AH083 - Your PBM vs. Your Bottom Line: Biosimilars & Rebates, with Bridget Mulvenna

Transcript

Lightly edited for clarity.‍

[00:27] Justin Venneri: Hello and thank you for joining us for another episode of the Astonishing Healthcare Podcast. This is Justin Venneri, your host and Senior Director of Communications at Capital Rx, and Bridget Mulvenna, Vice President of National Business Development, is back in the studio with me today to chat about how things are changing with a focus on biosimilars and specialty pharmacy.  

We're going to be discussing what she's been seeing and hearing out there over the 2025 selling season, how she's working with plan sponsors to address some of the issues around biosimilars in specialty pharmacy. Bridget, thanks for joining me in the studio again.

[00:59] Bridget Mulvenna: Great to be here. Thanks for having me back.

[01:01] Justin Venneri: So starting off, rebates. They've been a core financial lever, and I don't think we can have this discussion without a little bit of setup. Can you talk about the role of biosims and specialty there and sort of fueling rebates for plan sponsors?

[01:15] Bridget Mulvenna: Well, yeah, you know, specialty drugs at their core are biologically derived drugs, whereas non-specialty is chemically derived. And so I think that's a great way to sort of delineate those two. Specialty drugs have dominated the market and have really taken over our plan sponsor spend, pushing 50%, and in some cases, higher 50%+ percent of total spend while only being about 2% of use. And so that should definitely indicate to people that they're very expensive.  

And so as biosimilar drugs, which are not generic equivalents of specialty drugs, enter the market, we are going to see significant reduction in total rebate value because the price of the biosimilars are significantly lower than the prices of the original specialty product.

[02:06] Justin Venneri: So you've talked about ending our addiction to rebates previously on the show or webinars. When do you think we'll see meaningful change there? It's like a price of the drug and then there's a rebate. So there's this gross to net bubble and then there's drug mix, and you can see how things change or don't based on how you're managing the plan.  

Do you think we're at an inflection point? Do you think plan sponsors really are starting to understand the math better?

[02:29] Bridget Mulvenna: I think some plan sponsors do. If you understand that if your rebate offer for a PBM contract is high, that that means your drug prices or your total net cost is going to increase as a factor of that, then you're able to make better decisions. But there are still plan sponsors who are addicted to that high rebate number. And if you're doing an appropriate biosimilar shift, the rebates should be significantly lower than anything that you would in an arrangement where you're favoring those legacy or originator products.  

And I'll throw some examples out there. Right now the hot topics are around Humira®, which has had biosimilars available in the market for a while, and there are some interesting idiosyncrasies around that specific drug. And then Stelara®, which really started to see biosimilars enter the market this year. And if your rebate guarantees are still sitting at around $5,000 per specialty, then that should indicate to you that there's probably not a favorable biosimilar offering in place at your PBM because rebates should be much lower than that on a specialty guarantee if you're favoring biosimilars.  

And one example I'll use is like Stelara. If you just look at the WAC of Stelara, it's upwards of $26,000, $27,000. But the average price of the low WAC Stelara biosimilars is somewhere around $4,000. That's a giant delta, just in cost. And so at that point I'm thinking, who cares if you get a rebate if I'm paying $4,000 today for a drug I was paying $26,000 for yesterday?

[04:17] Justin Venneri: And what should self-funded plan sponsors do now? Can they reframe the value equation and sort of refocus what the intent of their program is? Can they pivot to more of a net cost approach easily? How does that work?

[04:32] Bridget Mulvenna: Yeah, I don't know how easy it is for folks to pivot to a net cost equation because in order to do that you need data. So rewind to our episode in May (AH064), you know, you need to be able to have your data to understand what's happening. And if you do have your data, then you're able to evaluate what was the total plan paid cost before and after rebates. That's how you get to net cost, right?  

And there's a new thing in the equation, not really new, but it's sort of taking over the industry because of the rise of some other high-cost brands. So there's copay assistance dollars, too. And so how do you really get to your true net cost if you don't know exactly what was dispensed, what the rebates were, and what copay assistance dollars were that were passed on then to the plan?  

