Biosimilars, GLP-1s, and Stop-loss: Topics Benefit Advisors Need to Consider in Q3 2023

Making the best recommendation to your clients requires looking beyond the spreadsheet comparisons of price points and building a layered plan for the future of pharmacy benefits that meets their unique needs.  Because pharmacy is the most frequently used healthcare benefit, the cost continues to grow as a percentage of healthcare spend year over year, with specialty meds now rapidly accelerating spending. As we head into the third quarter, it’s important to inform your clients about the market forces impacting 2024 and how they can find the right path to meet their benefits goals.

At our recent webinar, “RxBenefits Innovation 2023”, many benefit advisors and plan sponsors asked our pharmacy benefit experts about what’s impacting self-funded plan sponsors. The answers to these questions will help you peer around the corner into 2024.

Watch the webinar RxBenefits Innovation 2023

Why are diabetes drugs costing plan sponsors more than ever while insulin prices are decreasing?

After the Inflation Reduction Act capped insulin costs for Medicare enrollees, drug manufacturers Lily, Novo, and Sanofi slashed the price tags of insulins, but plan sponsors still feel the weight of diabetes drugs.

Diabetes drugs are consistently in the top three cost-driving therapeutic classes for pharmacy benefits, and they accounted for 18% of total gross cost for RxBenefits’ Book of Business in 2022.¹

The growing costs in this category can be attributed to more Americans developing Type 2 diabetes and an increased interest in the next generation of diabetes drugs being used off-label for weight loss.

Celebrity promotion, social media trends, direct-to-consumer advertising, and growing telehealth platforms have taught Americans that drugs like Ozempic and Mounjaro can be used for weight loss. And the demand for these drugs has grown exponentially in a short amount of time. About 40% of plan spending on GLP-1 diabetes drugs may be due to off-label prescribing. Ozempic alone represents 4% of the total plan cost for the average client.¹

If off-label prescribing is an area where an employer wants to limit their exposure, having the proper utilization management programs (like prior authorization, quantity limits, and step therapy) can help protect the plan and ensure they’re only paying for medications used for an FDA-approved indication. Not only will benefit advisors help plan sponsors reduce wasteful spending, but they can also shield members from potential negative side effects.

How will biosimilars impact specialty drug pricing in 2024?

This summer, there’s growing interest in biosimilars – drugs that closely mimic an existing, approved biologic. Biosimilars have yet to gain enough traction to drive down specialty drug costs broadly. They face more stringent approvals, supply issues, and, if the biosimilar isn’t interchangeable with the originator, a new prescription.

Anti-inflammatory medications and dermatological agents account for 27% of total gross costs for self-funded plan sponsors who work with RxBenefits.¹ Humira, which treats rheumatoid arthritis and numerous other conditions, falls into this category of drugs. With eight FDA-approved biosimilars for Humira hitting the market this year, the competition is heating up fast.

One of these biosimilars, Yusimry, launched at a price point lower than most pundits would’ve anticipated in June, and it will put pressure on those molecules launching later this year. RxBenefits is committed to providing all clients with the most effective and lowest net cost drug in this category, and there are many more coming to market this year. One of the products coming out in July will be interchangeable with Humira, and several more are looking to obtain interchangeable status.

Coming January 2024: Proactive, human-driven clinical collaboration for anti-inflammatory medications and dermatologic agents.

Historically when we see a brand lose its patent and multiple generic manufacturers come to market, we see a race to the bottom in terms of price, and that forces a shift towards generic adoption rather rapidly. If price points for the other biosimilars are similarly low, there may be a shift to biosimilars rather rapidly, impacting plan costs in 2024.

As new biosimilars launch, benefit advisors should focus on programs that can find the most appropriate treatment for a member and their plan while communicating proactively. Member-focused intervention can be critical for better outcomes and decreasing specialty costs.

Will stop-loss coverage shield self-funded plan sponsors from growing drug costs?

The need for strong protection against the rising costs and risks associated with specialty medications is apparent for self-funded plan sponsors and the benefit advisors who guide them. Specialty medications provide breakthrough, sometimes lifesaving treatments for complex, chronic, and rare diseases, but the thought of one of these catastrophic claims hitting their plan keeps employers up at night.

A well-conceived self-funded plan includes quality stop-loss coverage as a backstop for unforeseen medical and pharmacy claims, and these programs work best for short-term surprises. Unfortunately, this coverage wasn’t built to cover recurring therapy management over several years, especially when treating chronic conditions. Stop-loss premium rate hikes or new lasers can return the cost to the plan sponsor. Plan sponsors typically see their stop-loss rate increase 50% or more after a catastrophic claim hits the plan.

When traditional stop-loss doesn’t go far enough, plan sponsors need supplemental stop-loss for pharmacy claims.

Learn about affordable supplemental stop-loss for specialty medication claims. 

How will legal battles impact the future of patient assistance and manufacturer coupons?

Patient assistance and manufacturer copay assistance programs (MCAPs) provide relief from expensive drug prices for members and plan sponsors, but legal battles have people asking, “Is this the beginning of the end for these solutions?”

Shortly after AbbVie – the maker of Humira – changed their Patient Assistance enrollment qualifications, the company filed a federal lawsuit against Payer Matrix. Legal experts also continue to monitor legal action between Johnson & Johnson and SaveOnSP that may impact the future of MCAP.

It will take time for these lawsuits to go through the courts, and we most likely will see other manufacturers follow suit as they look to maximize revenue while providing financial assistance to only those who need the dollars most.

How to evaluate alternative funding programs for your client.

With our partner programs that provide patient assistance, we’re focused on finding solutions that help members with orphan conditions, and when there are qualified patients that we can get placements with Patient Assistance solutions, we make those meaningful placements with our partners. Combining these Bridge solutions with our Protect program ensures we’re rooting out wasteful spending and prescriptions that should never make it through the system and providing good clinical oversight for specialty medications and the other drugs these members are likely taking to coordinate care.

Create tailored pharmacy benefit solutions that fit your clients and their members

Any rock climber will tell you: Mitigating risk requires layers of protection. And as your clients’ trusted benefits expert, you’ve seen the kind of risk they face.

If you’re hearing concerns from your clients – worries about one huge specialty claim impacting their budget, balanced by the drive to give their employees access to the medications they legitimately need – you’re not alone.

You can help your clients build a strong plan that adapts and evolves – a plan with innovative, responsive solutions designed to meet the challenges they face today and the ones that loom tomorrow.

That’s why RxBenefits is committed to innovation. We’ve been listening to you and your clients and responding with smart, targeted enhancements and all-new solutions to take on the challenges they’re facing now and the ones coming in the future. You’re the expert for your clients, serving them and earning their loyalty. We’re your partners with innovative solutions to help you do that.