Press Release

Biosimilars Key to Lowering Drug Prices; National Alliance of Healthcare Purchaser Coalitions Releases Playbook to Help Employers Adopt

Issued by National Alliance of Healthcare Purchaser Coalitions

Mar. 7, 2023

WASHINGTON – The broader acceptance and use of biosimilars – lower-cost versions of patented and branded drugs – by employers and other healthcare purchasers are key to preserving economic competition in the marketplace. To support plan sponsors in adopting biosimilars into their health and pharmacy benefit plans, the National Alliance of Healthcare Purchaser Coalitions (National Alliance) developed and released an employer playbook.

“If properly managed, biosimilars can help employers save millions while increasing patient access,” said Margaret Rehayem, vice president at National Alliance. “As the use of these drugs continues to expand in the US, we’ve been working with coalitions and employers to develop strategies to help drive acceptance and appropriately push back on health plans and pharmacy benefit managers that are not transparent or have misaligned incentives.”

The Employer Playbook on Biosimilars was developed to help employers navigate the challenges of managing these drugs in their benefit plans and structure their pharmacy benefit programs to best address misaligned incentives and/or anti-competitive business practices. The resource provides practical strategies to help purchasers understand innovative and emerging treatments and support discussions with plans and other vendor partners for plan and formulary design, drug pricing and rebates, drug access and accessibility, and site of care and drug administration.

“We are late in prioritizing biosimilar management,” said Cathy Trinh, MS, senior healthcare analyst, SEIU 775 Benefits Group, and a participant in the biosimilars learning collaboratives. “It’s shocking to learn how much we could have saved in the last few years if biosimilars were used instead of the reference products.”

Competition is key to biosimilar success The resource is also meant to create an awareness of several deceptive tactics being used to slow the adoption of biosimilars that can have devastating repercussions to the longevity of biosimilars and reduce anticipated cost savings for both patients and employers. In the absence of competition, drug prices will continue to increase, even without patent protection. 

Recommended drug management strategies for employers include:  

• Request broker or pharmacy consultant provide an update on drug pipelines and launches to determine if market releases will impact prescriptions and prices 
• Consider adopting a custom formulary design or use a phased in approach, one that is not rebate-driven
• Add biosimilars on formulary once they are launched; require all new biosimilar releases be placed in the generic tier to increase adoption
• Request pharmacy benefit managers (PBMs) share formulary strategy to support overall workforce needs (especially those with limited access or equity challenges) 
• Do not be lured into 340B pricing plans; ensure the lowest net cost – without rebates – or consider a phased approach
• When multiple biosimilars are available, offer incentives for the use of all biosimilars in the same drug class over the reference product
• Carve out specialty drugs and/or biosimilars with a specialty PBM or pharmacy if that option provides better outcomes

Sustaining affordability Employers have been misled to believe biosimilar adoption will lead to branded product losses in rebates and cause biosimilar cost to increase. However, as patent protections expire for drugs like the rheumatoid arthritis injectable Humira after 20 years and $200 billion in revenue, employers need to push for credits, incentives, discounts and/or rebates from biosimilar companies to be passed on to the employer or the patient. 

“Companies are spending more on employees’ health insurance than ever before, and biosimilars are safe and effective treatment options to lower the cost of prescription drugs if they are accessible to the patients that need them,” said Juliana M. Reed, executive director of the Biosimilars Forum. “We urge employers to implement recommendations from this playbook and work with their PBMs to ensure their employees have access to lower cost biosimilars and are educated about them.”

The National Alliance project brought together three member coalitions (Economic Alliance for Michigan, Florida Alliance for Healthcare Value and Washington Health Alliance) and eight employers of different sizes and industries to participate in the eight-month initiative. Funding for this project was provided by the Biosimilars Forum, a nonprofit organization working to advance biosimilars in the United States with the goals of expanding access and availability to improve healthcare outcomes.

About National Alliance of Healthcare Purchaser Coalitions For over 30 years, the National Alliance of Healthcare Purchaser Coalitions (National Alliance) has united business healthcare coalitions and their employer/purchaser members to achieve high-value care that improves patient experience, health equity, and outcomes. Its members represent private and public sector, nonprofit, and Taft-Hartley organizations that provide health benefits for more than 45 million Americans and spend over $400 billion on healthcare. To learn more, visit nationalalliancehealth.org and connect with us on Twitter and LinkedIn.

Editor's note: This press release has been issued by the company named above, not BenefitsLink. Reliance on information in this press release might be prudent only after an independent review of its accuracy, completeness, efficacy, and timeliness. Reference to any specific commercial product, process, or service by trade name, trademark, service mark, manufacturer, or otherwise does not constitute or imply endorsement, recommendation, or favoring by BenefitsLink.