The Power of PBMs and Biosimilars, 2025 Launches of the Stelara Biosimilars, the IRA and Interchangeability | Q&A with Craig Burton, MBA

Craig Burton, MBA

As part of Managed Healthcare Executive’s coverage of biosimilars and managed care in 2025, we will be reaching out to leaders in the biosimilar industry and in managed care about biosimilars, their pricing and marketing dynamics and how government rules and regulations will affect the biosimilar market. We will also be interviewing outside experts and analysts. Managing Editor Peter Wehrwein spoke recently with Craig Burton, MBA, executive director of the Biosimilars Council and senior vice president of policy and strategic alliances for the Association for Accessible Medicines. The Biosimilars Council is part of the association, a trade association of generic and biosimilar distributors and manufacturers.

Second of two parts. This transcript has been edited for clarity and length.

Editor's note: The first part of our interview with Burton ended with him talking about the pharmacy benefit managers (PBMs) and a greater number of patients taking Humira switching to Skyrizi (risankizumab) and Rinvoq (upadacitinib) than to Humira biosimilars.

That doesn't seem to bode well for biosimilars, and it sort of speaks to the power of the PBMs on the pharmacy benefit side, right?

Absolutely. The flip side of that, the bright light, of, for instance, the Cordavis* experience with adalimumab [Humira biosimilars], is that it shows the power of the PBM once they decide that it's in their interest to convert patients [to biosimilars] they can do it really quickly. They converted 80% of their patients virtually over overnight. But the PBMs have the power in that equation. No doubt.

What is the motivation behind the creation of these house brands and these exclusive arrangements, like Optum’s Nuvaila has to be the sole source of Amgen’s Stelara (ustekinumab) biosimilar, Wezlana (ustekinumab-auub)?

I think for the manufacturer, the motivation is real simple. It's looking for a way to get some traction.

For the PBM, well, I don't represent them, so I don't want to speak for them. But I think it's, how do you harness this in a way to drive value. They would tell you they're trying to drive value to their customers, to employers and plan sponsors [with a lower-cost product].

Are they getting some big rebate on that we don't see?

They absolutely are. There is absolutely on top of the lower cost. They are absolutely receiving a share of every script, and we don't see what that is.

The big question, is that sustainable in the long run?I don't think the answer is clear.

I would say the core issue is the power of the PBM. The private label is simply the contracting mechanism du jour. We've seen rebates, we've seen fees. Now we're seeing private label.

There will be another contracting model. The core issue, the common thread, is the power and the leverage that the PBM has.

These private label moves by PBMs, are they a bad development, a worry? For the manufacturer of a particular biosimilar they would seem to create a huge market with the stroke of a pen.

I think what I would say is that the degree of power that the PBM has over patient access is a concern. Whether that's manifested in rebate deals, in fees, in private labels, that power, the unchecked power of the PBMs is absolutely concerning.

What do you think the big biosimilar story is going to be in 2025?

I'd point to one of two directions. First of all, I think there is an opportunity to get some positive policy done this year, whether that is some reforms to the PBM model, or whether that is getting rid of the distinction between biosimilars and interchangeables. There is increasing bipartisan agreement that that distinction is a difference without meaning and serves only as an opportunity for reference product misinformation.

What we're seeing with biosimilars is that there are a number of areas where you need to update the policy and coverage and regulatory system to achieve the goals you're trying to [accomplish].

The other thing that I am going to be watching this year is a couple of biosimilar launches this year, most notably the Stelara biosimilar launch.

It's a unique product. There's a lot going on there. But one of the interesting things going on is that — on top of everything else — this is the first product where those biosimilars are going to have to grapple with the implications of the IRA [Inflation Reduction Act] price controls that will apply to Stelara next year in the Medicare program. How that affects the launch strategies is going to be interesting.

Under the IRA, they've set up this model where any of the Stelara biosimilars that launch between January and June of this year, come next year, in Medicare, the best coverage that they can get is to be alongside the brand-name Stelara. Maybe they'd be able to be preferred, but Stelara is guaranteed formulary coverage in Medicare with the MFP [maximum fair price] next year, no matter how much lower priced those biosimilars are.

If one of those biosimilars were to delay its launch until, say, July of this year, that biosimilar could theoretically be covered instead of Stelara.

So you're actually creating this nonsensical system where you, as a biosimilar maker, might be better off delaying your launch, depending on your coverage strategy.

So all of these Stelara launches may occur in the second half of the year?

They may. But even if they don't, you're setting up this scenario where someone who launches later might have a better shot at coverage next year than one of these earlier entrants.

Getting back to interchangeability, I think what you're suggesting is that we should get rid of that distinction altogether. If you're approved as a biosimilar, you are interchangeable. Can that happen just through FDA rules ordoes it require legislation?

There’s a lot that FDA can do there, but at the end of the day, it would be cleanest for everyone if Congress were to pass legislation on that. There was legislation introduced last year. We expect it to be reintroduced this year, and we think it could garner bipartisan support. FDA recommended in their budget proposal last year that Congress pass legislation deeming biosimilars to be interchangeable.

Whenever one writes about interchangeability, one always has to add the proviso that state pharmacy laws apply. Is that a real issue? If Congress were to pass interchangeability legislation, would there still be state pharmacy laws that could interfere with interchangeability?

Most of the states — I forget the exact number at this point; it might be all of them — have updated their pharmacy practice laws to provide for switching interchangeable biosimilars. So we don't see the state pharmacy laws as a barrier here.

Most of these products are going to be dispensed via specialty pharmacy. Having them be interchangeable just makes it a lot easier.

We've seen a lot of examples of misinformation out there. “Well, these biosimilars, they're not interchangeable. You can't trust them,” that kind of nonsense. And so the deeming [of biosimilar as being interchangeable] helps solve that.

What might come out of Washington, D.C., in ’25 that affects the biosimilar industry? It seems like you would maybe list interchangeability legislation as the number one.

I think there's an opportunity for FDA to continue its work on streamlining [of requirements for biosimilars to be approved]. I think there's an opportunity for Congress to pass interchangeability legislation. I think there's an opportunity for reforms, especially in the Medicare program, to PBM and plan coverage in the pharmacy benefit of generics and biosimilar.

I think the issues around the IRA, the uncertainty caused by the IRA, and the challenges of ASP [average sale price] price deflation, are real. I expect to work on them, but those are those are more difficult issues to solve this year.

*Cordavis is a subsidiary of CVS Health that contracts with biosimilar manufacturers to market and coproduce biosimilars.