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Optum Rx

Pharmacy Insights Podcast

Listen to our resident experts discuss critical industry challenges and the solutions you need to control rising drug costs.

Hosted by Scott Draeger 

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Tackling industry challenges, one episode at a time

The pharmaceutical industry is constantly changing and it’s hard to stay on top of it. The Pharmacy Insights Podcast is here to help you stay current, diving deep into the complex topics that are challenging your pharmacy benefit plan and give you solutions to control your rising costs.

Join our host, Optum Rx Senior Vice President of Clinical Consulting, Scott Draeger, as he interviews our resident experts on pressing topics and the industry challenges every plan sponsor is facing.

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Scott Draeger: Savitha, let me begin with you. Last time we spoke we did a bit of a deep dive on biosimilars. Can you briefly recap what biosimilars are and why they're so important to the future of drug affordability?

Savitha Vivian: Nice to be back, Scott. I always like to start with what's a biologic. Biologics are drugs produced by living systems or organisms and because of this, they're very large and complex molecules or a mixture of molecules. The exact structures of these molecules aren't easily identified or characterized.

A biosimilar is a highly similar product to that existing FDA-approved biologic known as that reference product. A biosimilar has no clinically meaningful differences when compared to the reference biologic, but because of the nature of what a biologic is and the complexity of it, it is not an exact replica of the innovator or reference brand.

In contrast to that, you’ve got the non-biologic drugs. These are typically manufactured through chemical synthesis, meaning that we're combining specific chemical ingredients in an ordered process. Think of it similar to a very precise recipe. Generics of non-biologic drugs are approved by the FDA through an abbreviated new drug application, where that generic product demonstrates it's bioequivalent to the reference product. So, almost as close as possible, it’s an exact replica of that non-biologic.

Once approved, a generic can be automatically substituted for the brand by the pharmacist at the point of sale without a call to the prescriber. In contrast, biosimilars require a specific designation as being an interchangeable biosimilar to be eligible for that substitution pathway at the pharmacy without that prescriber or physician permission.

So, there are differences at the molecular level and how they're regulated by the FDA. However, the economics between a traditional generic and a biosimilar behave in similar fashions. As we get more biosimilars that enter the market, it increases competition leading to greater price pressures and savings for members and clients. This is what we've historically experienced with traditional medications and generics. That’s how the biosimilar market affords us a tremendous opportunity for providing quality care at lower costs, similar to what we see on the traditional side.

When we last talked, we were eagerly anticipating some of the most widely utilized specialty products in the United States today, such as Humira®, to become available as a biosimilar to really see some of these sizeable and impactful bottom-line savings that the biosimilars have potential to produce.

Scott: Savitha, as we sit here today, there are now multiple biosimilars for Humira available within the marketplace. How do you decide, in such a crowded market with all these different options, what your strategy is going to be?

Savitha: At Optum, we believe that PBMs have a responsibility to create value and choice for expensive specialty drugs like Humira. So, we developed a clear set of biosimilar guiding principles and followed them to determine our Humira biosimilar strategy. This included maintaining clinical quality of care, flexibility, and choice. It involved ensuring that we significantly improve our client's net cost in the category, ensure stability of supply from the selected manufacturers we evaluated, and then importantly, minimizing patient disruption.

Overall, we wanted to make sure that our strategy supported the advancement of biosimilar market over time and ensures that those savings delivered through biosimilar adoptions really freed up healthcare spend needed for future innovation.

Our decision was grounded by defined criteria. Like with all products, we assess the clinical attributes of the drug and also the product attributes to ensure that we maintained quality of care and provided choice for our members and providers. We evaluated manufacturer capabilities to ensure that supply was stable and that manufacturers were able to support patients in a similar manner to how the manufacturer of Humira is able to support Humira utilizers. Then, we also evaluated the competitive pricing so that we were able to get the lower net cost and net spend throughout the drug class.

Scott: Jamey, I want to take this opportunity to bring you into the discussion. With this recent wave of biosimilars, how is Optum Rx thinking about strategy?

Jamey Millar: Thanks, Scott. At a macro level, the core strategy was to leverage that large number of biosimilar entrants coming into the marketplace to deliver better value for clients and members. So, that really was the overall objective. But as Savitha laid out, we established right upfront some clear decision criterion guiding principles. So, it was the application of those to each of the options presented in the marketplace that led us to the decisions that we have made. Amjevita™, Amgen's biosimilar, was placed on our standard commercial formularies premium and select as of Feb. 1.

