBMs. Education is key to overcoming the challenges associated with biosimilar adoption. Employers should adopt a strategy to ensure that their employees are informed about the safety, efficacy, and cost benefits of biosimilars. Real-world evidence and case studies can be powerful tools in demonstrating the value of these drugs and your point solutions partners, consultants, or benefits teams should have a strategy to increase adoption and track results.

Looking Ahead: The Future of Biosimilars

Employers who get ahead by strategically incorporating biosimilars into their formularies will be well-positioned to manage their pharmacy spend effectively. As these lower-cost alternatives continue to become more widely accepted and available, biosimilars are tracking to improve patient access, reduce healthcare costs, and stimulate further innovation in the field. While challenges remain, the future of biosimilars looks promising, with the potential to transform the way we approach the treatment of a wide range of chronic and life-threatening conditions.