Stan R. Mehr

Patients see drug couponing as a way to lower or avoid cost sharing on brand-name prescription drugs. Payers view drug couponing as undercutting their pharmacy benefit design. Pharmaceutical companies see drug couponing as the key to greater sales, especially when they are in nonpreferred formulary positions (i.e., after generic competition is launched).

In a value-based pharmacy benefit design, the payer assigns medications that are highly effective, lower cost, or both to lower formulary tiers, to make them attractive to plan members. On the other hand, agents that are deemed to be of less value are placed in higher tiers, or even excluded from coverage. Simply, lower cost sharing means greater incentive to use and better sales for the industry. However, drug couponing, which is now ubiquitous, remove the patient incentive to use higher value drugs (and the disincentive to use lower value agents).

In the case of biosimilars versus originator medications, drug coupons offered by the manufacturer of Enbrel

, for example, actually make it less expensive for the patient to purchase the originator than the biosimilar, assuming a lower-copay biosimilar tier. That is, unless Sandoz, the maker of the approved etanercept biosimilar, matches Amgen’s couponing program. In that case, there would be incentive or disincentive for either product, from the patient’s perspective.

In dealing with couponing programs, payers have 3 options: (1) let things be and hope that if patients have little cost sharing perhaps adherence will improve overall, (2) ban the use of couponing by members (in other words, don’t allow network pharmacies to accept them), or (3) exclude from coverage any drug for which coupons are offered (this would be a lot of drugs today).

, couponing has boosted prescriptions for branded medications by greater than 60%. For the nation as a whole, every copayment coupon adds up to $120 million over the first 5 years after a generic drug is introduced. For the manufacturers of 85 medications that first faced generic competition between 2007 and 2010, couponing boosted spending anywhere from $700 million to $2.7 billion over a scenario in which couponing did not exist.

To preserve the value of biosimilars, payers will have to carefully mull their limited options. Excluding coverage of originator products that have copayment coupons may not be practical, because of the delicate situation regarding switching of biosimilars and lack of an interchangeable designation, especially for patients on established therapy. Banning the use of copayment coupons seems like a more reasonable option for payers, but one that may cost them members, particularly in today’s heated competitive market. 

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Payers will have to carefully mull limited options.

Drug Couponing: Better or Worse for Biosimilars?

The winds of change are blowing, and they are blowing throughout the health care industry. Value-based health care has forced several systemic changes, including movement from fee-for-service based reimbursement to alternative models, including shared savings and risk sharing.

One of the most powerful blasts has been the discussion over outcomes-based and risk-based contracts for pharmaceuticals. These are being discussed more commonly at trade and professional meetings. Outcomes-based contracting sounds, at this point, like the way things are heading, but the devil is in the details in this form. Many payers are taking a wait-and-see attitude, specifically waiting for the results of large, leading-edge organizations’ efforts to see if they are successful. They may be waiting a long time, though. In order to do a truly transparent return-on-investment analysis, one has to know how the contract was structured and the extent of the pharmaceutical company’s risk. Yet health plans and insurers, and drug manufacturers, have been highly protective of this proprietary information, unwilling to give the competition any hints about contract specifics.

However, one type of alternative reimbursement model that has been the subject of a bit less press is the 

indication-specific pricing (ISP) contract

. Under ISP, the payer and pharmaceutical partner sets different levels of pricing for each indication or for patient subpopulations eligible for treatment. It is a logical step in alternative reimbursement models, because a medicine that is approved for multiple indications may not be as effective for each indication. Think of it this way: why should the health system pay the same price, on a per-dose basis, for a drug that is only 40% effective in treating psoriasis versus 75% effective in relieving the symptoms of psoriatic arthritis? Or a cancer drug that is far more effective in treating early stage colorectal cancer than in advanced stage non—small cell lung cancer?

