More Employers Expected to Turn to Biosimilars as Drug Costs Continue to Rise

A recent survey of employers regarding their concerns about growing healthcare costs reveals that some are looking to biosimilars as one method of controlling specialty drug spending.

The survey, conducted by Willis Towers Watson, was released earlier this month. It finds that curbing the cost of healthcare and improving its affordability remain the top priorities for almost all employers over the next 3 years. Two in 3 (63%) employers see affordability as the most difficult challenge to tackle; they expect healthcare cost increases of 4.9% in 2020 compared with 4.0% in 2019.

Pharmaceutical spending continues to drive those concerns, mainly stemming from the increased cost and continued inflation of specialty pharmaceuticals. More employers are turning to comprehensive solutions, with about half evaluating and managing specialty pharmacy spending not only through the pharmacy benefit, but also through the medical benefit; such strategies are expected to grow from 49% currently to 85% by 2020.

One way to use the medical benefit, the report says, is to offset specialty pharmaceutical costs by influencing the site of care; the number of employers that say they plan to implement coverage changes to influence location for specialty drugs administered through the medical benefit over the next few years is more than doubling (from 21% currently to 55% by 2021).

In addition, more employers are intrigued by the idea of biosimilars offering a lower-cost option; 30% of employers have ensured they have appropriate formulary strategies to leverage biosimilars when available, with another 39% planning to take a more active approach in the next 2 years.

Biosimilars were included last week in H.R. 3, The Lower Drug Costs Now Act, as a bipartisan amendment intended to boost uptake of biosimilars tucked inside.

Two other approaches that employers are planning to use to in order to cope with rising costs are ramping up value-based design and looking at ways to enhance employee wellbeing, the survey finds.

Some employers are using new strategies that could help improve access to care beyond the approaches of high-performance networks (growing from 16% to 52% adoption by 2021) and the use of centers of excellence within the health plans (growing from 45% to 74% by 2021).

Despite the increase in costs, 95% of employers are very confident their organization will continue to sponsor healthcare benefits to active employees in 5 years; in addition, their longer-term commitment to sponsoring these benefits 10 years from now hit 74%, the highest level in the past decade.

Nearly 90% of employers believe rising healthcare costs are a significant source of financial stress for their employees. Some employers are actually seeking to measure stress; the number of employers that are measuring the stress level of their employees is on track to triple by 2021, from 16% to 53%.

In addition, most employers are redesigning their employee assistance programs to better address emotional and financial wellbeing (expected to rise from 33% to 74% in 3 years) and building an organization-wide behavioral health action plan (leaping from 25% to 68% in 3 years).

"Relentless health care price increases continue to crowd out other benefits, making affordability a challenge for many workers," said Julie Stone, managing director of Willis Towers Watson's specialty practices within its health and benefits business, in a statement. "In a full-employment economy, employers feel the pressure to offer competitive benefits and can't compromise on employee affordability. With employers and employees seeing no end in sight, many companies are getting creative and tapping into overlooked strategies to shrink the total bill."