Understanding biologics and biosimilars and their impact on health plan formularies

What are biologics and biosimilars?

Unlike common small molecule drugs, which can be replicated as generics exactly from their chemical recipes, biologic products are created using a wide range of components such as sugars, proteins, nucleic acids, or living entities like cells and tissues, and thus can never be replicated the same way when reproduced as generic formulations, Eckert explains. “You can’t get exact duplicates of what [biologics] are,” she says. “You can get really close, so that [the generics are] going to act the same way and behave the same way, but they’re not identical. Those are the biosimilars.”

Although biosimilars function in many ways as generics for branded biologic products, they can’t be managed the same way as small molecule generic drugs within the prescribing-dispensing-reimbursing system. “Because of that nuance – that they’re not exactly the same as the originator product – the FDA tracks each one differently, because they may end up with different side effects,” Eckert explains.

In essence, each biosimilar has to be treated as a wholly unique product, albeit associated with its biologic reference product, when being considered for formulary inclusion and use in treatment.

Therapeutic substitutions and interchangeability

Typical generics of small molecule drugs often have a multitude of inexpensive options and can usually be substituted one-to-one as comparable therapies for each other, but biosimilars are not as plentiful and may require a more involved process to which to transition a patient, so they aren’t as easy to substitute for the original biologic drugs, Combs explains. This can create challenges for patients needing more cost-effective or efficacious alternatives, and also for payers and pharmacies needing similar flexibility to build formularies and stocks.

Biosimilars “tend to be 10-to-30% less expensive, which is not insignificant when you're starting to talk about drugs that can be in the range of $200,000 to millions of dollars, and have just recently started to be preferred on payer or PBM formularies,” notes Combs. Biosimilars and biologics have, to date, most commonly been developed for immunology, antidiabetic, and oncology treatments.

Payers as decision-makers require solid evidence and backing before making formulary decisions regarding biosimilars. According to Combs, “Payers haven't gotten a lot of traction in switching from the reference drug to the biosimilars.” Part of the reason for that, she says, is it can be difficult to find evidence to ensure the therapies are interchangeable. Eckert adds that, even if the therapies are interchangeable, since the products technically aren’t the same, there can be complications in the substitution process, such as requiring the patient to obtain a new prescription for the biosimilar.

These administrative and logistical complications can be further compounded by care continuity concerns expressed by both plan member patients and providers. Some patients dealing with the complex conditions for which biologics and biosimilars are prescribed are hesitant to switch therapies to an interchangeable option, even considering cost-savings, for fear it will interrupt the success of their current treatment. Providers, similarly, can express concern about too much “switching” affecting efficacy and creating therapeutic resistance.

Building data solutions for classifying and working with biosimilar drugs

Payers working with biosimilar products on their formularies need drug data that takes into account the complexity of these drugs in addition to enhancements to current drug data attributes, such as extended reference concept numbers to account for biosimilar-specific aspects, in addition to information concerning therapeutic alternatives and indications, Combs advises.

Eckert points to the Medi-Span® GPI (or Generic Product Identifier) as an example of a concept that serves as a solid foundation for classifying and grouping biosimilars. The 14-character identifier enables healthcare professionals to group biosimilar products with related products, including their biologic originator product, she explains. “You’re able to group all of these biosimilars and the brand together, even though they have different names. Then we also have content that identifies if this one is interchangeable with that one or just biosimilar to it. The data helps group and organize this data for analysis.”

While more widespread adoption of biosimilars has been slowed by several challenges, many see the potential in these products to deliver care benefits and cost savings across the healthcare ecosystem. Since the launch of the first biosimilar in 2015, biosimilars have generated nearly $24 billion in savings. With the right tools to help group, manage, and analyze biosimilar products and data, payers and PBMs could more effectively leverage these products in their formularies.

Learn more about internal team data alignment by downloading the whitepaper “Bridging the value gap: Aligning medical and drug benefits for health insurers”, and explore drug data solutions for payers and pharmacy benefit managers.