The result is a misalignment between value of the intervention and its cost to patients, plans, and society. Indication-specific pricing is not without precedent. One classic example is the use of sildenafil as a erectile dysfunction medication (Viagra

for pulmonary arterial hypertension. Players like Express Scripts are looking at ISP for gaining value in cancer agents with multiple indications.

How can ISP be used in biosimilar introductions? Any of the key anti-inflammatory originator agents have multiple indications, and biosimilars have been tested generally in one of them in clinical trials. The US Food and Drug Administration (FDA) may decide further to extrapolate to other indications based on the totality of evidence in terms of a biosimilar’s structural, pharmacologic, pharmacodynamics, and mechanism of action. What if, to help clinicians gain comfort with the biosimilar and increase rapid uptake, the indication for which the medication was clinically tested was priced at a lower level than for other indications? It is highly unlikely that the maker of an originator product will want to match this pricing scheme.

Although ISP has several challenges, including the big one—how to identify the indication for which the drug was prescribed&mdash;it is not impossible. The winds of change may be blowing this way. 

Value-based health care has forced several systemic changes.

Indication-Specific Pricing and Biosimilars

Partners Mylan and Biocon announced on November 9 that their 351(k) application for a 

 has been filed with the US Food and Drug Administration (FDA). This filing of MYL-1401O marks several firsts: the first biosimilar application for this product, the first biosimilar filing for an agent that directly treats cancer, and the first 351(k) filing for the Mylan—Biocon partnership.  

Mylan president, Rajiv Malik, stated in a press release, “Our trastuzumab biosimilar is already being sold in 11 developing markets, including India, and we look forward to bringing the product to market in the US and Europe upon approval.” Biocon’s CEO, Arun Chandavarkar, added, “The submission of our proposed biosimilar trastuzumab with the FDA is an important milestone of Biocon and Mylan's joint, global biosimilars program and demonstrates our commitment to provide access to high-quality and affordable biologics to patients across the globe.”

The Mylan—Biocon partnership aims to develop and market 6 possible biosimilar molecules. Mylan has exclusive commercialization rights in several regions, including North America, Australia, and Europe.

The global market for Herceptin stands at 

, and it is a stalwart revenue producer for Roche. Mylan and Biocon will likely face additional competitors fairly soon, as Celltrion and Samsung Bioepis have already filed trastuzumab applications with the EMA, and Amgen is moving quickly to develop their own version.

 that have been filed or approved have been for supportive care (epoetin, filgrastim, and pegfilgrastim. Additional oncology therapeutics are being investigated, but not yet filed with the FDA, and include rituximab and bevacizumab. 

Mylan Files Application for First Herceptin® Biosimilar

Sometimes I can be excused for taking important details for granted. Scientists, medical professionals, and health systems, however, do not have that luxury. Two recent studies reminded me of classic gaps, in not only broader biosimilar discussions, but in pharmaceutical testing and use overall. For the purposes of this discussion, the actual study results are less the point than the objectives of the investigators. 

With biosimilars, as with any conventional agent, a good deal of research is done using commercial or working-age populations, and unless the target indication is for pediatric use, testing on younger patients is rarely done. On the other hand, testing on older populations is extremely important, especially for diseases that are more likely in the older population (and in some cases, patients over 75 years of age). For example, older patients may have renal impairments that could interfere with drug clearance, they may exhibit differences in drug metabolism, and the possibility exists that drug interactions in the elderly may more likely result in clinical manifestations. 

French investigators sought to better understand how the biosimilar agent epoetin zeta (available only in Europe) worked in patients younger and older than 70 years for the treatment of chemotherapy-induced anemia. The result of this observational study was that the tolerability and effectiveness of an epoetin biosimilar for treating chemotherapy-induced anemia was equivalent in patients at least 70 years old compared with younger patients.

Another key component of some biosimilar products (self-administered injectables) that is often glossed over is the injector itself. These devices attempt to make the patient as comfortable as possible and dosing simple, and in general, the pharmaceutical manufacturers do an excellent job of engineering these devices.