You noted the July additions. In July, we have added Boehringer Ingelheim's Cyltezo®, their biosimilar to Humira, as well as Sandoz's Hyrimoz® branded biosimilar to formularies, both premium and select in our commercial standard formularies. With that, we have the first available biosimilar in the marketplace with Amjevita, we have the first interchangeable designated biosimilar in the market with Cyltezo, and among the first high-concentration formulations of branded Humira that we wanted replicate in the biosimilar offering of Sandoz.

Again, we have the first available, first interchangeable, and among the first high-concentration formulations in the Sandoz product. So, we feel we've satisfied the guiding principles with this optionality that we've provided to prescribers, to clients, and to members.

Scott: When that first biosimilar for Humira hit, the manufacturer came to the market with a high-wholesale acquisition cost version and a low-wholesale acquisition cost version. In the industry, we often use the acronym WAC to describe the wholesale acquisition cost.

Two-part question here for you, Jamey. First, why would manufacturers come to market with a high-WAC and a low-WAC versions? Second, can you tell us how Optum Rx chose to manage these from a formulary perspective and why we did that?

Jamey: Yeah, great question. It's not an unprecedented move from manufacturers. For those that remember the introduction of Semglee®, a biosimilar to the basal insulin product, Lantus®, the manufacturer introduced both a high-WAC and a relatively low-WAC version of the product. Obviously, you see now in Amgen and Sandoz as well as several other players using a dual-pricing strategy.

Why do they do this? First, it's important to underscore that manufacturers alone determine the list price strategies for their products. In this case, those companies have decided that there is enough diversity of clients in the United States that’s there is a plurality of need. Therefore, they are bifurcating that need into customers or clients that want a high relative list price with a discount to the reference product and rebates to get to a competitive net price, versus those wanting a low list alternative in the absence of rebates or with minimal rebates still being net price competitive. I think that speaks to the plurality of benefit designs and client interests.

Certainly, across our client population, there are those that want that high relative list and the rebate value because they've built it into their budgets and forecasts. There are others maybe in predominantly high deductible plans, plans with predominant co-insurance, where they want the lowest list price available to them. Our choice, the second part of your question, how have we responded to manufacture pricing decisions, our response has been to enable choice, flexibility, and optionality. It's one of our key guiding principles.

PBMs are often criticized for dictating choice to their clients and members. We didn't want to do that. We wanted to offer choice, flexibility, optionality to our clients. With these agents that have the high and low list price products, we are placing both on formulary in a similar position to each other and to the reference product Humira. This enables clients to choose. They can cover one or the other, or they could cover both, the high list and the low list.

Scott: As Savitha mentioned earlier, with the advent of these biosimilars for Humira hitting the market, we are likely to see an exertion of downward price pressure within that therapeutic class. Jamey, can you talk a little bit about the impact we've seen on Humira spend overall and how you anticipate it impacting cost trend in the autoimmune class?

Jamey: I look at this in a couple different perspectives, Scott. One is for autoimmune and Humira specifically with the biosimilars, but then just the broader impact of this biosimilar introduction. Just to take a step back, Humira was the single largest pharmaceutical product in the history of the industry, 20 years roughly on the market without any competition in the form of biosimilars. A lot of these biosimilars that are launching now have had FDA approval since 2017, 2018. They've been unable to launch due to patent litigation and legal settlements with the branded manufacturer, AbbVie.

That’s why the market has anticipated some relief to the autoimmune and specifically the Humira cost trend for so long. I often ask manufacturers to imagine if every drug they had or were introducing was met at the same time by seven to 10 competitive products that are essentially clinically identical. What would that mean for price competition? You could just see their jaws drop. So, that's exactly what we have here. We've now got multiple biosimilar competitors coming to the market, putting pressure on what has been an unpressured brand for 20 years. Previously, with branded Humira you saw roughly an 7% annual list price increases every year, and obviously dominant market share.

