Jennifer Snow on Most-Favored Nation and Other Pricing Reforms

CfB: Hello, I'm Matthew Gavidia. Today on MJH Life Sciences Medical World News, The Center for Biosimilars® is pleased to welcome Jennifer Snow, vice president of Reimbursement and Policy Insights at Xcenda, part of AmerisourceBergen. Great to have you on Jennifer. Can you introduce yourself and tell us a little bit about your work?

Snow: Pleasure to be here today. So, my name is Jennifer Snow and I’m vice president of Reimbursement Policy Insights at Xcenda. I lead a team of about 25 patient-support, patient-access champions, and we sit within the larger commercial group at Xcenda. I think there's over 100 of us in the commercial consulting area. And we do everything from patient support programs, assistance, in terms of exposure modeling, and benchmarking, as well as policy work, coding, compendia, and reimbursement strategies—really the full gamut of working in addition to just your market access strategies.

To start us off, what do you see happening if the Affordable Care Act is struck down, especially with regard to the biosimilars approval pathway?

It is a tricky time right now, for a lot of different policies, given the Affordable Care Act and Supreme Court oral argument that we heard earlier in November. You know, when it comes to biosimilars, I'm not very worried, which is great, because there's enough things to worry about in 2020. And when it comes to biosimilars, yes, it is possible that it could be a little rocky for the biosimilars approval pathway, which is part of the Affordable Care Act. And one of the things that's in front of the Supreme Court right now is the question of whether it is severable? Is the whole law going away, or can they just separate parts of it that they disagree with? And so even if they somehow strike down the whole Affordable Care Act, which doesn't seem likely, given the way the arguments went, every interpretation is that it's a bipartisan agreement. Biosimilars are here to stay and the train has left the station. We have 28 approved biosimilars in the United States—18 that are on the market—and it would be pretty hard to stop it now. And, if the Affordable Care Act were to go away, I think we would have much larger problems than just for biosimilars.

Can you tell us about HR 8190 and what it means for the availability of affordable insulin?

Yes, 8190 is a bill that was introduced last summer in the House of Representatives. If passed, it would allow for biosimilar insulins to automatically be granted interchangeability designations. And you know what that means, simply put, is that right now, there’s no interchangeability. But this would enable pharmacists to substitute prescriptions, and switch patients to a biosimilar if their physician writes a prescription for the reference insulin, and assuming the biosimilar insulins are cheaper than the reference insulin, and we do expect them to be cheaper, patients would see immediate savings. And another benefit of this interchangeable designation is it would incentivize manufacturers to develop biosimilar insulin because they can be easily switched—leading to more competition and likely lower costs. And interchangeability could limit the investment in expense and time needed to introduce competition.

What do you think are its chances for passage?

When it comes to Congress, anything is possible. And, you know, I think that it's a clear benefit to patients with diabetes and should be able to generate bipartisan support. And the good news is it was introduced by Republican Grothman, a Republican from Wisconsin who did win reelection in November, so it still has its champion. That being said, Congress has many priorities, and I think this would need a larger bill—something else to kind of hitch a ride on to in order to get passed. But I think it does influence clearly a hot button issue and an area that a lot of patients would like to have some relief from, and so its chances are not necessarily good on its own. But the concept is one that I would expect to move forward soon.

Should this be accomplished by legislation? Or do you think the FDA ought to act to loosen interchangeability requirements?

We are waiting for the FDA to release guidance, potentially sometime next year, on the interchangeability requirements for insulins, but no one is sure what those requirements will be. Enacting this HR 8190 would secure the interchangeable status of biosimilar insulins and make it much more difficult to reverse the status in case the FDA doesn't move forward. Or, if they move forward and change their minds [on interchangeability, this bill would cement it anyway].

What can you tell us about insulin products that are under development and potentially approved as interchangeable?

Currently, there are no approved biosimilar insulins on the market. And we know that manufacturers are waiting for this guidance from the FDA to finalize their steps and move forward. And it's sort of a chicken and egg situation. You're waiting for something to happen before more happens, but I think that's where we're at right now.

And shifting to more health care policy questions, President Trump has sought to combat the high cost of prescription drugs, particularly biologics. How do you feel about international reference pricing, also known as “Most-Favored Nation”? And can you describe how this would work?

Well, I have very strong feelings about international reference drug pricing, the Most-Favored Nation, interim final rule that came out. I think it is important to recognize that the Most-Favored Nation Drug Pricing Rule that was released in mid-November really is about reimbursement and not pricing. And it is not the international price index that was released about 2 years ago; it's really about the lowest price on the market. And all of it starts less than 6 weeks from the day that HHS released the interim final rule.

They plan to completely upend the way that physicians are reimbursed for about 50 Medicare Part B drugs and biologics with high spending. The model is mandatory for physicians. It'll last 7 years, and all of it, you know, again in just a few weeks’ time, and I think that while this is really a huge change, I'm worried about it, and I don't like it. And I'm trying to figure out ways to make the best of this. I think it's important to note that there are going to be huge legal challenges in the next few weeks. We think that one of the main challenges that the interim final rule has is that the comment period is actually concluded after the rule has been implemented. So, if it's starting January 1, but the comment period was longer, how are you really implementing those comments? And so it was sort of, in some ways passed to fail. And we'll see what happens.