So the other thing is, is that are your members, how do you know that your members are accessing the lowest net cost option? Because as I stated before, there have been Humira biosimilars in the market. There are a couple of products that several vertically integrated PBMs have private labeled and those are generally at a higher WAC. And then there are a handful of low WAC biosimilar options which, you know, again define biosimilars. These are drugs that are biologically similar to the originator product. They're not generic equivalents. But some of the newer biosimilars that have entered the market are what we call interchangeable in the same way that say a generic and an originator brand product are at the pharmacy.

So really important to understand, you know, which ones are on the formulary and whether or not the originator product is favored because of its rebate status or low WAC biosimilar options are favored because of their status.

For more on the importance of access to plan data:

🎧 AH030 - Plan Sponsors Need a Source of Truth; Get Your Data Now & Find It, with Jeff Hogan

🎧 AH048 - High-Cost Orphan Drugs, Securing Claims Data, and More, with Dr. Eric Bricker

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[06:20] Justin Venneri: And neither of us are clinicians, so we're not going to go too far into the rabbit hole here. But it's interesting, you know, Humira, Remicade®, Enbrel®, there are several. You mentioned Stelara,.. how should plan sponsors - and how should they explain to members the decisions they're making regarding the formulary, the sort of cost management approach to try to balance the access and affordability?

[06:42] Bridget Mulvenna: Well, I think you have to sell it two ways, is, you know, if we're going to keep costs down and continue to provide robust benefits to all of our employees and their family members, then we need to make these decisions to adopt a biosimilar approach, maybe give up some of the rebates, but end up with a lower net cost. At the end of the day there's also a need to educate prescribers. And so coming up, working with your PBM or your PBM account management team, and again, it varies across the industry what that looks like. Come up with some verbiage around that you can use to educate your members on why you made this decision that these are the same as generic drugs, in essence, you know?

[07:28] Justin Venneri: Yeah, air quotes. I saw the air quotes there.

[07:30] Bridget Mulvenna: Air quotes. In essence, they're biologically similar, and they are also going to help reduce overall plan costs, which potentially can have the impact of maybe we won't need to raise premiums as much next year. And that's happening a lot across the industry right now because health care costs in general are going up. Pharmacy still remains a large part of that.  

But pharmacy costs are generally not the primary focus when we're talking about a renewal every year. We're really focused on what the overall medical is going to cost from a premium perspective. And so maybe we can keep premiums low. Maybe if we shift enough of these specialty originator products to biosimilars, we can reduce the copay on those drugs and maybe put them in more of a brand category. Because there comes a point where the pricing of these biosimilar products starts to approach more of what a high-cost brand is versus a high-cost specialty.

[08:26] Justin Venneri: Interesting. In a way, my next question was sort of about reassessing PBM contracts. And you've talked about the contracts before. Josh has talked about contracts before on our Pharmacy Benefits 101 rebates content. Ben talks about contracts and the importance of contract definitions. What can plan sponsors do? Is it the buckets you were just talking to and like how they think about providing the access to the medication to the plan member through the plan design? And then having the contract just reflect like, hey, this is how I want to categorize these drugs, or they not even worry about it, and you want to make sure that the definitions are broader and inclusive.

[09:00] Bridget Mulvenna: Well, I think you hit it a little bit: build your plan design in a way that favors biosimilar use in some ways. Try to incentivize people to use more biosimilars if you can. And trust me, financial incentives work best. That has been my experience when I managed a plan. It's been my experience here in driving more generic and more biosimilar utilization. Financials make patient decisions easier, especially when patients are suffering to buy basic things like gas and food, right? And prescription drugs are a big part of the rising costs of everything in America. So that's around plan design.  