In terms of client cost trend, the first thing that we've delivered and are really pleased about is better value on branded Humira. The presence of biosimilar competitors allowed us to leverage our strengths with AbbVie for better value on the brand. Then, we leverage the fact that there could be up to 10 biosimilars for Humira. You can see how that created competition right away. All of those [biosimilar] manufacturers, are asking themselves whether they want to be on the inside looking out or the outside looking in? That drove competitive pressures in the marketplace and enabled attractive pricing from the three biosimilar companies for the products that we have added to formulary.

That gives you a sense of the cost-per-unit relief that we expect. Now, the key thing that we haven't seen yet, that we hope builds momentum now with more on the market, is price times volume equals that net cost trend. We've delivered on the pricing, I believe, but to date, the adoption of the biosimilar to Humira in the form of Amjevita has really been underwhelming. So, we hope that more prescribers start to write for Cyltezo, for Hyrimoz, for Amjevita, and we start to see volume build because the volume component is the only way we're going to get cost relief.

The second way I think about this is because the autoimmune category historically has been one of the biggest drivers of trend, getting relief in this category frees up scarce healthcare resources for the next wave of innovation. We're seeing it with GLP-1s in weight loss, in Alzheimer's drugs. There are unmet needs in other categories, and right now, it really puts pressure on affordability. So, delivering cost relief in this autoimmune category, and specifically with Humira, frees up dollars that can be used for other innovations. That’s really important.

Scott: Jamey, let me just ask you to expand a little bit on what you said. You mentioned that the volume in terms of the uptake of the Amjevita, the Humira biosimilar, has been relatively low across the marketplace. What do you attribute that to and are you surprised?

Jamey: I think most analysts, most forecasters in this category expected a slow transition to the biosimilars. So, I don't think it's unexpected. That’s why our choice was to maintain branded Humira on formulary and add up to three biosimilars in a parity position. Humira as a brand is a very sticky brand. There's a lot of brand loyalists, both from a prescriber and a patient perspective.

Some of the non-clinically relevant features of the early biosimilar entrants weren't exactly the same as the brand and I think that may have given some prescribers pause. I think having multiple biosims on the market now, with multiple companies behind their promotion and building awareness, will help build more momentum and move more and more new and potentially existing patients on Humira over to the biosimilar alternatives.

Scott: Cost is just really one consideration when we look at this overall class. Savitha, from the plan sponsor perspective, what else should they bear in mind as they consider their options?

Savitha: A great question, and I think Jamey hit the nail on the head when he was discussing utilization and volume. How do we determine what is important in making sure that biosimilars get the uptake in utilization that will deliver on the cost savings that we all are expecting from this market event?

With regards to the biosimilar options, in addition to cost, the product attributes or feature are an important consideration. This includes the device features, the concentration of the drug, whether the product contains citrate or not. These attributes don't impact the efficacy or the clinical viability of the product, but they can potentially be reasons for member disruption or impacts to continuity of care.

This can be mitigated with the availability of biosimilars that most closely resemble Humira in terms of product features. There are also manufacturer and pharmacy patient support programs to continue to encourage utilization and adherence to these drugs. With our decision to add Cyltezo and Hyrimoz, we are now offering products that have the high concentration. This is the primary utilization in Humira. Up to about 80% of current Humira utilizers are on high concentration. So, by making a high concentration product available on the formulary creates that pathway to transition to the biosimilar with minimal disruption.

Another thing that plan sponsor should consider is prescriber habits or provider habits and their comfort level with biosimilars. This is a critical barrier to adoption. There's been an increase in prescriber education, which has led to confidence through experience in using biosimilars in new to therapy patients.

However, we still see some hesitations in switching patients who are stable on an existing therapy. This really comes to fruition in complex disease states like rheumatoid arthritis. So, what we need is data that shows no additional risk when switching therapies in these stable patients, especially in these hard-to-control chronic conditions. That's really what's needed to boost confidence.

I think our choice in adding Cyltezo to our formulary helps alleviate these concerns by providing the first interchangeable biosimilar. Interchangeability is designated when the manufacturer conducts additional switch studies showing no changes in clinical efficacy. So, I think addressing both member concerns and provider concerns should be top of mind as plan sponsors are considering their options.


[H2] What to expect in 2024 and beyond for biosimilars

Scott: Lastly, Jamey, let's look ahead. If 2023 is a big year for biosimilar options for Humira, what can we expect in 2024 and beyond?

