Zarxio Coverage On Par With Innovators Even Without Interchangeable Designation

Avalere survey suggests payers are comfortable with covering the biosimilar but not necessarily actively promoting it over Neupogen or other competing brands.

Which one is the biosimilar?

Nearly all US employer-sponsored health plans responding to a large survey reported they are covering Sandoz Inc.'s biosimilar Zarxio (filgrastim-sndz) and coverage is comparable to that of its reference drug, Amgen Inc's Neupogen, and other competitors.

Ninety-four percent of plans are covering the biosimilar, according to the survey, which was conducted by Avalere Health. The results show that after nearly two years on the market, Zarxio has gained broad acceptance among payers, even in the absence of an interchangeable designation.

With FDA developing its policies on interchangeability, the idea that a product can be widely accepted without the designation should be encouraging to sponsors, but the survey's finding that biosimilars won't necessarily get preferred formulary placement means that development decisions must be carefully considered.

Fielded in April, Avalere's study explores pharmacy benefit coverage for Zarxio and for Celltrion Inc.'s Inflectra (infliximab-dyyb), a biosimilar to Janssen Inc.'s Remicade. Zarxio and Inflectra are the only two biosimilars currently on the market. Avalere collected responses from 45 employer-sponsored health plans covering 183 million individuals.

Avalere also looked at formulary placement for the biosimilars versus competitors. Forty-two percent of plans are covering Zarxio on the preferred brand tier, about the same as the number covering competing drugs including Neupogen, Amgen's Neulasta (pegfilgrastim) and Teva Pharmaceutical Industries Ltd.'s Granix (tbo-filgrastim) as preferred brands (See chart.)

More plans cover Zarxio as a non-preferred brand than those covering competitors as non-preferred. But virtually the same number of plans are covering Zarxio and competitors on the specialty tier, which can involve high member cost sharing.

The findings show that plans are comfortable with covering Zarxio relative to innovators but indicates they are not yet aggressively promoting coverage of the biosimilar over innovators, Avalere Senior VP Policy and Strategy Caroline Pearson pointed out in an interview. There is "not much evidence" that plans are preferring biosimilars over competing brands, she noted.

Zarxio Formulary Tier Placement vs. Competitors In Employer-Sponsored Plans

Avalere Health Study

Inflectra Coverage Still Developing

Survey results for Inflectra should be viewed as preliminary because many payers are still sorting out coverage plans for the biosimilar, Pearson cautioned. Inflectra has only been on the market for about seven months, after launching in November 2016.

In addition, the survey focused on pharmacy benefit coverage and Inflectra is expected to be covered more often under the medical benefit, like Remicade. Zarxio can be self-injected so a significant amount of its coverage is expected to be through the pharmacy benefit.

As of April, Inflectra was being covered by 42% of respondents. Of those, 7% cover Inflectra as a preferred brand, 18% cover it as a non-preferred brand and 17% have placed Inflectra on the specialty tier.

In contrast, 36% of plans cover competitors to Inflectra as preferred on average – including, in addition to Remicade, AbbVie Inc.'s Humira (adalimumab), UCB Group's Cimzia (certolizumab), Bristol-Myers Squibb Co.'s Orencia (abatacept), Janssen's Simponi (golimumab) and Pfizer Inc.'s Xeljanz (tofacitinib).

Inflectra's competitors have non-preferred brand status in 28% of plans and 22% of plans cover the competitors as specialty drugs.

Inflectra Formulary Tier Placement vs. Competitors in Employer-Sponsored Plans

Avalere Health study

The study also explored what factors went into coverage decisions. Cost relative to the reference drug was a key element in determining coverage for 95% of respondents. US payers generally expect discounts of from 20% to 30% on biosimilars, according to recent research by Datamonitor Healthcare. (Also see "A Look At Payers' Early Game Plans For Driving Biosimilar Use" - Pink Sheet, 3 Apr, 2017.)

The efficacy and safety of the biosimilar were somewhat lower priorities in determining coverage, and were cited by 80% and 73% of plan representatives, respectively. About half of respondents indicated that existing contacts, such as product portfolio agreements, and cost relative to other biosimilars, are important for coverage decisions.