CVS Health Corp., the largest prescription benefits provider in the US, is still deciding on its approach to covering one of the world’s best-selling drugs, Humira, as a competing version is set to hit the market at the end of this month.
(Bloomberg) — CVS Health Corp., the largest prescription benefits provider in the US, is still deciding on its approach to covering one of the world’s best-selling drugs, Humira, as a competing version is set to hit the market at the end of this month.
The decision could have billion-dollar consequences for AbbVie Inc., maker of the anti-inflammatory injection. It will also affect rivals such as Amgen Inc. that aim to displace Humira with nearly identical drugs known as biosimilars.
CVS says it will make its decision based on what delivers the best cost to clients — but that’s a complicated calculation. Makers of brand-name medicines typically offer rebates and discounts to undercut the price savings from copycat drugs. Humira’s case is even more complicated because doctors and patients may be hesitant to switch to biosimilars.
“We just want to drive the lowest net cost in the category,” said Alan Lotvin, president of CVS Caremark, the company’s pharmacy-benefits division.
CVS will take into account the unit price of the drugs after any discounts or rebates, as well as projections for how many patients will switch therapies if biosimilars end up costing less, Lotvin said in an interview.
If a drug plan winds up paying a higher price for the original product because it adds a competing therapy, total costs could rise if few patients migrate to the less expensive choice, he said.
AbbVie, which received $20.7 billion in revenue from Humira in 2021, has vowed to ensure the drug remains accessible. Amgen’s Amjevita is set to launch in the US at the end of January. More biosimilars for Humira are expected later this year.
Drug Plans
CVS manages prescription benefits for more than 110 million people. Biosimilars are expected to boost the company’s earnings, Lotvin said.
Competing drug plans run by UnitedHealth Group Inc. and Cigna Corp. have said they’ll add biosimilars to their approved medication lists, called formularies, alongside Humira. They’ll all be treated the same way, meaning the companies will not incentivize patients to use one over the other.
Unlike generic versions of conventional oral medicines, biosimilars aren’t exact copies of the complex biologic drugs they’re meant to compete with. They may differ slightly in ingredients or how they’re administered. Humira, for example, is given by self-injection.
Whether biosimilars have devices that make them easy for patients to administer is one variable that can influence adoption, Lotvin said. Another consideration is whether the drugs contain the chemical citrate, which is linked to pain after the injection. Those details can influence whether patients and doctors will switch to alternatives, and they’re part of CVS’s assessment of the new options.
Pharmacy-benefit managers extract concessions from manufacturers in exchange for giving their drugs preferred placement on formularies, which can steer patients to certain medications and away from others. These incentives have sparked criticism, though drug plans say the savings are passed along to clients.
“We’re going to look for ways for biosimilar manufacturers to be successful and get a return on their investment while simultaneously reducing costs for our customers,” Lotvin said. “If no one is successful” selling alternatives to Humira, “that’s going to be a real challenge.”
CVS has several formularies for various types of prescription plans, and Lotvin said the company might adopt different strategies for biosimilars in different plans. That approach may change throughout 2023 and 2024.
“We’ll have lots of time for discussion, negotiation and decision-making,” he said.
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