Jamey: Well, first of all, I would underscore that even though we've named the two additional biosimilars to formulary in July, this is not a static environment. It's very dynamic. We'll continue to monitor the marketplace, the uptake, the barriers to broader biosimilar adoption.

I'll also say that maybe this will prompt another podcast down the road, Scott. But we still have some strategic maneuvers that we have built in terms of optionality. So, more to come there. We'll monitor the marketplace in 2024 and look to update our strategy accordingly.

I think what's exciting though is that this really is the first of several pharmacy benefit biosimilar introductions in the US. With Stelara being probably our second largest, certainly, top five products in terms of spend across our formulary, it will face a biosimilar competition. I think we've developed a template or a roadmap for biosimilars that we can use for future launches. We are already gearing up for the next one coming right down the road. So, I look forward to that.

Scott: Jamey, given the interest in biosimilars, we're likely going to take you up on that offer for another podcast. So, thank you. Jamey and Savitha, what fantastic insights. I greatly appreciate your time today.

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Scott Draeger: Welcome to the Optum Rx Pharmacy Insights Podcast. In this forum, we'll discuss the latest and most impactful events in pharmacy benefit management. Today's episode will focus on transparency and the market forces driving the pharmaceutical industry. Today I’m joined by Jon Mahrt, President and Chief Operating Officer of Optum Rx.

Jon, let's begin from a foundational perspective. Can you talk a little bit about what Optum Rx does from a core business standpoint?

Jon Mahrt: Sure. Great place to start. Optum Rx is a comprehensive pharmacy care management and pharmacy care services company. We serve constituents across the health care ecosystem. I'll focus on the core of our business, pharmacy benefit manager or PBM, serving essentially employers, health plans, labor groups, those folks who are looking to provide health benefits.

For them, we provide full pharmacy benefit management, from plan design all the way through administration and clinical programming. We help them to manage and administer the pharmacy benefit and stretch that health care dollar for their constituents as far as they can.

We also have a very robust portfolio of consumer or patient-facing services as well under the Optum Rx umbrella. We have our integrated pharmacies, with a nationwide footprint of 700 Genoa pharmacies. We have our home delivery and specialty pharmacies, as well as infusion pharmacies and rare and orphan disease pharmacies.

Essentially, the way to think about it is that we have a pharmacy solution for virtually every pharmacy need that a patient might have. And then, of course, our direct-to-consumer offering through the Optum Store. So we have a robust and growing direct-to-consumer business, featuring a full array of pharmacy-oriented and pharmacy-related health care products.

Scott: Jon, it seems that increasingly pharmacy benefit managers and pharmacy pricing are coming up more and more in the mainstream media. What are the forces you think that are driving this?

Jon: Sure. Well, you're right. It’s in the mainstream media. It’s certainly popular on Capitol Hill and the policymaking fronts right now. The same things are on our mind as well, affordability. That is top of the list, right? Providing affordable access to prescription drugs. And when affordability becomes an issue, it hits a lot of radars.

When you peel back the layers there's perhaps a historical lack of transparency in the PBM space. How does pricing work? How does money get from the pocket of the consumer or the plan sponsor to pharma and what happens in the middle? But behind that, it really boils down to affordable access to prescription drugs and putting this front and center.

Scott: Jon, that term, I heard you mention transparency. From an employer standpoint, what does transparency mean in the pharmacy pricing space?

Jon: Yes, I love that question, Scott. It's one that we talk about frequently and really have done a lot of work to understand and to ensure that when we use the word transparency, we can look eyeball-to-eyeball with any one of our employer clients, any client, and ensure that we're saying the same thing and that we're attacking it the same way.

I think transparency starts with trust. Then, it's how do you bring that trust to life? For us, transparency starts with full visibility to drug pricing.

We've been in the market with pass-through pricing options, bringing full visibility to how that drug pricing works and how the modeling is done. And then it's what I call the “flow of money” visibility. As rebates are paid by pharma, it's being able to be very transparent and demonstrate that the dollar is making it back to that client, to that employer.

We've attacked this a number of ways. We were first to market with PreCheck MyScript. Now, more than 90% of prescribers across the country have access. What that says is, "hey, when you're in the prescriber's office, you see a price, it's going to match the price that you pay at the pharmacy counter.” It allows the physician to have a discussion on pricing while the patient is in their office.

