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Lowering the Cost of Care:
How Biosimilars Are Changing the Landscape for Patients and Providers

History of biosimilars in health care

In recent years, biologic medications have become some of the most expensive drugs in health care, with annual costs ranging from tens to hundreds of thousands of dollars. This high price tag has placed biologics under scrutiny from payers, patients and practitioners. To address these concerns, the Biologics Price Competition and Innovation Act (BPCIA)¹ was signed into law in 2010, establishing a pathway for the approval of biosimilars, biologic products that are not chemically identical but very similar to the reference product.

Since then, the Food and Drug Administration (FDA) has approved over 60 biosimilars², all meeting the standards for comparable efficacy and safety to the reference product. Among these, Humira biosimilars have garnered attention, with 10 biosimilars launched since January 2023. These alternatives come at lower prices, some up to six times lower than the original, prompting major pharmacy benefit managers (PBMs) to recommend different biosimilars based on cost and access for members.

The role of wholly owned subsidiaries in the biosimilar marketplace

Despite these cost-saving opportunities, biosimilars have faced slow uptake in the U.S. health care system. Providers and patients have been cautious, often hesitating to switch due to concerns regarding safety and efficacy. Formularies, which frequently categorize both reference biologics and biosimilars on the same tier, have also limited incentives for change.

However, biosimilar market share has been steadily growing. In April 2024, CVS led the charge in becoming the first PBM to exclude Humira from its standard formularies, with a preference for the biosimilar product Hyrimoz. To support this transition, CVS partnered with³ Cordavis⁴, a wholly-owned subsidiary, to co-produce and commercialize Hyrimoz, ensuring a consistent supply and facilitating a smooth conversion for patients. Following CVS’ lead, other PBMs have adopted similar strategies, with Express Scripts partnering with Quallent Pharmaceuticals to co-produce both Cyltezo and Simlandi⁵ and Optum Rx partnering with Nuvaila⁶ to co-produce Amjevita, with estimated savings of up to 80% off Humira’s list price. As of mid-2024, Humira biosimilars have captured 18% of the market, with Sandoz’s and Cordavis’ Hyrimoz leading at 13%.⁷ With PBMs increasingly prioritizing biosimilars in formularies, this share is expected to grow heading into 2025.

Preparing for the Stelara biosimilar launch and beyond

2025 promises exciting advancements, including the estimated approval of biosimilars
for Xolair, Solaris and Simponi. Most notably, this year also marks the anticipated launch of biosimilars for Stelara (ustekinumab), a biologic used to treat several inflammatory conditions, including plaque psoriasis, psoriatic arthritis, Crohn’s disease and ulcerative colitis (UC). Using Employers Health’s book of business from January to September 2024, we observed an approximate total gross cost per prescription for Stelara of $23,700. This equates to a total gross cost of $91 million spent over the first nine months, or $6.71 per member per month. With FDA approvals expected for all labeled indications, these Stelara biosimilars could further expand options for affordable, effective biologic treatments, paving the way for a new era in the management of costly conditions.

As of today, seven Stelara biosimilars have received FDA approval.⁸ Patent litigation settlements have delayed the launch of these products until early 2025 (view schedule). Unlike the challenges with Humira’s interchangeability designation, Wezlana, the first Stelara biosimilar to market, has been granted exclusive interchangeability status for all dosage forms and strengths across every condition approved for the reference product. Having this interchangeability designation will allow pharmacists to substitute the biosimilar without the authorization of a prescriber, streamlining access and reducing costs while maintaining treatment consistency for patients. Compared to the limitations of Humira and its biosimilars’ interchangeability designations, the Stelara biosimilars’ broad interchangeability status can enhance confidence and compliance, making the transition more manageable for both patients and providers. Unfortunately, legal constraints prevent other biosimilars from being marketed as interchangeable during Wezlana’s 12-month exclusivity period, despite Pyzchiva and Otulfi receiving FDA approval for interchangeability.

The “Big 3” biosimilar decisions

Among the “Big 3” PBMs, Optum Rx has been the only one to specify its preferred Stelara biosimilar for formulary inclusion, with a preference for Wezlana. Meanwhile, Express Scripts has indicated it will soon add a preferred Stelara biosimilar to its formularies but has yet to disclose the product it intends to prefer.9 Both Optum Rx and Express Scripts have highlighted the advantage for members in navigating the rapidly evolving biosimilar landscape. Members will benefit significantly from these changes by having access to the Stelara biosimilars with a $0 cost share under both PBMs. CVS has yet to announce its approach regarding the Stelara biosimilars, but if it follows a similar approach to its Humira biosimilar transition, we can expect a swift switch to one of these alternative agents once they become available.

Although many questions remain regarding approaches to the Stelara biosimilar, the experience and insights gained from the recent switch to the Humira biosimilars have established a strong foundation to ensure a successful switch. This prior experience provided valuable guidance in planning a smooth transition for members to other biosimilar products, ensuring both continuity of care and cost efficiency. For any additional questions about biosimilars or strategic considerations, reach out to the Employers Health clinical team at [email protected].

References

1. https://www.fda.gov/drugs/guidance-compliance-regulatory-information/implementation-biologics-price-competition-and-innovation-act-2009
2. https://www.fda.gov/drugs/biosimilars/biosimilar-product-information
3. https://www.cvshealth.com/news/pbm/cvs-caremark-accelerates-biosimilars-adoption-through-formulary-changes.html
4. https://www.cvshealth.com/news/pbm/cvs-health-launches-cordavis.html
5. https://www.evernorth.com/articles/evernorth-announces-humira-biosimilar-available-0-out-pocket-accredo-patients-june
6. https://www.optum.com/content/dam/o4-dam/resources/pdfs/forms/PharmacyPassages-EHB-August-2024.pdf
7. https://www.biospace.com/business/abbvies-humira-continues-to-lose-market-share-as-biosimilars-gain-ground-report
8. https://www.centerforbiosimilars.com/view/fda-approves-steqeyma-the-seventh-stelara-biosimilar
9. https://www.evernorth.com/articles/evernorth-announces-another-step-forward-lowering-drug-prices-making-stelara-biosimilar