As debate rages, PBM sees big savings in biosimilars

As debate rages over drug prices, one of the country’s largest pharmacy benefit managers is touting biosimilars as a way of achieving significant savings over the next five years.

Increasing availability and use of biosimilars could bring savings totaling nearly $40 billion over the next five years, Dr. Steve Miller, the chief medical officer for Express Scripts, told American Pharmacy News.

Drug prices are at the center of a fierce national debate, with pharmaceutical companies coming under sustained attacks in recent weeks.

It was ignited this time by the revelation that Mylan raised the two-pack price of its anti-allergy treatment, EpiPen, from $100 to $600 since 2007, when the company acquired the product.

Presidential candidate Hillary Clinton weighed as well, claiming drug companies put profits ahead of patients, raising prices “without justifying the value behind them.”

Dr. Miller, of St. Louis-headquartered Express Scripts, said skyrocketing drug price inflation and premium-priced therapies for large patient populations are driving up costs for patients and payers.

“Drugmaker consolidation, price hikes ahead of impending patent expirations and hyperinflation on older medications without therapy class competition all contributed to increased drug spending,” Dr. Miller said.

Express Scripts’ researches and publishes its own Prescription Price Index, which the company said shows the average price of brand name drugs increasing 16.2 percent in 2015 and 98.2 percent since 2011.

It also reported one-third of branded products experienced 2015 price increases greater than 20 percent. Generic drug prices decreased, on average, 19.9 percent between 2014-15, Express Scripts found.

“Total drug spending is forecast to increase between six and eight percent annually between 2016 and 2018,” Dr. Miller said. “Specialty spending, led by inflammatory conditions and new discoveries for cancer, is forecast to increase an average of 17 percent annually over the next three years.”

Dr. Miller predicted potentially big savings totaling $39.7 billion from the use of biosimilars over the next five years. He cited non-brand alternatives for two of the three top inflammatory drugs, Remicade and Humira, which could reach the U.S. market in 2017.

Pharmacy benefit managers are in the business of trying to slow price increases for insurers, but Dr. Miller said the benefit does not always trickle down to the consumer.

“Working collaboratively with our clients, we kept the increase in drug spending to just 5.2 percent in 2015, roughly half the increase seen in 2014,” Dr. Miller said. “More importantly, at a time when many plans around the country have been shifting more costs to patients via higher deductibles and out-of-pocket expenses, Express Scripts members’ average co-payment decreased 3.2 percent last year."

The issue of drug pricing is complicated by the complex way they are distributed to the consumer, who pays, and how much they pay.

As an example, Anthem, one of the country’s largest insurers, is currently involved in a legal dispute with Express Scripts. Anthem wants to end its contract with Express Scripts, alleging the PBM failed to renegotiate lower prices for drugs.

Express Scripts claims in court papers Anthem rejected proposals to renegotiate prices, a report in Kaiser Health News stated.

Dr. Miller said that for 30 percent of Express Scripts clients drug spending was flat or negative in 2015.

“In addition, Express Scripts clients implementing four or more cost-saving solutions, on average, held their 2015 increase in drug spend to 3.3 percent — nearly two percentage points lower than the national average,” Dr. Miller said. “If all U.S. plans adopted similar strategies, national drug spend would have been reduced by $6 billion.”