In a market research study sponsored by Biogen (maker of a biosimilar etanercept brand in Europe called Benepali), German and Swiss investigators sought opinions from patients with rheumatoid arthritis about their preference for the Benepali autoinjector or Enbrel’s autoinjector. Needless to say, Biogen’s injector came out on top. The most important attributes of either injector, they said, were (in ranked order), ease of operation, ease of grip, and intuitive use.

These basic issues often get lost in the broader discussion of biosimilar uptake and utilization. For example, what is the benefit to payers, patients, or physicians of an interchangeable biosimilar that must be injected, if no one is comfortable with the injector device? 

It can also be argued that accurate characterization and analysis of a biosimilar prior to clinical trials should predict its equivalent effect to the originator product in older and younger patients alike. In any case, this subgroup analysis is very important in comparative clinical trials and should not be glossed over. 

Sometimes the actual study results are less the point than the objectives of the investigators. 

Two Reminders in Biosimilar Discussions

Amidst the several studies demonstrating the equivalence between Celltrion’s Inflectra

, reports  from a team of investigators from the US and Turkey (including Janssen researchers) at the recent American College of  Rheumatology’s annual meeting may temper enthusiasm for the new biosimilar. Inflectra was launched in the US by Pfizer  in late November. 

These 2 retrospective studies attempted to better understand patient adherence with both the biosimilar (marketed as Remsima in Turkey) and originator product, as part of switching protocols. Patient data were examined from the Turkish National Ministry of Health database.

, 1,044 patients with rheumatoid arthritis who had not previously taken infliximab either started treatment with Remicade or Remsima (roughly 80% and 20%, respectively). Patients receiving Remicade recorded a mean 5.2 infusions and a mean dose of 4.7 vials per infusion (q8wks), compared with 3.6 doses and 5.8 vials (q9wks) for Remsima. After 6 months of treatment, 55% of those taking the originator drug discontinued treatment (partly the result of switching). Twenty-four percent of these patients switched to at least 1 other biologic (8% switched to Inflectra). For those starting Remsima treatment, discontinuation was recorded in 63%, with 31% switching to another biologic therapy (20% initially switched to Remicade).

The discontinuations may be significant, but the switching data may not be. Without understanding why a patient would switch from a biosimilar to the originator product, this may be difficult to tease out the implications. Clinically, it may not make a great deal of sense to switch from a biosimilar to the originator product (because of the similarity in the molecules and effects), whereas economically, it would make more sense to switch from Remicade to Remsima. If a patient is not responding adequately to one, the more likely protocol would be to try a different biologic or other approach.

Further real-world data are needed to understand if this truly indicates the discontinuation or switch to another therapy because of ineffectiveness, side effect, or inability to tolerate the medication.

Enthusiasm dulled for new US biosimilar Inflectra for Rheumatoid Arthritis.

Switching and Discontinuations for Remicade and Its Biosimilar in Turkey

To this point, information about clinicians’ interest in prescribing biosimilars was largely limited to their comfort levels with the safety and efficacy of these agents compared with that of the originator products. They’ve shown a reasonable reluctance to prescribe biosimilars in patients whose disease activity has been stable with the use of an originator biologic, but have been more open to using them in patients who had not received biologics before. A new study in a small sample of physicians implies that the cost factor could be a bigger influence in their prescribing habits than suspected before.

 of 150 physicians (30 dermatologists, endocrinologists, gastroenterologists, oncologists, and rheumatologists) was conducted in September 2016. Eighty-four percent are convinced that they will be prescribing biosimilars within 3 years.

