Drug Plans Decoded: Biosimilars Part 4.

Biosimilars in Canada: what plan sponsors can do.

For plan sponsors that want to take advantage of the savings available through biosimilar biologics, several options are available. Since the regulatory environment prohibits automatic interchange with the reference biologic, plan design is very much a driver of success for the selected option. However, given the unique nature of these drugs—which can be life-altering for patients—drug plan management must go hand in hand with corporate philosophy and plan member education.

In the last two years, provincial drug plans have become more assertive in promoting the uptake of biosimilars. Four provinces have implemented switching policies, which effectively delist reference biologics from their formularies so that patients have to switch to the biosimilar to continue receiving coverage from the public plan (click here to read more about provincial programs). 

While switching policies is certainly an option for private plans, some plan sponsors may not want to be perceived as “forcing” plan members to change their medication. If plan sponsors do take this route, however, plan member education around the safety of switching is essential.

As you consider options, keep in mind that by the end of this year eight biosimilars will likely be available for the reference biologics of Remicade and Humira (five will be new this year and are the first biosimilars for Humira).

For years, Remicade and Humira have ranked first and second, respectively, on TELUS Health’s top 10 products by eligible cost. Biosimilars for Remicade have been available for several years, priced at 52% of the reference biologic’s list price, yet Remicade’s share of eligible costs has not decreased: it was 4.7 % in 2018 and 2019, and 4.8% in 2020.

With this in mind, and now that biosimilars are available, purposeful plan design is necessary to better realize savings from biologics.

To start, plan sponsors would work with their insurance provider and benefits advisor to gather the necessary information from claims data to guide their decision-making. How many plan members currently take reference biologics for which biosimilars are, or will soon be, available? How many are already taking biosimilars? If possible, summarize trends for utilization, spending, and savings for the past several years, then try forecasting several years ahead, assuming status quo for now in terms of plan design.

With this information in hand, and knowing the corporate philosophy for health benefits plans, you will be better able to determine an approach for the private drug plan to either:

  • continue to provide coverage for reference biologics if that is what is prescribed; or
  • proactively promote, or possibly require, the adoption of biosimilars.

Here are some specific plan design options:

Prior authorization for new patients.

The drug plan’s prior authorization program can be set up to give preferential listings to biosimilars, so that new patients must try a biosimilar first to receive coverage.

Switching policy.

Private drug plans could adopt biosimilar policies that are aligned with provincial switching policies, meaning that only cover biosimilars. Reference biologics would no longer be listed in the formulary, although plan members could apply for exceptions for medical reasons. This option may be most appropriate in pharmacare provinces, such as B.C., if plan sponsors are concerned about patients turning to their private plan for coverage of a reference biologic that is no longer covered by the public plan.

A related option would be a “soft switching” policy that would reduce the eligible cost of the reference biologic to equal that of the biosimilar. Plan members could still submit their claim for the reference biologic, but would have to pay the difference in cost if they wish to remain on the reference drug.

Product listing agreements.

Product listing agreements (PLAs) may be the most appropriate option for plan sponsors who wish to offer the choice of biosimilar or reference biologics to plan members, and/or those who have the capacity to possibly take on more coverage of reference biologics for which biosimilars are available (i.e., in provinces that have adopted switching programs). These price reductions are negotiated with manufacturers of reference biologics and can be put in place even before biosimilars become available, across all indications. A potential drawback, however, is that PLAs are confidential, which may make it more difficult to know the level of savings.  

Whatever the approach and tactic, the changing biosimilar landscape warrants actions by carriers and plan sponsors alike to help mitigate the rising cost of drug benefit plans and maintain their sustainability. Strategies for reference and biosimilar biologics are not one size fits all; they can, and should, evolve as experience grows here in Canada as well as around the world.

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