Part 2: Christine Simmon Discusses Payer Influence on Provider Behavior

For part 1 of this interview, click here.

The Center for Biosimilars® (CfB): Hello, Matthew Gavidia. Today on the MJH Life Sciences News Network, The Center for Biosimilars® is pleased to welcome Christine Simmon, Executive Director of the Biosimilars Council and senior vice president of policy and strategic alliances at the Association for Accessible Medicines (AAM).

Could there be any fallout for the Part D Senior Savings model for insulin products, which appears to be alleviating the cost burden for Medicare beneficiaries?

Simmon: There are a lot of implications for the health care system as a whole if the Affordable Care Act is ruled unconstitutional by the court. The Affordable Care Act created the center that would do the model, the Center for Medicare and Medicaid Innovation. So, if the Innovation Center no longer existed, you couldn't do the model. There are some issues around the doughnut hole and coverage gap discount program that the model is predicated on. That also would be called into question if the Affordable Care Act were struck down. So, I think it would have pretty dire effects in terms of premiums and out-of-pocket costs for that to happen. I think that we could see our efforts to move this model forward pretty stymied. So, we'll have to continue to hope for the best.

CfB: Assuming that the BPCIA [Biologics Price Competition and Innovation Act] survives, are you confident that the new insulin pathway will contribute to more product diversity and lower prices?

Simmon: I think, if you mean diversity in the sense there'll be more competition, then yes. During the time the insulin pathway was being created, former FDA Commissioner, [Scott] Gottlieb [MD], noted that it was hard to bring a generic insulin to market under the small molecule pathway. Now, that we've moved past the transition, and biosimilar applications for branded insulins can be submitted, there should be additional products and lower prices, especially as the FDA has signaled making attaining interchangeability for biosimilar insulins much less burdensome for manufacturers.

CfB: At the recent NCCN [National Comprehensive Cancer Network] virtual meeting, Mike Kolodziej noted that payers are increasingly taking advantage of manufacturer rebates and this is affecting access to biosimilars. What are your thoughts on this?

Simmon: Well, this is a phenomenon we've known about for quite some time. We call it the rebate trap. When it's more lucrative for a plan or payer to prefer a more expensive [reference] product than a cheaper, or less-expensive, biosimilar, the threat of losing market share to the lower-cost biosimilar. It forces [reference] manufacturers to up their rebate dollars, and the payer doesn't want to lose the rebate dollars. So, it creates this vicious cycle.

There is an article that just came out a couple weeks ago in the Journal of the American Medical Association, highlighting that last year, major payers only preferred biosimilars 14% of the time, over the brand counterparts. And that's pretty discouraging when you think about the fact that biosimilars are coming in at around a 30% price discount, yet they're not getting a preference on a formulary. Many have pointed out that while drug prices aren't increasing on a net basis, list prices are going through the roof. So, the price a plan actually pays for a drug, which is proprietary, is unknown, and the plans don’t pass the rebate dollars to the patient, necessarily. So, it's very much an opaque system that really creates a barrier for biosimilar competition.

CfB: Lastly, it's a growing concern among providers that payers and vendors are dictating which biosimilars they may use, which causes many complications and raises the potential for errors and use of these products. What are your thoughts on this?

Simmon: It's an interesting question. I think that the very fact that the FDA mandates random suffixes on the nonproprietary names of biosimilars is part of the problem because otherwise they'd just be identified by their brand name. But I do think that there's an issue for smaller provider clinics. It's hard as a smaller provider to take part in the buy-and-bill system under Part B when you have to pay for a drug up front, and you have to stock multiple versions of any product. Herceptin [trastuzumab] is a good example where there are different versions and certain payers are only covering certain products. So, from an inventory control and management perspective, you're having to buy products, stock them, keep them in inventory, yet you may never end up dispensing that product and getting reimbursed for it.

But when you have a large hospital system and a larger physician practice, then it's more of a bait-and-switch tactic and we've seen this on the state level, or hospitals say they don't want to stock every biosimilar, and what they want is “parity legislation” that requires a payer to cover whatever version of the product a provider prescribes, regardless of the payer's formulary. That really provides a backdoor to allow the hospital to dictate which product they want and can get the most value for, in sort of an inversion of the rebate trap. So, it's a different means to the same outcome, again, acting as an obstacle or barrier for getting biosimilars into the hands of patients.

CfB: Thanks, Christine.

Simmon: Sure. Thank you.

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