Prior Authorization Panel Yields Insights Into Role of PBMs in Biosimilar Uptake

A discussion at a recent community oncology conference yielded insights into recent dynamics between pharmacy benefit managers (PBMs) and practices over uptake of biosimilars—along with concerns that without reform, the savings gained from biosimilars could be lost.

Thursday’s session, “Prior Authorization: How the Sausage Is Made,” drew a large crowd during the Association of Community Cancer Centers’ 2022 Annual Meeting & Cancer Center Business Summit, held in Washington, DC. Most of the discussion focused on how prior authorization has increased administrative burdens on oncology practices. However, panelists suggested that the quest for rebates by PBMs prevents uptake of some biosimilars—and could soon bleed over into biosimilar formulary placement.

Collectively, the panel moderated by Ira Klein, MD, MBA, FACP, vice president for medical affairs and payer relations, Tempus Labs, said the system needs a lot of work. Andrew Hertler, MD, chief medical officer for New Century Health, said the system was intended not just to make sure treatments are necessary but also to ensure that practices get paid.

Prior authorization has become so broken that, “coverage itself is not access,” said John Hennessy, MBA, CMPE, senior vice president and strategist, Valuate Heath Consultancy. He explained that prior authorization transactions happen all the time—but most are seamless, such as handing a credit card to a hotel clerk, who makes sure the bill can be paid before checking in a guest.

In health care, by contrast, the process is both slow and unpredictable. “Prior authorization at some point was meant to protect people from low-value experiences,” Hennessy said. “When those transactions happen poorly, and they happen with great uncertainty, that value is lost.”

Lalan Wilfong, MD, executive vice president, Value Based Care & Quality Programs, Texas Oncology, and vice president of payer relations and practice transformation at McKesson Specialty Health, said practices that have assumed risk should not be subjected to the misaligned incentives that have plagued health care and kept costs high. His example is currently upsetting many oncologists: Anthem, he said, is telling practices they must use higher-cost rituximab instead of lower-cost biosimilars.

“Using prior authorization for formulary management is inappropriate,” he said. “We all know exactly what’s going on here.” Practices, he said, will be forced to carry more brands of rituximab and have more refrigerators, and nurses will have to know more formulations.

Hertler agreed, saying that rebates threaten to undermine the ability of practices to manage costs with biosimilars. “The rebates go one place, and someone else is paying the cost,” he said. “If I could eliminate rebates from the world, I would.”

He sees hope in approving “bundles” of care; for example, a patient with non–small cell lung cancer would be approved up front for diagnostic testing, scans at designated intervals, and a course of treatment.

Panelists discussed abuses with step edits, and Klein sees challenges in the diagnostic space.

“It’s not about which is the best product, but which has the best rebate for the payer,” Hennessy said. “If someone takes offense, I’m sorry, but that’s what’s going on. One of the challenges is, as we try as providers of care to take care of patients, to simplify this process, sometimes things outside of our control make it a lot more complex. And prior authorization, in some cases, becomes almost a contract negotiation on a patient-by-patient basis.”

Wilfong said the health system cannot allow mandates that drive up costs and don’t improve patient care. “Honestly, my fear is if we let this continue, or biosimilars start coming out at higher and higher costs, because they can get more and more rebates—that’s not the world we want to live in.”

Instead, savings achieved through the use of biosimilars should be invested in targeted therapies, where extra spending might be warranted, Wilfong said.

“Biosimilars are supposed to lower the cost of cancer care, and they did. But it's my fear is that we may actually flip into a world where that doesn't occur,” he said. “And I don't think any of us want to live in a world where cancer care costs continue to escalate rapidly.”