Blue Shield Of California Sidesteps PBMs With New Humira Biosimilar Deal

Dive Brief:

• A major California health plan has struck a novel deal directly with a drug manufacturer for a cheaper version of Humira, cutting out pharmacy benefit managers — controversial middlemen in the drug supply chain that typically control access to medication — entirely.
• As a result of the deal, Blue Shield of California will purchase a Humira biosimilar for $525 per monthly dose, significantly below the drug’s net price of $2,100.
• The biosimilar will be available for most of BSCA’s commercial members at $0 co-pay starting Jan. 1, 2025, according to the insurer, which announced the deal Tuesday.

Dive Insight:

Blue Shield of California, or BSCA, is one of the largest health plans in America’s most populous state, with more than 4.8 million covered lives. It’s also proved more willing than others to take drastic action to lower drug costs, recently rolling out an unusual pharmacy benefits arrangement that chopped up functions normally performed by one PBM and divvying them up to multiple vendors instead. BSCA expects that arrangement to save hundreds of millions of dollars each year.

Now, BSCA is targeting AbbVie’s blockbuster drug Humira as its latest pathway to cut costs.

Humira, which treats a variety of inflammatory conditions like arthritis and Crohn’s disease, is one of the top-selling drugs ever — and a peak example of how medications can be lifesaving for patients while creating a crippling financial burden on the U.S. health system.

At a list price around $7,000 per dose, Humira has been massively lucrative for AbbVie. Since the Chicago-based drugmaker launched Humira more than two decades ago, AbbVie has brought in nearly $200 billion in sales through 2023, when Humira’s patent expired and the first copycat version of the injectable launched.

Currently, there are 10 Food and Drug Administration-approved biosimilars of Humira available at a significantly lower cost. However, the availability of alternatives has not significantly lowered Humira’s price.

BSCA spends well over $100 million annually on Humira, more than any other medication, according to a spokesperson for the insurer.

Biosimilars are often out of reach for payers and their members because of how PBMs craft formularies, or lists of covered drugs.

PBMs receive rebates from pharmaceutical manufacturers in exchange for placing their medications in a favorable position on the formulary. Generally, the pricier the drug, the larger the rebate. PBMs have been accused of prioritizing high-cost brand name drugs on their formularies — and hesitating to adopt biosimilars — as a result.

Switching all Humira patients to biosimilars would save the U.S. health system up to $6 billion — but PBMs would lose up an estimated 84% of their profits from the drug, according to life sciences consultancy Iqvia.

For its new biosimilar arrangement, BSCA negotiated directly with a subsidiary of German manufacturer Fresenius, with the help of Evio Pharmacy Solutions, a company owned by Blues plans including BSCA. As a result, BSCA can get a Humira biosimilar without the traditional markups created by PBMs, according to the insurer.

It’s the first time this type of model has been used to bring a Humira biosimilar to market, according to BSCA — and yields a much lower cost than both the brand-name version of the drug and its biologic copycats.

The $525 price tag for BSCA compares to $584 for a Humira biosimilar at Mark Cuban Cost Plus Drug Company, or about $1,300 for one produced by Cordavis, a manufacturing subsidiary of CVS, for example.

“We will no longer take part in a pharmacy system that is designed to maximize the profit of participants instead of the quality, convenience, and cost-effectiveness for consumers,” BSCA CEO Paul Markovich said in a statement.

BSCA is looking into applying this model to other pricey brand-name drugs, too. A number of widely prescribed drugs, including Merck’s Keytruda and Amgen’s Enbrel, will lose their patent protection in the next few years.

“This is just one of many biosimilars to come,” a BSCA spokesperson said.

Major PBMs — notably CVS’ Caremark, Cigna’s Express Scripts and UnitedHealth’s Optum Rx — have said they’re prioritizing biosimilar access amid rising criticism for their role in driving up U.S. drug costs.

Caremark, the largest PBM in the nation, launched Cordavis to produce and market biosimilars, and removed brand-name Humira from most of its major commercial formularies this spring.

Similarly, Express Scripts announced it would remove Humira from its largest commercial formulary in favor of multiple biosimilars this summer. The PBM also has a subsidiary that markets Humira biosimilars called Quallent Pharmaceuticals.

Optum Rx is also removing brand-name Humira from some of its preferred formularies in favor of a less expensive version starting in 2025.

Much of the concern swirling around PBMs stems from the vertical integration of the three largest players. Caremark, Express Scripts and Optum Rx are all owned by massive healthcare conglomerates that also include a national health insurer and pharmacy network.

Now, lawmakers are flagging additional worries about those PBMs stepping into the marketing of biosimilar and generic drugs.

On Tuesday, two top Senate Democrats asked the Federal Trade Commission to investigate PBMs’ co-manufacturing practices, arguing that CVS’ and Express Scripts’ manufacturing subsidiaries further widen their already significant control over the pharmaceutical supply chain.

The FTC sued the Big Three PBMs last month over anticompetitive concerns, including how PBMs’ rebating practices are allegedly driving up drug costs.