Regence Leads the Industry in Biosimilar Adoption

prescription drugs
4 min read
Laura Sconyers
November 18th, 2022

The cost of prescription drugs continues to be a concern for Americans, with prices of many drugs outpacing inflation. Drug spending is increasingly driven by a relatively small number of high-price products, particularly specialty drugs called biologics used to treat Chron’s disease, arthritis, multiple sclerosis, certain cancers and other conditions. In 2021, the cost of specialty drugs, including biologics and biosimilars, totaled $301 billion, which is an increase of 43 percent since 2016. Specialty drugs represented 50 percent of total drug spending in 2021. For Regence health plans, biologics account for less than 2 percent of Regence’s insurance claims but are responsible for more than 55 percent of annual drug spend.

Greater adoption of biosimilars is one path to driving down drug costs in the United States. Effectively increasing uptake will require collaboration between all segments of the health care system. Regence health plans are leading the industry in biosimilars utilization with 95 percent adoption, thus reducing specialty drug spend by $30 million since 2019.

Join the Regence Health Policy Center on November 29, for a panel discussion with industry experts on “Improving Drug Affordability, The Promise of Biosimilars.” This discussion, moderated by Sam Yamoah, SVP and Chief Strategy Officer, Cambia Health Solutions, will cover the potential biosimilars have to reduce costs while continuing to provide access to high quality care and pose solutions to advance broader adoption.

Biologic and Biosimilar Drugs

Biologic drugs are manufactured from living cells through highly complex manufacturing processes. Biosimilars are biologics that have highly similar structural and functional properties to the original medicine, also known as the reference product. FDA-approved biosimilars have been shown to be a safe and clinically effective alternative to reference products and cost 15 to 30 percent less. 

FDA Approval of Biosimilars

Enacted in 2010, the Biologics Price Competition and Innovation Act established an abbreviated FDA approval pathway for biosimilars to enable broader patient access to lower-cost, high-quality products. This pathway requires that manufacturers submit data demonstrating no clinically meaningful difference between the biosimilar and the reference product. All FDA-approved biological products, including reference products and biosimilar products, undergo a rigorous evaluation by the FDA so that patients and health care professionals can be assured of the efficacy, safety, and quality of these products.

Biosimilars hold promise for competition

Biologic treatments are expensive, with annual costs averaging tens of thousands of dollars per member. Biosimilars can cost 15 to 30 percent less than their reference biologics, thus significantly reducing overall drug spending.

The introduction of biosimilar competition into the market has already driven down the cost of these drugs. As the number of biosimilars available on the market continues to increase, this dynamic holds potential to further drive competition between biologic and biosimilar manufacturers.  

According to an October report released by Amgen, 39 biosimilars have been FDA-approved since the first biosimilar entered the US market in 2015. Of the approved biosimilars, there are currently 22 available on the market.  Biosimilar products have gained significant market share in the therapeutic areas where they have been introduced, with products released in the last three years capturing an average of 75% market share.

It is anticipated that there will continue to be an increase in the number of FDA-approved biosimilars available to patients. However, of the available FDA-approved biosimilars, ten launches were delayed due to patent litigation between the reference product manufacturer and biosimilar manufacturer.  Drug manufacturers’ efforts to restrict competition through schemes such as patent gaming, pay for delay contracts, and drug exclusivity extensions threaten this outlook and negatively influence which FDA-approved products ultimately reach patients.

Regence is leading the industry in biosimilar adoption

Regence health plans are leading the industry in biosimilar utilizations with 95 percent adoption, reducing specialty drug spend by $30 million since 2019. To accomplish this uptake, Regence implemented a comprehensive strategy consisting of robust communications campaigns, medical policies supportive of members’ unique needs and alleviated provider barriers to switching. To increase familiarity with and foster trust in biosimilars, Regence developed educational content for members and providers highlighting their value, including safety, efficacy and cost savings. Frequent and transparent communications with members and their providers began as early as six months prior to a switch went into effect.

Regence pharmacists continually track new biosimilar products coming to market and accept the FDA stamp of approval that biosimilars meet stringent effectiveness and safety standards. When selecting preferred biosimilars, Regence evaluated manufacturer capacity to ensure treatment availability. Pre-authorizations for biosimilars were pre-loaded to facilitate an effortless transition for members and providers. Regence also informed infusion sites in advance of the switch to ensure they increased supply of preferred biosimilars to meet the higher demand.

Remicade (infliximab) is a widely used biologic that treats autoimmune conditions such as rheumatoid arthritis, Crohn’s disease, ulcerative colitis, psoriasis, psoriatic arthritis, and more.  The first biosimilars for infliximab were introduced in 2016, and three infliximab biosimilars are currently available in the U.S. market. However, the utilization of infliximab biosimilars has lagged other provider-administered biosimilars. When treatment for chronic conditions demonstrates effective symptom management, there is increased reluctance from both providers and members to switch to a biosimilar.

By designing and implementing a coordinated strategy that addressed both potential provider and member barriers, Regence helped move more than 90% of members using Remicade to the preferred biosimilar in three months. Numerous communication channels to members and providers, a clinically appropriate and thoughtful medical policy, and a prior authorization management plan were critical to the process and achieving early results.

Lowering health care costs benefits everyone

Health care costs, including visits to the doctor, prescription drugs, and treatments, directly impact insurance premiums and out-of-pocket costs for consumers.

A recent American Journal of Managed Care study estimates the savings from biosimilar adoption from 2021 to 2025 to be anywhere between $38.4 billion and $124.5 billion.

The higher scenario assumes quicker biosimilar market entry, greater biosimilar adoption, and more aggressive price competition. As more biosimilars enter the market, greater competition will continue to drive down costs while increasing access and affordability for these important treatments. Regence Health Policy Center will continue highlighting solutions to advance biosimilar adoption in our market states.
Laura is the Program Manager, Policy and Stakeholder Engagement. She develops and leads strategic alliances to build stakeholder and advocacy partnerships to drive policy initiatives. Prior to joining Regence, she worked with ecosystem stakeholders across Washington state, curating community and developing programming to help early-stage life science entrepreneurs thrive.