2024 Formulary Moves

Biosimilars have the potential to reduce healthcare costs for biologic treatments. In the United States, uptake of biosimilars historically has been slow. But with new biosimilars on the market for the arthritis drug Humira (adalimumab) and additional new biosimilars expected to reach the market over the next few years, there is an expectation of increased price competition and lowered costs.

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Patient access, however, remains in the hands of pharmacy benefit manager (PBM) and payer formularies, which decide for which therapies they will reimburse. Biosimilars distributed through pharmacies achieve a 35% market share after two years compared with a 57% market share when physicians buy and bill for these medications, according to a 2023 report by the IQVIA Institute for Human Data Science.

Beginning this year, several large payers have shuffled their coverage of biosimilars, including the biosimilars to Humira, the blockbuster anti-inflammatory drug that generated U.S. sales of more than $18.6 billion in 2022 and has set sales records.Both Cigna and the PBM CVS Caremark have removed Amgen’s Amjevita (adalimumab-atto), the first Humira biosimilar to launch. When it came on the market in January 2023, Amjevita had two price points: 5% below Humira and 55% below Humira.

Cigna removed Amjevita in September 2023. The insurer instead prefers Humira and the biosimilar Cyltezo (adalimumab-adbm), the first FDA-approved interchangeable biosimilar, and Sandoz’s Hyrimoz-HC (adalimumab-adaz), a citrate-free, high-concentration (HC) formulation, as well as Sandoz’s unbranded adalimumab-adaz HC as alternatives. Hyrimoz-HC is available at a price that is 5% below that of Humira, and the unbranded version is available at a discount of 81%.

When Amjevita launched, CVS Caremark had indicated that it would place the biosimilar on a nonpreferred brand tier on its commercial template formularies. Beginning in January 2024, however, CVS Caremark will prefer Hyrimoz and the unbranded adalimumab-adaz. Humira remains on the PBM’s drug list as well.

CVS Caremark’s changes seem related to CVS Health’s August 2023 launch of Cordavis, which will work directly with pharmaceutical manufacturers to commercialize and/or coproduce biosimilar products and function like a CVS house brand for biosimilars. As its first product, Cordavis has contracted with Sandoz to commercialize and bring to market Hyrimoz in the first quarter of 2024 under a Cordavis private label. The list price of the Cordavis Hyrimoz will be more than 80% lower than the current list price of Humira.

As Antonio Ciaccia, president of 3 Axis Advisors, points out, the wholesale acquisition cost of CVS’ product is more than double the price that the Mark Cuban Cost Plus Drug Company was able to get for Yusimry (adalimumab-aqvh), another Humira biosimilar.

“My assumption is that CVS’ price is close to — or possibly even better than — Cuban’s when they factor in their concessions off the list price; however, they’re not being transparent about their pricing and are likely are going to use formulary status to direct patients to their more expensive product offering over cheaper products in the market,” Ciaccia says. “That’s the sad part about this system. Formularies are often used to direct patients to medicines that might actually be more expensive for them, in order to generate rebates that accrue to others.”

Drug industry expert Adam Fein wrote in a post on his Drug Channels website that CVS Health’s move into biosimilars could be a way to position itself for success in the 2025 Medicare Part D stand-alone prescription drug plans (PDP) market. “After implementation of the Inflation Reduction Act’s Part D redesign, high-list/high-rebate products will become less attractive to Part D plans. However, PDPs will not benefit from offsetting lower medical costs in the way that Medicare Advantage prescription drug plans will,” Fein wrote.

The movement of biosimilars on and off formularies is not surprising, says Allison Combs, head of product-payer clinical effectiveness at Wolters Kluwer: “Just like when generics first came on the market, the biosimilars have caused a reevaluation of the drugs that are already in use. Payers are trying to understand the evidence behind a new product, and then they have to weigh that against their population.” Combs indicates that payers first look at the clinical evidence of new therapies, followed by costs and rebates. “Clinically, biosimilars are not like generics, where patients can stop taking this pill and switch to a different pill,” she says. “These are complex therapies. A lot of times, patients have to taper off the first one before starting a new one.”

But Ciaccia says formulary changes are most driven by the financial incentives for PBMs. “Big picture, Humira and insulins are the biosimilars that really matter from an overall cost/utilization perspective for PBMs and health plans,” he says. “I would estimate that collectively, these products represented between 10% and 20% of all rebates during their peak.”