Then late last year we went into the market with our new pricing models for our clients. What these allow our clients to do is to choose a fully pass-through, very predictable pricing model that gives them complete transparency and predictability.

And then in January of this year, we launched Price Edge. And Price Edge is our consumer-facing tool that allows members to — at their fingertips — ensure that they're always getting the lowest available price, whether on or off the pharmacy benefit. And so already this year we have more than a million members enrolled. We've saved them more than $4.5 million. We have another 90 clients going live as we speak, and an aggressive, pretty ambitious roadmap behind this. We'll soon see Price Edge 2.0 in the market with additional capabilities.

Scott: Jon, some of those transparency examples you gave from a pricing perspective make a lot of sense. What other types of transparency are your clients asking for from Optum Rx?

Jon: Clients don't see the entire scope of how drug prices are negotiated. What they want is for us to come forward and talk to them about how the full system works. So, at the top, we provide our clients with full transparency on how formulary decisions are made, showing them that we are putting the lowest-net-cost drug on the formulary and showing them the math, showing them the spreadsheet. That has really, really resonated with our clients.

Second is visibility into how both pharma contracting and drug procurement work. That's a bit of a mystery to most of our clients. I like to bring our clients to the table and we walk through how pharma contracting gets done. What are the elements involved in pharma contracting? How does drug procurement get done? And, ultimately, how is a drug price determined? Our willingness to show them that is also really resonating.

There’s also reporting. Our clients want very granular reporting. Being willing to say, "Hey, I will show you that reporting down to the patient level, down to the NDC level, down to the individual drug level,” is really resonating with our clients.

Then there’s modeling. They want to know as they make certain decisions, what will be the impact on their spend. So, it's not that we're pushing toward a point of view, we're educating our clients and then providing models for how it will impact their spend.

Then, finally, behind all of that are the most comprehensive audit rights in the industry. This allows us to provide a full flow of money visibility from pharma through a group purchasing organization, which is headquartered in the U.S., with pharma contracts that are on U.S. paper all the way through the PBM and to the client. And so, it's that comprehensive suite of transparent business practices that resonate with our clients.

Scott: Jon, it seems that the only thing that is constant in the health care industry is change. Historically, as you look back, how has Optum Rx contracted from a pricing standpoint with plan sponsors in the past? And how is that changing now given these new pricing models that you referenced earlier?

Jon: The good news for us is we've always provided traditional options and then pass-through options. We've really made it a client choice.

What's changed now is the education, the resources, the visibility, and the modeling that we're providing behind that. And now we're providing additional options. Late last year, again, we took an industry-leading position on this and launched our Cost Made Clear models and included in those models a pass-through model. So, what we pay the pharmacy, what we reimburse the pharmacy, is what you as the client pay. It increases transparency, lowers ingredient costs for our plan sponsors.

And then we included another, which is a Cost Clarity model. And what Cost Clarity does is leverage a reference price or a cost baseline. In this case, it's NADAC, which stands for the National Average Drug Acquisition Cost. This is a wholesale acquisition cost to establish a kind of reference price or a baseline price that clients can use for some level of predictability.

And so, these models then serve to lower ingredient costs; they align incentives for us. It's really about how effectively we negotiate our agreements. But I think what our clients most appreciate is that they have the option; they have choice now. And as they have that choice, they can choose the transparent option that works for them. They get all of that value with a very simple admin fee. It becomes very easy to explain.

Scott: So, Jon, you mentioned the admin fee. If I were a client, I would ask, “What does that admin fee get me?” Can you talk a little bit about the value that that admin fee provides back to a client or a plan sponsor?

Jon: Your very first question to me was our core business. I explained a little bit about what a PBM or a pharmacy benefit manager does. When you think about the thousands of Optum Rx team members, there's a lot of work that goes on.

For example, there’s a fully independent pharmacy and therapeutics committee with physicians from across the industry, vetting all of the drugs that are in the market, choosing the most efficacious drugs, making sure we have formularies that meet every patient's needs. So, there's a lot of work that goes into formulary design.

Then you have formulary administration, managing. There are new drugs coming to market, drugs pulled off the market. Of course, once you have the formulary going, you need to negotiate with pharma. We have a very large industry relations team that does just that.

