Retailers and PBMs Laud Generic/Biosimilar Savings

Two of the nation’s largest pharmacy retail chains, along with the largest PBM, Express Scripts, rely on generic drugs to control overall health-care costs.

CVS, Walgreens, and Express Scripts are also putting their support behind biosimilar drugs, but to a lesser extent, since there are still only a handful of approved biosimilars on the market.

“When patients have access to a generic medication at a lower cost, it helps increase access. Patients have realized savings on the cash price as well as on their insurance copays from recent generic launches of Crestor, Benicar and Benicar HCT, Seroquel XR, and Tamiflu,” Scott Goldberg, Senior Manager of Media Relations for Walgreens, told Drug Topics.

The launch of rosuvastatin, the generic version of Crestor, was one of the most important approvals last year, according to CVS Caremark.

And, while there were fewer generic launches in 2016 than in 2015, CVS Caremark’s generic dispensing rate rose by 1.4 percentage points to 85%. Most payers recognize the value of generics, and many have taken a more aggressive approach in promoting their use, according to an article on CVS Caremark’s website.  

“Our track record shows that encouraging [generic drug] use is containing spending growth,” CVS Caremark reported. Conversely, there was an 8.6% increase in brand drug inflation across the PBM.

Likewise, 85.4% of prescriptions filled among commercially insured Americans in 2016 were for a generic, according to Express Script’s “2016 Drug Trend Report.”

In addition, the price of generic drugs continues to fall. Generic prices dropped 8.7% for Express Scripts’ clients in 2016; between 2008 and 2016, generic deflation was a significant 73.7%, the report stated.

Generic Drug Challenges

Despite generic drugs’ contribution to lower overall health-care costs, pharmacy chains and PBMs still want faster drug approvals.

“At the start of 2017, more than 4,000 generic drugs were pending approval at the FDA. In comparison to the European Union, the United States has much catching up to do: Europe approves drugs more quickly and has 20 biosimilars on the market compared to our four,” CVS Caremark said on its web site. “As the health-care landscape continues to evolve, increasing the flow of generics and biosimilars is an important step to unlock the cost-savings potential for patients, taxpayers and the health system as a whole.”

“Pharmacists are well-positioned to partner with providers and health plans to ensure patients maximize their health-care savings potential. Improving the timeline for generic drug approvals would also bring savings to the market faster for customers,” Goldberg agreed.

Up next: How biosimilars can lower costs

How Biosimilars Can Lower Costs

Biosimilars can save the U.S. health-care industry an estimated $250 billion from 2014 through 2024 on 11 biosimilars (some of which are not yet approved) according to Express Scripts.

The first two biosimilar versions of infliximab (Remsima) and filgrastim (Zarxio) alone are expected to save patients and payers nearly $22.7 billion between 2014 and 2024, according to Express Scripts research.

“Biosimilars will do for the biotech market, primarily made up of very expensive injectable drugs, what generic drugs did for traditional oral solid pills a decade ago: lower the cost for safe, effective treatments that improve and save lives,” Express Scripts wrote in a 2014 report on biosimilars, which has not been updated. Biosimilars have been safely used in the European Union, Japan, and other countries for years, Express Scripts said, with prices 30% lower than their brand-name counterparts.

The launch of more biosimilars in the future is expected to aid overall prescription drug spending, particularly on specialty drugs. “Specialty pharmaceuticals account for roughly 36% of spend for our PBM clients, increasing competition with biosimilars could help bring down prices for these expensive products,” CVS Caremark said.

For example, a biosimilar for Humira (adalimumab), used to treat rheumatoid arthritis and other inflammatory diseases, was approved in 2016, and more biosimilars for adalimumab are in the pipeline. “However, Humira has multiple patents and it’s expected that patent litigation will delay the launch of any competitive products in 2017,” CVS Caremark said.

Ray Tancredi, RPh

The RAND Corporation estimates that the entry of biosimilar products into specialty markets could reduce spending on biologics by an estimated $44.2 billion over the next decade, CVS Caremark said in its report.

“Choice is always good. It gives the physician, the patient, and the health plan the benefit of choosing a drug that’s right for the patient,” said Ray Tancredi, RPh, Divisional Vice President for Specialty Pharmacy Development for Walgreens.

Hurdles to Biosimilars Uptake

Biosimilars do not have interchangeability-the main factor that differentiates them from generics-which is the primary hurdle facing adoption of these drugs by physicians and patients. ”While there have been five biosimilar products approved by the FDA, none of the approved products are interchangeable with the innovator, meaning that the prescription must be written for the biosimilar in order for the biosimilar to be dispensed,” Tancredi said.

In addition, while the discount for biosimilars is estimated to be between 15% and 35%, there is no consensus on the actual cost savings to the health-care system, according to Anastasia Ipatova, PharmD, a PGY1 Pharmacy Practice Resident with Walgreens Specialty Pharmacy and Duquesne University Mylan School of Pharmacy, writing in Walgreens’ “Clinical Update” on biosimilars.

“There is uncertainty about what cost benefit will come from these medications, and insurers must consider the possibility and effect of forfeiture of rebates with branded biologic manufacturers,” Ipatova wrote.

“With biosimilars being relatively new to the market, this [cost savings] remains to be seen,” Tancredi agreed.
Physicians also lack confidence in biosimilar education and question the clinical value of biosimilars because of limited access to clinical trial data. This might negatively affect prescribing patterns and limit patient access to increased therapy options,” Ipatova wrote.

Physicians must also address concerns regarding billing and ease of reimbursement. “There is uncertainty regarding coverage for extrapolated indications, and questions arise about accurate use when products are not approved for all the indications that the reference product holds,” Ipatova wrote. “Adequate education on the risks and benefits of biosimilars and how they compare to current therapies is critical to positively influencing a patient’s willingness to switch.”

In addition, patent disputes between reference product manufacturers and biosimilar applicants have been “significantly delaying medication launches, despite speedier approval,” Ipatova wrote.