Humira, which treats rheumatoid arthritis and costs a small fortune, is a blockbuster drug that millions of Americans depend on. Fortunately, there are now far lower-cost biosimilar alternatives. Arthur Allen reports for Kaiser Health News that health insurers and the drug company middlemen they work with have no interest, and everything to gain, from not promoting biosimilars, needlessly costing our health care system hundreds of millions of dollars a year.
Humira is a biologic, made with living cells, with a list price of $6,600 a month, while biosimilars cost just under $1,000 a month. So, if the prescription drug marketplace worked, most everyone would be taking the biosimilar. But, the Pharmacy Benefit Managers or PBMs, who are responsible for designing insurer formularies– the list of prescription drugs an insurer covers and at what copay–have a financial interest in continuing to steer people to Humira, as do the insurers.
Even though Humira’s list price has increased six-fold since it was first launched in 2003, the PBMs make money offering it, as do the health insurers. The PBMs receive rebates from Humira’s manufacturer, AbbVie, for promoting the drug and share the rebate with the insurers. The only people who lose are the insureds.
If 313,000 people who take Humira instead took a biosimilar, the equivalent of a generic version, our health care system could spend about $9 billion less. But, companies manufacturing the Humira biosimilar can’t afford to give PBMs big rebates. So, the PBMs are less interested in promoting their drugs.
Other wealthy nations don’t have PBM middlemen and therefore don’t deal with these gross financial incentives that drive up health care costs. In other countries, almost everyone has switched to a Humira biosimilar. With the profit motive driving insurers and PBMs in the US, however, it’s not clear whether companies manufacturing biosimilars can survive here.
It costs about $200 million to develop a biosimilar. Without substantial sales, it’s not worth the effort. Unless Express Scripts, Optum Rx, and CVS Caremark three large PBMs, reduce the copay for the Humira biosimilar so that it’s less than the copay for Humira, doctors are not likely to prescribe the biosimilar, and the PBMs will kill the biosimilar market.
What’s crazy is that the price of biologics continues to rise at a rate of 12.5 percent a year over the last five years, and it is not affecting the market for them, even when there are biosimilars.
Allen reports that AbbVie is telling health insurers that, if they promote biosimilars over Humira, AbbvVie will cut the rebates it pays them for Humira and other drugs it manufacturers. AbbVie also reportedly increased rebates to PBMs for Humira.
To be clear, even though patients might have the same copay for Humira as for a biosimilar, their health insurance premiums are significantly higher because people take Humira and not a biosimilar. Humira costs more. Moving to the biosimilar would reduce health care spending and make health care more affordable, helping to ensure people get needed care.
Even with Medicare, the annual copay for Humira can be as high as $8,000.
Doctors don’t steer their Humira patients to biosimilars as they tend not to want to switch their patients off medications that work. Even though the biosimilars appear to be as effective as Humira, if patients aren’t saving money by switching off Humira, they have no interest in messing with their drug regimens.
Small PBMs and insurers who don’t make their money off of drug rebates, such as Prescryptive and Kaiser Permanente, have moved most of their patients to biosimilars, saving their patients money. Prescryptive says that switches to biosimilars have happened “with absolutely no interruption of therapy, no complaints, and no changes.”
Here’s more from Just Care:
- Prescription drug middlemen, PBMs, will always drive up drug costs
- Blue Shield of California ends contract with CVS Caremark in attempt to lower drug prices
- 2023: Medicare Part D prescription drug coverage and costs
- Insurers profit from Rx rebates, not patients
- The deadly consequences of out-of-pocket drug costs
