Part 2: Kolodziej Discusses Biosimilar Support at NCCN Conference

Biosimilars face many barriers to uptake in the United States, but the federal government is working to change things, said Michael Kolodziej, MD, vice president and chief innovation officer at ADVI Health, who presented at the National Comprehensive Cancer Network’s 2020 Virtual Conference.

“The federal government is the largest purchaser of cancer care services in the world, and the Feds want biosimilars to be successful,” Kolodziej said. ADVI health is a business development service based in Washington, DC.

Kolodziej said that an executive order signed 2 years ago allowed Medicare Advantage programs to use step therapy for Part B drugs, including biosimilars, and encouraged commercial payers to do the same.

“The idea was that payers had a lot of experience using step therapy. And when there’s a legitimate rationale for therapeutic equivalence and an opportunity to use market forces to reduce prices of drugs, Medicare Advantage plans will do it,” Kolodziej said.

However, step therapy requirements are often accomplished through the use of prior authorization.

Still, Kolodziej said it became “absolutely crystal clear how biosimilars fit into a step therapy strategy.” Supportive care drugs and anti-inflammatory drugs were the first to be included.

Kolodziej said that 75% of commercial health plans now use step therapy in some form and several health plans implemented it immediately after it was allowed in Medicare Advantage plans.

The Trouble With Rebates

Another uptake barrier the administration attempted to fix was the rebate system. Rebates prevent biosimilars from gaining market share and protect the interests of reference drug manufacturers by undercutting the sticker price discounts of biosimilars, Kolodziej said.

Kolodziej mentioned that Medicare’s inability to negotiate drug prices further undercuts the potential savings from biosimilars.

“It's fair to say that the commercial health plans only care about the net cost of the drug, which means that whatever the sticker price is, which is what Medicare pays, doesn’t matter much to them if they can get a better deal,” said Kolodziej.

In 2018, the Trump administration proposed getting rid of rebates applied a the point of sale, meaning that better deals generated by rebates would go to the patient instead of health plan providers. The draft rule was “shot down” over concerns that removing rebates would make the net cost of drugs go up, Kolodziej said, adding there are congressional champions still fighting to resolve the problem.

“Don't give up on it yet. We have seen commercial payers continue to play this rebate game. We’ve seen it in the supportive care space in oncology, where if you have commercial health insurance, you might prefer the reference product. But give it some time. This is just too politically sensitive to go away,” said Kolodziej.

The International Pricing Index and CAP Program

Establishment of an international pricing index was proposed by the current administration to set certain drug prices in the United States based on international benchmarks. The policy also included a second component: the Competitive Acquisition Program (CAP).

CAP would replace buy-and-bill drug purchasing by physicians with a system under which the payer purchases the drug and provides it to the physician for administration, a process known as “white bagging.” It transfers control over drug purchases from physician to the payer.

“The mechanism only works, it only becomes lucrative for the health plan and good for the government, if they can select certain drugs and negotiate around those drugs. If you can’t do that, the CAP program really doesn’t generate any significant savings,” Kolodziej said.

Kolodziej doesn’t believe that CAP would be beneficial for cancer care. “In fact, it would be a catastrophy,” he said. “But CAP really is designed to manage formulary, and if you want to manage formulary, you use biosimilars.”

Potential Price Cuts

Kolodziej said that those who argue that lower prices won’t be enough to drive market uptake for biosimilars are wrong, citing the response to generic drugs as a key reason why.

“It turns out that generic drugs certainly come in at a discount, but it takes a while to get to that discount. [Data] show that until you get a fourth or fifth generic competitor, the price doesn't really go down,” he said.

Recently, therapeutic biosimilars have started to launch on the market at a 25% discount, which Kolodziej sees as promising for patient and physician acceptance despite 30% of oncologists reporting that they are skeptical about using biosimilars. “Twenty-five percent of a big number is a big number, and health plans have noticed,” he said.

“We're at a very interesting point in this story, because I would say that it's clear that supportive care biosimilars have really made their way into a common usage,” said Kolodziej.

More from the NCCN 2020 Virtual Conference can be found here, including Part 1 of Kolodziej's talk.