Biosimilar savings

Studies continue to show that biosimilars save payers substantial amounts of money. The IQVIA study found that absolute savings from biosimilars vary, with average sales price reductions of between $2,526 and $4,913.

In oncology, the use of biosimilars instead of reference products could lower total cost of care in value-based payment models, according to a study published in Advances in Therapy in November 2023. The analysis estimated the impact of biosimilar substitution in a six-month episode of care as defined in the Oncology Care Model. In this simulation, there was a $1,193 reduction in total cost of care per episode, which represented an average 2.4% reduction in total cost of care compared with the aggregate benchmark for the cohort.

Biosimilars could lower costs for the Medicare Part B program and for beneficiaries, according to a September 2023 analysis by the Office of Inspector General. This review found that spending could have decreased by $179 million, or 4%, if biosimilars had been used as frequently as the most used biosimilars. Additionally, the implementation of alternative payment policies, such as a least costly alternative policy, could have lowered Part B and enrollee spending by $419 million, even without an increase in biosimilar use. The biosimilars studied in this report include the ones for bevacizumab, epoetin alfa, filgrastim, infliximab, pegfilgrastim, rituximab and trastuzumab.

“Even when a brand product is offering rebates of 80% off the list price, there is still an opportunity for the generic/biosimilar to be cheaper, but that generally requires a good deal of pricing pressure,” Ciaccia said. “We are now seeing that level of competition for some biosimilars, and assuming the biosimilar manufacturers are following the historic generic playbook, then we’ve reached the level where some pricing competition is likely to make these formulary moves make sense.”

But Ciaccia said PBM pricing practices are potentially challenged with movement away from brands because it reduces administrative fee collections for managing rebates. “Finding the right biosimilar product to source is likely going to be key to enabling their ongoing pricing strategies; for example, even though Mark Cuban’s collaboration with Coherus (BioSciences) has yielded the lowest-priced biosimilar of Humira, it has extremely low utilization thus far, which speaks to some of the perverse incentives that are undermining more traditional market forces from taking root.”

Other biosimilar moves

There has also been formulary movement among the oncology biosimilars. For example, beginning in January 2024, CVS Caremark also will remove two biosimilars of Herceptin (trastuzumab), which is approved to treat HER2-positive breast and stomach cancer: Kanjinti (trastuzumab-anns) and Trazimera (trastuzumab-qyyp). CVS Caremark instead prefers Teva’s Herzuma (trastuzumab-pkrb) and Biocon Biologics’ Ogivri (trastuzumab-
dkst), both of which have been added to its formulary starting this year. All four are Herceptin biosimilars.

Cigna and CVS Caremark both excluded Sandoz’s Ziextenzo (pegfilgrastim-bmez), a biosimilar of Neulasta (pegfilgrastim), which is used to prevent infections after chemotherapy. Instead, Cigna prefers Neulasta, as well as the biosimilars Udenyca (pegfilgrastim-cbqv) and Nyvepria (pegfilgrastim-apgf) whereas CVS Caremark prefers Fylnetra (pegfilgrastim-pbbk) and Nyvepria.

Within the eye care segment, CVS Caremark has removed Eylea (aflibercept) and Lucentis (ranibizumab) from its formulary. Both treat ophthalmic conditions, including age-related macular degeneration, diabetic retinopathy, diabetic macular edema and macular edema following retinal vein occlusion. No biosimilars to Eylea have been approved by the FDA, but several are in the wings. In August 2023, Sandoz announced positive results from a phase 3 trial of its Eylea biosimilar.

CVS Caremark and Optum Rx both favor Cimerli (ranibizumab-eqrn), a biosimilar to Lucentis, and compounded bevacizumab over Lucentis to treat patients with macular degeneration, macular edema and diabetic retinopathy. The FDA approved Cimerli in August 2022 as a biosimilar product interchangeable with Lucentis. Developed by Coherus BioSciences, Cimerli is available in 0.3-mg and 0.5-mg dosages. CVS Caremark also added Byooviz (ranibizumab-nuna), another Lucentis biosimilar, to its formulary.

Denise Myshko is senior editor of Formulary Watch, a website affiliated with Managed Healthcare Executive.