Susan Larkin (00:01):
Healthcare is ever-changing and constantly evolving, but it’s also personal to every employer who offers health benefits to their employees and every member who needs coverage. IBX: The Cover Story from Independence Blue Cross is the podcast you need for timely, relevant conversations about the most critical topics in healthcare coverage. Join me, Susan Larkin, executive vice president and president of Core Commercial Markets at IBX, as we explore the big picture of healthcare and the topics that matter to you most. Let’s jump right in to IBX: The Cover Story.
Reetika Kumar (00:43):
Hello, everyone. This is Dr. Reetika Kumar, senior vice president and chief customer product, clinical solutions, and pharmacy services at Independence Blue Cross. Welcome to IBX: The Cover Story. For today’s episode, I’m excited to guest host a conversation on a topic I’m very passionate about and excited for, and it’s biosimilars. It’s no secret healthcare costs are on the rise and challenge everyone, from payers, to employers, to members, and for at least the past decade, specialty medications have truly driven those rising costs. Approval of generic medications, which are exact copies of a reference drug, delivered great cost reductions through intense competition starting in the seventies and the eighties. More recently, manufacturers have developed and brought to market similar low-cost competitors for more complex drugs, which are biologics, and these are called biosimilars. Like generics, biosimilars are as safe and as effective as their reference products, but due to the complexity of the drug are not the exact same because these are biologics, right? They are not chemicals. However, it’s the same mechanism of action, same quality, same effectiveness, but different name and most importantly, a much lower cost.
(02:02):
We are not new to biosimilars at IBX. We had a biosimilar strategy for over a decade now and generated close to 200 million in savings for our customers, both with insulins on the pharmacy side and with a number of biosimilars on the medical side. And today we’re going to focus on Humira. Humira came to market in 2002 with its first indication for rheumatoid arthritis, and over the years has had an expansion in number of indications where it’s probably the number one specialty drug spend with over 20 billion spent annually just in the United States, and actually a number one specialty drug spend even for us at IBX.
(02:42):
And we’re excited because over the last year and a half, we now have biosimilars that have been approved by the FDA for Humira, and this represents an opportunity for us to significantly reduce costs and deliver savings to our customers and our members. And I’m excited to share that as of January 1st, 2025, IBX is moving its members to a single preferred Humira biosimilar strategy. And here today we have two guests who can talk to us about how employers should be approaching biosimilars when it comes to their annual drug spend and how we are able to deliver this win for IBX clients and members in an innovative way. Please welcome Helen Sherman, Chief Transformation Officer at Evio, and Julie Bartl, President of Employee Benefits at Johnson, Kendall & Johnson, aka JKJ.
Helen Sherman (03:34):
Thank you for having me be a part of this.
Julie Bartl (03:36):
Thank you, Reetika. It’s very good to be here.
Reetika Kumar (03:38):
I am so excited to have you both here. I think this is going to be a fun conversation and hopefully a very informative one for anybody who is interested in hearing more about biosimilars. So Julie, I want to start with you. What are some things that you’ve heard from your employer groups when it comes to biosimilars, but more broadly, the potential avenues for reducing drug spend?
Julie Bartl (04:01):
Well, certainly prescription drug spending is the top of mind for most of the employer groups that we work with. When it comes to biosimilars, I think this is a new frontier and all of our employer groups are very keenly interested in learning more, but not only educating themselves, but also educating their employees and their members on the health plan that may be affected by a biosimilar introduction.
Reetika Kumar (04:27):
I think that’s such a important point because on the plan side, we can come out with strategies, but what we also need is belief in the strategy, comfort with knowing that it’s a safe strategy, and buy-in from the key stakeholders. While we work from a member and provider perspective, we so appreciate you all being those partners at the table from an employer perspective and then hence the employer with the employee. One of our biggest tools to bring down the cost of drugs is through our relationships, like I said, and through innovative partnerships, contracting and manufacturer negotiations. Helen, can you talk about who Evio is and what should an HR business partner think when they hear that IBX is working with Evio?