But let's talk about contracts. You need to understand your PBM's policy. Are you going to be penalized if you move to biosimilars? If there are penalties to not go with the high-cost branded product, or for not adhering to a formulary because there aren't enough low WAC biosimilars on formulary, that's a red flag. And so that sort of disincentivizes biosimilar use, which in my mind, it really is kind of a gross use of power that the PBMs have that they're driving folks to use more expensive products, and then push for transparent pass through pricing. You want to reward lower list prices and not bigger rebates.  

And I think that that's really critical is that when you're evaluating a PBM during an RFP and you're looking at that bottom line number often what's winning? Not all the time, but often what's winning is the highest rebate. And I can't say this enough, the bid with the highest rebates has the highest all in drug costs. And it's not a guess, and I'm not making this up, and I'm not pretending to know this.

Related Content

• Will Biosimilar Rebates Pass-Through?
• Health Benefits 101: The Importance of a Transparent PBM Model
• How to Manage Pharmacy Benefit Spend in a GLP-1 World
• Pharmacy Benefits 101: What is a Formulary?
• Pharmacy Benefits 101: Pharmaceutical Rebates

[10:39] Justin Venneri: And as a plan sponsor in the seat you used to sit in, how did you think about - you had your data. You were good at crunching the numbers on your data and understanding what was driving costs and what your members needed. How do you think about clinical engagement and the clinical programs around these higher cost drugs and chronic medications, for example?

[10:58] Bridget Mulvenna: I think it's really important to have a high degree of clinical engagement and to have a PBM partner, your internal partners. You've got that fiduciary committee. Everyone needs to be educated. And then you need to have a coordinated communication plan, maybe lettering campaigns out to physicians. So if you have your data, then you have all of the NPIs, or the National Prescriber Codes, for every physician that has prescribed these drugs.  

And so you can extract that data down and develop a communication plan with your PBM to outreach to those providers - this plan is favoring biosimilars - and send some education to the providers, but then also provide and in your open and enrollment materials, one pagers, in your open enrollment webinars and informational sessions that your PBM sometimes attends, information about biosimilars. Because people do get nervous when their drug changes. And we found that as we've had major shifts away from originator brand products in the chemically derived position, there has been some pushback on generic drug use. And it took years to get a more broad adoption of generic drug utilization.  

And a lot of that happened around plan design and zero copay options. We need to do something similar around biosimilars and kind of focus on plan design and ways that we can not only educate but also incentivize members to use biosimilar products. You know, maybe having two specialty tiers, almost like there are generic specialty drugs and there are brand specialty drugs, let's move those biosimilars into a generic tier and let's start driving people towards those lower cost products.

[12:46] Justin Venneri: Interesting idea. Okay. And then I guess let's talk a little bit about what's next. I'm going to start with one of the hotter topics, of course, GLP-1s, cell and gene therapies. These categories are huge. Sometimes they are, sometimes they aren't in the pharmacy benefit, on the cell and gene therapy side, of course, but GLP-1s are very squarely in the pharmacy spend. Can you talk a little bit about how plan sponsors, you know, you've talked a lot about how they can manage GLP-1s or try to in the new world we're in previously. You know, what are you seeing right now? What are some of the strategies look like that have potential to work? Talk to us a little about these super inflationary drug classes.

[13:21] Bridget Mulvenna: Well, I'm going to give you my crystal ball prediction, which is today there are, I don't know, as many GLP-1s as there are in the market. More are coming and I don't see the price changing much. And so we're sort of going to be living in this land for the foreseeable future where the prices of these drugs are going to remain relatively stable as to where they are now.  

And some people might not think stable, some people might think stagnant, but we'll call it stable. There are decent rebates there. Make the best use of weight management programs. You know, the FDA guidelines basically state that it's favorable to have someone who is on a GLP-1 for weight loss also be engaged in the lifestyle management program. And the same for someone who is taking a GLP-1 for diabetes, right? It's very smart to have some sort of weight management program. I'm seeing large health systems have their own programs that are both mandatory and optional. Consider making these more optional so that there's no rebate impact, because you want to maximize the total value of your rebate, and you want to continue to evaluate whether or not covering GLP-1s for weight loss is providing the most benefit to your employees and to the plant. And make sure you're with a PBM that is going to employ the FDA guidelines rigorously, because you don't want - and I will stand by this forever, people can go out into the marketplace, there are still compounded GLP-1s available - let people who want to use it cosmetically or for off label indications use it that way because that has no cost to the plan. But if you're covering it as a plan, make sure that your PBM is following FDA guidelines and not approving GLP-1s for diabetes for people that don't have a diagnosis and don't have an appropriate A1C, and then not approving GLP-1s for weight loss unless the BMI meets the FDA guidelines. And those change sometimes. And so pay attention to what that is.