But just a little bit more about it, it's intended to lower the cost of select Part B drugs by mandating that the CMS pays no more than similar countries. And the model right now is set to be phased into full effect over 4 years. So, the first year will certainly not be as painful as it will be over time. And it's designed to test if removing incentives for high cost drug use in the United States will reduce both CMS and patient out-of-pocket spending without affecting the quality of care. Now, again, it starts with the 50 drugs; that cuts to the highest percentage of Part B expenditures, and more drugs will be looked at year over year. And what happens is, basically, you pay the lowest price available in those countries and it's looked at quarterly. CMS will look and say, “Well, this is the lowest price.” And you know, reimbursement for physicians for these drugs will no longer be based on average sales price plus 4.3%; instead, there's this new kind of Most-Favored Nation pricing, again phased in over 4 years, the model will allocate 25% of the reimbursement rate from average sales price to this Most-Favored Nation, and then it kind of phases in over time. Again, price can vary from quarter to quarter, and biologics are in there. And biosimilars are in there. And it's quite an achievement to get it out this quickly in terms of timing, but I think that it's an uphill battle for this particular piece of regulation.

How about importing high cost drugs from Canada? Is this really viable? And what about the risks of counterfeit drugs entering our health care system?

I think simple numbers tell the story when it comes to importation from Canada. Canada has 37.5 million people. The population of California is about 40 million. So, importing from Canda is not going to help the United States in the long run. I think it's a nice story to tell. I think that it is, you know, a nice political gimmick, but it's not going to be the answer to looking at drug pricing and reimbursement in this country.

What do you think is going to happen to these initiatives with the change in administration coming in?

If I can get a little geeky for a second, if Most-Favored Nation have been released as a notice of proposed rulemaking, I think that maybe President-Elect Biden could have done more with it, and made it and shaped it, and kind of done something to make it more tenable to himself and his constituents, as well as make it maybe more workable; but the way the Trump administration kind of rushed it through as an interim final rule, I think the legal challenges will stop it, slow it down, and ultimately, allow President-Elect Biden to stall it, get rid of it, and move it out. Which is, you know, somewhat unfortunate for him in that I think both him and President Trump have a similar kind of drug pricing mindset. So, there may have been more that the president-elect would have liked to have done with it. But for right now, I think it's just it's shelved. And for right now, President-Elect Joe Biden would have much more difficult things to worry about, probably than drug pricing, at least on day one.

And delving more into the transition to the Biden administration, what can you see in President-Elect Joe Biden's health care agenda that might improve biosimilar access and biologics affordability?

President-Elect Biden does certainly have a strong interest in making sure that drug pricing and drug utilization are efficient. And I think we've seen a lot of those trends over the last few years. And I think we're going to continue to see that pushing for the most efficient way of making sure that patient access is maintained. So, when it comes to CMS reimbursement or the FDA and interchangeability, none of those things, I think, will change. I think we're continuing on the path that we're on, which overall is a great thing.

Do you have any other thoughts on the Biden health care plan?

You know, the Biden administration has a lot of challenges. And I think the priority, of course, will be addressing the pandemic, I think we'll be looking at what happens with the Affordable Care Act, and, you know, coverage through the exchanges—whether he'll get a push from the left, more toward broader health coverage. All of these things, I think, in a lot of ways, are a larger challenge than drug pricing. Drug pricing, in and of itself, is a very newsworthy topic, but I think patient access is more important. And that's not necessarily tied to how much we spend on drugs. And I think that is a huge problem when it comes to Most-Favored Nation. And I think the focus on drug spending is inappropriate. I think, for the most part, you know, drug spending has gone up, and it should go up. We've gotten some fantastic innovation over the last 15 years. And we should be applauding that, and not necessarily saying, “Well, we're spending too much.” Maybe we're not spending enough. And I know as a consultant that that probably comes across as naive. But you know, we have fantastic innovation. We have people living longer. We have people being treated for things that we didn't have treatments for. And all of these are wonderful things; we have to make sure that as we look to solve problems, we're not creating new ones.

So, what do you perceive as some upcoming challenges to biosimilars in the coming year?

You know, the interchangeability issue, I think, is really important. And as we are waiting also for what's going to happen with the Supreme Court, there's certainly a lot of challenges. Also, when it comes to potentially Medicare Part D redesign, we're starting to move biosimilars into the Medicare Part D marketplace, which is really exciting, to finally be able to start talking about them in that context. We have a lot of manufacturers coming to us at Xcenda looking at how-to-do value propositions or how-to-do exposure models, or what does patient support look like? You know, what does market access look like? Can you help us with market strategies? We're also looking at coverage encoding for biosimilars. And all of these things are super challenging, and the next year is not going to diminish those challenges, particularly as the market gets much more competitive. As it moves to Medicare Part D, and you know, we've worked on every single commercialization for every single biosimilar in the marketplace so far. We're well-established and well-equipped to answer those questions, which is good because we've been busy doing so.

And concluding on a payer policy note, there's a lot of talk about rebates and how these and formulary decisions are harming provider choice on biosimilars and driving up costs. Do you see any movement here?

I don't think that rebates are necessarily the issue that is hurting patient provider choices to me; I think provider choice is really being harmed by step edits, by patient out-of-pocket spending, and yes, in part, those are rebate driven, you know, tools. But the rebate itself is not the problem, I think it's the payer response to the rebate that that worries me. Patient access, hindered by step therapy, hindered by out-of-pocket cost—that is really driving a wedge in that patient-provider relationship, which is so important. We've seen time and time again, particularly during this pandemic, how important it is and how much people do miss being able to go in and talk to their providers, and telehealth has been a great tool during this time. But I think you know, a lot of us are missing that one-to-one relationship. So ultimately, patient access being hindered by step therapy, and, you know, out-of-pocket is my main concern.

To learn more, visit our website at centerforbiosimilars.com. I’m Matthew Gavidia. Thanks for joining us.