Helen Sherman (05:13):
Well, as your listeners may know, IBX is one of Evio’s owners, and we partner on many initiatives in the pharmacy space. Core to our pursuits is transforming pharmacy, and adding transparency and simplicity is important to do that. And our direct purchase arrangement with Fresenius Kabi for the biosimilar adalimumab minimizes cost and increases transparency. We’re uniquely positioned to execute this arrangement because of our independent makeup as well as the size and density of our customer markets, and that brought a unique opportunity to put together a relationship with Fresenius Kabi and IVC. Our contract with Fresenius Kabi was offered to all of our plans and IBX chose to participate, so we’re glad that IBX members will have a high quality, more affordable treatment option.
Reetika Kumar (06:14):
I can tell you as someone who’s been working on this strategy with the Evio team and with my internal team, it’s been exciting and it gives me hope that we can collectively challenge the status quo and come up with new ways of partnering, whether it’s with manufacturers directly to bring a lower cost of goods for our mutual customers and our members, and hence make access to care that much more affordable. Would you be able to share why we chose Fresenius Kabi per se, and what are the things that make this arrangement between IBX, Evio and then Fresenius Kabi, how does that arrangement help set us up for success per se in helping our members transition to the biosimilar of choice?
Helen Sherman (07:02):
So first of all, what’s coming under the pharmacy benefit for biosimilars is just completely landmark in the pharmaceutical space. So with that, it brings opportunities for new models. And what we’ve put together with Fresenius Kabi and IBX is a groundbreaking model that minimizes the number of intermediaries, brings the lowest cost to the member and the plan. And Fresenius Kabi was willing to do this type of a model. It’s a different type of arrangement than working through the usual distribution channels, but it is yielding significantly lower costs. And since we’ve stood this up, we’ll be able to replicate it with other biosimilars and non biosimilars potentially.
Reetika Kumar (07:47):
That’s great. And what I will share is IBX took a little while to come up with the Humira biosimilar strategy, and it wasn’t because we were not focused on it. We intentionally wanted it to play out for a bit and rather than sign ourselves up for the one or two that are available and that we give up our ability to bargain. And we’re going with the biosimilar only strategy in 2025 and with Fresenius Kabi is also, they’re a known German manufacturer. Right, Helen? You can keep me honest. And they’ve been in this space for a very long time. And a part of our concern was we don’t want to partner with someone where access may become an issue because of supply and demand challenges. And that’s another reason why we partnered with FK, because we know based on their track record and who they are that that will not be a concern.
(08:37):
And the first dose samples being made available at provider offices, the boots on the ground feel like will help us be more successful as well in assisting providers in shifting the member from Humira to the biosimilar, but also the zero dollar cost share was an intentional arrangement that we made that would make it where people would be more inclined to give the biosimilar a chance because it’s natural to be hesitant to move your treatment from a drug that you’ve been comfortable on, you feel like it’s helping you, to now a new drug, especially if you don’t understand the drugs are very similar and their mechanism action is very similar. So I’m really excited about that. I’m going to pivot to you, Julie. When it comes to the Humira biosimilars and the future of specialty drug costs, what is JKJ keeping an eye out for? What are the signs or indications that a payer like IBX is doing the right things on specialty drugs to deliver quality care and effectively manage costs? And I would say and how can we continue to be good partners to you?
Julie Bartl (09:43):
I think it’s such an important question, Reetika. So really when we’re working with our clients, we’re looking at five key components, the first of which is cost savings. So biosimilars are generally less expensive than the originator product. So Humira in this particular instance that we’re discussing today. This can reduce the out-of-pocket cost for our patients and overall healthcare spending. Also, competition among biosimilars will eventually lead to further price reductions over time. So that’s another really important piece of this rather complex puzzle. The other benefit that we look for is increased access. So similar to what you were all just talking about in terms on the manufacturing end, we’re looking to lower costs, make those more accessible for patients who maybe struggled in the past to afford Humira. And some insurance plans have different coverages for biosimilars, and those lead to fewer access barriers. So I think partnering with IBX and the bold move that you’re making in this particular area will lead to increased access and remove that barrier of cost.
