3 Reasons US Payers Will Make 2021 a Banner Year for Biosimilars

We recently aggregated the insights of P&T participants from 20 national and regional US payers. The study aimed to assess the attitudes and intentions of payer stakeholders responsible for bending the notoriously stubborn pharmacy cost curve. While we are putting the finishing touches on our research, the data is clear: biosimilar adoption has finally achieved escape velocity.

According to the recent Amgen Biosimilars Trends Report, biosimilars have finally begun to flourish in the US, citing an incredible 143% increase in launched biosimilars in just the last year. The count of US biosimilars launched in the US now stands at 18 in just three drug classes: TNFs, Oncology and Supportive Care. The manufacturers of these 18 biosimilars are seeking to replace seven innovator “branded” drugs, making their billions of dollars in annual sales vulnerable. These potential losses, of course, also reflect potential savings to others, summoning the full attention and resources of payers.

Here are three reasons payers will drive further biosimilar adoption in 2021:

1. US payers have made biosimilar adoption one of their highest priorities

Nearly all the payers we interviewed consider biosimilar adoption to be one of their top three priorities, and the majority have already committed to specific biosimilar market share goals. While initial savings aspirations dampened early, an increasingly crowded biosimilars market is creating more compelling contract offers and, ultimately, lower average sales prices (ASPs). Add to this the novel opportunity to manage their oncology spend in a meaningful way, and the race for biosimilar adoption is on.

Our research shows payers aggressively shopping for discounts in ways not seen in years, a clear sign of their determination. Direct manufacturer contracts are on the rise, and they often include incentives designed to drive utilization and market share. Our research also shows it is common for individual payers to create separate biosimilar rebate streams from multiple Medical Benefit Managers (MBMs) and manufacturers, a stark contrast to the traditional pharmacy benefit model.

2. Payers are increasingly confident of their success

The payers we interviewed are demonstrating confidence in the effectiveness of their biosimilar pull-through plans, much more so than even just a year ago. “The biosimilar market is beginning to thrive” was the sentiment of one panelist, another touted her plan’s 90% biosimilar market share, and still another cited the unexpected receptivity of oncologists as a key to their success.

More specifically, payers expect to employ increasingly aggressive utilization management in the next two years, including many who plan to join early movers and remove originators from their medical policies in order to block their use.

While some payers remain in wait-and-see mode—and our research does show this too—they are increasingly uncommon. The aggregated responses demonstrate neither manufacturers nor payers should cite this minority as a reason for inaction.

Overall, payers recognize they are still honing their skills mid-match, but they feel they have achieved the trajectory needed for long-term success.

3. Payers are determined to enhance their capabilities

Our panel ranked specific sources of drag in the healthcare system and indicated they are continually refining strategies designed to accelerate biosimilar adoption across all stakeholders. Their growing confidence did not come easy, and they seem to keenly appreciate that the momentum they now enjoy was hard-earned through persistence, ingenuity, and some agile learning along the way.​

Payers are also learning from what they portray to be an aggressive contracting environment as originators seek to establish rebate protections and biosimilar manufacturers navigate, and respond to, a maelstrom of ever-changing, highly competitive offers.

Payer challenges and missteps to date appear to have opened their minds to novel ideas and their dance cards to unlikely partners. The opportunities for manufacturers and MBMs to further shape their newfound wisdom are plentiful.

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To be clear, biosimilars are most definitely in play in the US. The race is on and there will be winners and losers. Some payers have seized the initiative and will be rewarded with early savings; others will benefit from the added certainty afforded by a path well worn.

As for the manufacturers, their path is a gauntlet of ice patches and banana peels. Manufacturers of both the originators and the biosimilars face significant risks from the emergence of multiple biosimilar options within key categories.

The next chapter of this biosimilar story will be shared by those who are able to monitor these dynamic market trends most closely and then develop the winning strategies that will transport payers to their biosimilar endgame.

John Fox, MBA, PhD is the Chief Solutions Officer at Formulary Insights. He has over 20 years of experience helping businesses gather and leverage market insights. He can be reached by email at john@formularyinsights.com