By Kayshap Patel
January 5, 2021 at 5:00 am ET
With all eyes focused on the rapid development of COVID-19 vaccines, each state is preparing its own herculean effort to get citizens vaccinated. Yet, as public health leaders prioritize distribution of the COVID-19 vaccine in 2021, there is also a role for state policymakers to play in creating a healthier population by improving access to other lifesaving, innovative medications.
While the myriad issues involved in distributing COVID-19 vaccines are largely based on availability and logistics, other innovative treatments for a range of chronic conditions and cancers aren’t getting to patients due to how pharmacy benefit managers — the middlemen of the pharmacy world — do business.
PBMs build drug formularies for insurers, defining what treatments will be covered and how. PBMs set the bar requiring complex prior authorization policies or mandating that patients first try and fail on other drugs before they can get the treatment preferred by their provider. Driving these decisions is often the profit that PBMs and insurers can make – leading to complex and sometimes contradictory policies determining what medicines are covered.
While PBMs often funnel patients into taking cheaper medications to save money for insurers, they also can prioritize more expensive drugs which fetch higher rebates from pharmaceutical manufacturers.
Biologics — innovative treatments made from living organisms — have yielded life-changing results for patients battling a range of chronic diseases including multiple sclerosis, arthritis and cancer, but their price tag has kept them out of reach for many Americans. By contrast, more affordable biosimilar medications, which are practically identical to biologics, hold the promise of expanding access to effective treatment.
However, the more affordable biosimilars often are not readily available to patients due to the rebate incentive and exclusionary formularies that tend to list biologics as preferred treatments.
Cancer patients are repeatedly affected by these exclusionary formularies. About 30 percent of available cancer drugs are either dispensed by clinicians or dispensed by PBMs, and the complex policies PBMs enact for patients to access lifesaving treatments create significant discrepancies in access to care across the country.
Furthermore, the PBM rebate structure limits formulary parity among state Medicaid and managed care organization health plans, leading to medical practices having to stock multiple biosimilars to meet the needs of both Medicaid and MCOs. This can result in inventory problems for smaller or rural clinics, which then send patients to hospital systems for treatment, which paradoxically raises costs when biosimilar use is meant to save costs.
Reforming the way PBMs operate will help increase access to more treatments and put more money back in the pockets of patients. In Georgia, for example, Gov. Brian Kemp recently signed legislation that allocated more oversight of PBMs to the insurance commissioner while also prohibiting PBMs from barring a cheaper version of a drug from insurance policy coverage. Additionally, the reform requires that PBMs pass any negotiated savings onto health care plans, thereby putting more savings into the pockets of patients.
Lastly, policymakers should establish a clearer path to interchangeability among biosimilars and biologics, in order to facilitate better uptake of the treatments and increase patient access to innovative medicines.
Biosimilars already save the national health care system roughly $240 billion every year, according to the Pacific Research Institute’s Center for Medical Economics and Innovation. And in North Carolina where I practice, the state could save up to could save up to $356.7 million with an increased use of biosimilars. Just imagine the nationwide cost savings we could provide if states stepped up to make biosimilars more available.
States have the power to enact policies to ensure that lifesaving innovative treatments are accessible to all patients without breaking the bank. Failing to reform PBMs and the perverse rebate incentives will only continue to limit access to life saving medications, like biosimilars, especially when more are approved and come to market. As new medications like the COVID-19 vaccines become accessible to all Americans, lawmakers should take lessons learned and apply them to making sure that all patients can access innovative therapies that support disease control and cost savings — two things which are especially important as we continue to navigate the COVID-19 pandemic.
Dr. Kayshap Patel, M.D., is the president of the Community Oncology Alliance, CEO of Carolina Blood and Cancer Care and associate editor of Evidence-Based Oncology.
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