(10:59):
The third thing we look at is equivalent efficacy and safety. We know that with your partner set that you’re working with, biosimilars are undergoing rigorous testing. They demonstrate that they’re effective and safe, just as safe as the original biologic. So the FDA requires extensive evidence to approve biosimilars, and we have a lot of confidence in the process that you’ve undergone. And maybe not being an early adopter works in your favor because now we have that confidence and we can share that confidence with our clients and they can ultimately share that confidence with their members. So multiple biosimilars being available, this gives us more treatment options. That’s very important. Patients, healthcare providers have more choices and that gives us all more flexibility and availability in their treatment protocols.
(11:54):
We’re big encouragers of innovation at JKJ. Some of the things that we really want to be a part of is encouraging education around these issues because it is complex and somebody that is not diagnosed with a condition that needs a biosimilar or a Humira but eventually could have that condition, we want to be able to teach them what is available in the market and how they can get the best treatment protocols. Those are all really important pieces of working with our clients and having positive outcomes.
Reetika Kumar (12:34):
And I will say, I will attest to how much effort you and your team put into the education piece of it and the collaboration because I’ve had the privilege of joining some of your sessions where you’re educating your clients, and I know that sort of is your north star where you want to make sure there’s health literacy, but fiscal health literacy, I’m now coining terms as we go, but it comes clear that that’s something you all take very seriously. And in all honesty, it helps us because you’re engaging a consumer that has trust in you in helping us be successful and moving that cost of goods while ensuring best outcomes for our mutual clients.
(13:16):
So I truly appreciate you both making the time today to talk about biosimilars. I think it’s really important topic today. It’s front in mind for all of our combined customers, and if we can try and simplify it, remove some of the myths around it, get people to be more comfortable with adopting the strategy, I think we’ll all have done our work here. But I want to ask each of you, I’ll go with you first, Helen, is there anything else that you’d want to share with our listeners before we close for today?
Helen Sherman (13:49):
No, I would just echo Julie’s comments about having confidence in biosimilars, the level of evaluation that goes on at the FDA, and feel comfortable that you’re getting a very high quality product at a significantly lower price.
Reetika Kumar (14:04):
Julie?
Julie Bartl (14:05):
Yes, I think the education really is essential. So not only does the member or the consumer have a responsibility to learn about what biosimilars are available to them, but also working with their provider very closely, and that providers are educated on the safety, efficacy, and the cost benefits of the biosimilars. Patients should be encouraged to ask questions, understand the biosimilars, that they’re not inferior products, they’re versions of biologics. They’re very thoroughly tested alternatives. I also think it’s very important to monitor responses. So if you were taking Humira and now you’re taking a biosimilar, it’s okay to keep track of that, talk to your provider about your outcomes and know that there will always be an alternative to revert back if that’s something that absolutely has to happen, although we don’t anticipate it. But just the ongoing collaboration between the payer, the pharmacy, the provider, and the member, I think are just going to be key in having these programs maintain their success over time.
Reetika Kumar (15:08):
Completely agree with both of you there, and thank you for that viewpoint. I truly believe that we’re all a part of an ecosystem that surrounds that human individual who has a condition that these drugs are going to treat, and how can we all collaboratively work together and have sort of a synergistic approach to make sure that there’s education, there’s comfort, there’s an ability to advocate, and we’re definitely here for that, partners with you at the table to advocate for our members and our customers. And clearly agree. I mean, some of the work we’re doing with Evio is around real-world evidence. So we’re all about collecting the data and seeing how people are responding because that only helps us get better. And not every human’s equal and the real-world evidence work tells us are there certain individuals that need something different, right? And with time, we develop policies around that. So thank you both for joining us today, and I want to thank our listeners. I hope you enjoyed our discussion. Please check out the show notes for more information at insights.ibx.com. And thank you again for joining us.
