Formulary guidance and transparency from P&T to point of care

Perspectives on Biologic Coverage

Posted by Matt Breese on Nov 15, 2016

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The introduction of biologics, just a decade ago, was a groundbreaking innovation for the pharmaceutical industry. Due to the complex and costly manufacturing processes involved, it is essential for pharma companies to understand how their products are covered, how competitors are covered and how regulations impact this across payer formularies.

The Affordable Care Act and CMS (Medicare) have provisions, protecting the exclusivity period for these products but these regulations do not completely mitigate risk. Biologics face restrictions like prior authorizations and step therapies. Currently, many patients shoulder significant financial burdens. The healthcare industry faces the challenge of determining who will be responsible for covering these high-cost treatments in the future.

What are Biologics?

According to FDA, “Biological products often represent the cutting-edge of biomedical research and, in time, may offer the most effective means to treat a variety of medical illnesses and conditions that presently have no other treatments available.”

Milliman’s 2016 Research Report revealed, specialty biologics reached 38% of total drug spend in 2016 and are now the fastest growing class of biopharmaceutical products.

Rheumatoid Arthritis Treatment

Biologic products help manage many chronic conditions, such as rheumatoid arthritis (RA). NCBI reports, RA affects 1.3 million people in the United States.

Before biologic treatment, “RA was among the most debilitating chronic conditions, with one in three patients permanently disabled within five years,” states NCBI. Today, managing RA is possible with the use of disease modifying rheumatoid arthritis drugs (DMARDs.) This treatment reduces patient symptoms and improves their quality of life.

MMIT’s Reality Check on Rheumatoid Arthritis revealed, “depression is more common in RA patients than in the general population.” The health system must ensure that patients with multiple conditions are receiving adequate treatment.

Affordable Care Act Coverage

The Affordable Care Act (ACA) originally granted exclusivity to biologics by preventing biosimilar products from entering the market for 12 years. The purpose of this was to encourage the development of new biologics.

Medicare’s Part D Coverage

According to NCBI, “Nationally, nearly all Part D plans cover at least one biologic DMARD, but the vast majority require sufficiently high cost sharing to risk significant financial burden to patients.”

The Part D plan has three primary cost and coverage policies:

  • Prior authorizations
  • Specialty tiers
  • High patient coinsurance

Clinical staff members are often challenged to secure biologic treatment approvals for patients. This process involves complex paperwork and often delays patient therapy, negatively impacting the quality of life and overall patient satisfaction with care. Even with health insurance, patients often face significant financial burdens to receive biologics. These high costs may deter patients from receiving the level of treatment they need. The NCBI reports, “A national survey of 1,100 adults with RA found that 1 in 6 decreased medication use due to cost, potentially resulting in worse outcomes.”

Biologic Coverage Strategies

  1. Understand the target therapeutic market and let historical analysis of relevant analogues guide forecasting models.
  2. Leverage trusted market information to assess what a successful contracting strategy involves for a new-to-market brand.
  3. Analyze payer and PBM behavior in the target therapeutic class for each channel – commercial and government sponsored – to appropriately set expectations around barriers to market access at launch. Go beyond the restriction to understand trends within each payer’s policies.
  4. Implement a plan to arm field teams with the appropriate strategies to overcome inevitable market access challenges and payer blocks during the first six to twelve months of a brand’s adoption cycle.
  5. Normalize restriction details so that field teams can successfully educate HCPs. Payer/PBM utilization strategies may be complex, so prepare teams and arm them with actionable insights.

Jinoos Yazdany, MD, MPH, a rheumatologist at the University of California has proposed potential solutions for health reform, "Americans may be better served if drug coverage moved away from high coinsurance to focusing on payment and coverage innovations that aim to improve health outcomes while containing cost.” As more biologics enter the market, new policies will be made to manage the high costs of these products.

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Topics: Market Access, Payer