[15:24] Justin Venneri: What about precision formulary design? Like that's part of what we talk about with unified medical pharmacy claims. The potential to get to precision benefits essentially and precision payments for outcomes. So value-based contracts. I know I'm kind of bundling a couple things together there but share your thoughts on how you see that evolving.

[15:39] Bridget Mulvenna: Well, I think that what we're doing at Capital Rx - and again, I know we don't like to get too salesy here, but that is my job - what we're doing here at Capital Rx, by launching Judi Health™, which is basically Unified Claims Processing™, is the first step of a long journey to get the entire industry there. And it's a monumental, paradigm shifting change.

We'll see what adoption looks like over the next couple of years. I know we do have a couple of clients that are going to go live and we've already been servicing our own population. I think that that is going to assist plan sponsors in identifying common medications that are treating conditions. It's also going to help us see in real time how office visits lead to medication changes, and whether or not physicians are initiating certain types of therapies, be they generic drugs or biosimilar drugs, at the point of prescribing versus writing for those originator products because it's the name they can remember, and then letting that change once the PBM gets a hold of it because of some formulary driven strategy.  

And so I think that you can almost set up a formulary so that it automatically favors biosimilars. But we want to make sure that when we're making precision formulary decisions, we're not doing it in such a way that doesn't provide patients and physicians with adequate choice at the point of prescribing. Because again, another way to get to precision - and I know that you've had conversation on a prior podcast about this - is pharmacogenomics, which has been around for a while but has not really caught fire. I think if you combine the PGx, pharmacogenomics, with unified claims processing, you have an incredibly powerful combination to care for and treat patients at an N value of 1.

And that to me is what healthcare should be about. Healthcare is not about what works for every person like Justin, who is Justin's age, who is genetically male. Healthcare is about what is going to specifically work for Justin. And that to me is where we are going. It's where we've needed to be for a long time.  

You mentioned value-based contracts, and so I'll kind of tie that up a little bit. Value-based contracts are a very interesting trick and tool that pharma is using to tie outcomes to additional rebate revenue. And it is often not money that's being passed through to the PBM because it's paid so far in arrears. But also I question the ability for pharma to determine outcomes without unified claims processing and the data that that would provide.  

And so it's interesting to me how that's going to work over time, and I think it's something that we all need to watch and be aware of.

[18:38] Justin Venneri: All right, here we are. Last question. Bridget, thanks so much as always for sharing your thoughts with us. What would the most astonishing thing you've seen be related to our discussion today - biosimilars, rebates, et cetera - that's safe to share, of course. Always have compliance hats on. Tell us a good story to send us off.

[18:53] Bridget Mulvenna: Well, I'm still shocked and astonished when folks make a decision during the RFP process - after all of the fiduciary lawsuits, and all of the language in those contracts around the opacity and pricing, and the opacity and rebate reporting, and things like that - I'm still surprised when folks pick the offer that has the highest rebate, especially if they have done any procurements in the past.  

And in my experience, renegotiating those contracts with those big rebate offers was never favorable and none of the savings that was promised was ever realized because those contracts favored higher cost brands. And so hopefully that starts to change. And in a future session when we talk, I'll say I'm astonished by the fact that people are actually finally starting to make the right decisions.

[19:44] Justin Venneri: Sounds good. Well Bridget, thanks so much for taking the time today. I hope you have a great rest of your day.

[19:48] Bridget Mulvenna: Of course, you too, Justin. Thank you.

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