Interestingly, the survey demonstrated that clinicians, too, are influenced by the cost savings biosimilars may bring—an area that was considered of interest mostly to payers. In their study, physicians would increasingly consider prescribing biosimilars as the cost difference with the originator product increased, from 28% with a 5% discount, 59% with a 15% discount, and 77% with a 25% discount. This may signal clinicians’ concern with the rising cost of biologics. The study authors did not specify whether these prescriptions would occur in a treatment-naïve or a switching scenario. However, three-quarters did admit that 

cost is important to their prescribing decision

, but they would be unlikely to know what the patient’s cost share may be at the time of prescription.

Physician wariness of the biosimilars is still evident, according to InCrowd President and Co-founder Diane Hayes, who said, "Data reflect that during this time when biosimilars are of strong interest to insurers and health care systems for cost control, physicians are not rushing to issue a blank check for their substitution, and are keenly aware of their need to thoughtfully consider any such use." The survey did find that 67% would prohibit, at least in some cases, pharmacist-substitution of a prescribed originator product.

New study in a small sample of physicians implies cost factor could be a big influence.

Can Physician Prescribing of Biosimilars Be Influenced by Price? 

Value-based contracting may be a boon to biosimilars, for obvious reasons: a biosimilar priced significantly below the innovator product takes care of the cost denominator of the value equation. Equivalent outcomes take care of the quality numerator. The only question remaining is access.

Gaining rapid uptake for biosimilar products is a challenge for manufacturers and payers. Clinicians and patients are less concerned because the originator products are already available. And the drug makers can do what they must to get preferred positioning, resulting in a deal that excludes the originator from coverage, or they can beat their competition to the punch and offer an outcome- or risk-based contract. In this contract, the manufacturer guarantees the drug’s performance (based on some prespecified measure[s]) and works out a system of monitoring performance. Although this may sound straightforward, it is not. (Otherwise, plans and insurers would be clamoring for outcomes-based contracting across many disease states.)

These contracts tend to be utilized in diseases where the outcomes are easier to measure: the PCSK9 drugs, where monitoring drug adherence and cholesterol concentrations are key, or osteoporosis drugs, where bone fractures or admissions to hospitals for fractures can be easily flagged. For biosimilars, this may be easier to do for autoimmune medications—for example, because of drug discontinuations, the need for dose escalation, or agreed-to disease activity scale reductions&mdash;than for oncology drugs. In the latter case, there may be difficulty in coming to agreement on the outcome of interest, such as progression-free, disease-free, or overall survival, and measuring populations versus individual patients.

These are technical issues that can be overcome if interest on both sides is sufficient to drive value-based contracting forward. In an outcomes-based contract, the risk is generally one-sided, on the pharmaceutical company’s shoulders; this is not unreasonable. Biologic medications cost a great deal of money, based partly on their development costs and what the market will bear. Therefore, assuming the drug maker has extreme confidence that their medication will successfully treat appropriate patients, there should be no problem. There is a bit of risk on the payer side, however: they will have to expend money and resources to collate and analyze the results of drug treatment.

Complicating these issues is the variability in individual patient presentations: comorbidity burden, age, and adherence can all contribute or hinder success. A pharmaceutical company may argue that if its drug is successful in treating a patient and proving its overall value, should it be entitled to lower discounts (ie, higher payments) in line with this value? I’ve not heard it argued yet that drug companies are underpricing their products.

For biosimilar makers, we need to be realistic on 2 fronts: (1) in early launches, drug prices were not lowered much (especially in the face of rising originator prices) and (2) these are not generic drugs and will not be priced as such. In other words, no biosimilar maker is expecting to earn $50 million per year in sales of product. They are expecting a large bite of multibillion dollar revenues. If the competition on the market intensifies, and say, 3 infliximabs are available for use, each company can still cash in revenues of $1 billion—a substantial 

drop in the $5.78 billion in Remicade sales

This movement toward value-based pharmaceutical contracts is gaining (at least in discussions) in originator drug arenas. Biosimilar drug makers may have even more to gain, including early adoption, and less to lose.

Gaining rapid uptake for biosimilar products is a challenge for manufacturers and payers. 