Then there's procuring the drug and the benefit plan design. We need to understand the choices that are available and which clinical programs we should deploy based on very unique population needs of each client. Maybe it's putting a diabetes program in place or deploying one of our behavioral health programs or our opioid program. So, there's a vast array of clinical programs designed to address the specific needs of a population.

Of course, you also have the day-to-day operations. This is the member care and customer service, all the benefits administration and changes made throughout the year. All of that work rolls into an admin fee that is now very simple, easy to understand and predictable.

Scott: Jon, Optum Rx has always been active on the innovation front. This certainly is not the first innovation from Optum Rx aimed at evolving and transforming the PBM model. Can you really take a few minutes and explain to us how this fits into the broader scope of Optum Rx initiatives?

Jon: So, I'll go back to where I started and your questions about what is driving scrutiny, what gets attention. It’s access, affordability and transparency. Our focus throughout the year and the investments we make are placed in the advancement of those three imperatives. Access, affordability and transparency.

When you evaluate some of the work, it's innovation and really market leading positions that allow us to drive each of these. So, I'll give a couple of examples.

There is biosimilars. We were first to market with an industry-leading biosimilar position. Our biosimilar position was innovative, it had provided choice in the class, and we allow our clients to put the low-list-price biosimilar on the formulary as well. It’s just a really different way of thinking and a really different way of leaning in.

Scott, your team has done some great work with the critical drug affordability list. This is something that I'm especially passionate about. And so that says, hey, we're going to look across these life-sustaining drugs and we're going to work with each client to provide the affordability needed such that these critical drugs can be provided at $0 or reduced copays.

I mentioned Price Edge earlier. I'll back up before that to when we launched PreCheck MyScript several years ago. PreCheck MyScript was new and innovative, and we were told it'll take us 10 years to get this pushed out into the market. Well, in just a few years we're at 90% of the market now on that tool. And physicians want more and physicians want to see cost to plan.

But now layer in Price Edge. Just two years ago, we were told that if we implement something like this, you'll break the PBM. Now it's our hottest offering in the market because it provides a solution for both transparency and for affordability. We're removing those barriers.

So, there's a vast assortment of ways we're tackling the hardest problems in pharmacy right now. Take management of specialty drugs. We have a robust portfolio of specialty management solutions under the Specialty Fusion umbrella that are delivering material savings for our clients north of $15 PMPM. That’s really resonating and also one of our hottest products right now.

Now we are deep into the development of obesity management solutions. We recently hosted pharma for a couple of days of working sessions. The goal was really getting deep into how we are going to lower the list price of these expensive new obesity drugs. And then, when those drugs are prescribed and dispensed, how are we going to make sure that they're effective? So, we want to combine those weight loss medications with programming around utilization management and behavior modification programming to ensure that the client is getting the most bang for the buck as well as the healthiest employee or plan member that's possible.

Scott: Jon, I want to thank you for taking time today to discuss some of the exciting things you and your colleagues are working on at Optum Rx. So, thanks again and really appreciate your time.

Jon: Thanks for having me, Scott. We're having a lot of fun and sincerely appreciate the time today.

Scott: Thanks for listening to the Pharmacy Insights Podcast. I'm your host, Scott Drager. Tune in again for more discussions as we examine the most important issues in pharmacy care services.

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Scott Draeger: Welcome to the Optum Rx Pharmacy Insights Podcast. In this forum, we'll discuss the latest and most impactful events in pharmacy benefit management. Today's episode will focus on obesity, some of the new breakthrough treatments we’re seeing enter the marketplace, and potential solutions to manage the disease appropriately. Today, I’m joined by Dr. AnaBhatnagar, Associate Chief Medical Officer of Optum Rx, and Dr. Travis Baughn, Vice President of Clinical Solutions. Welcome, Ana and Travis. I appreciate you both joining us, today.

Ana, let me start with you. I've noticed that in much of the pharmaceutical direct-to-consumer advertising, the line between diabetes and obesity treatments really seems to blur. How are these two conditions related, and why does it seem that we hear so much more about both conditions lately?

Dr. Ana Bhatnagar: That's a great question. Both diabetes and obesity are metabolic conditions, and one reason we are hearing more about them is because there are some new therapies that were originally used for diabetes that are now being studied and approved for use in weight loss.

Type 2 diabetes is the most common form of diabetes in adults. It's a chronic disease, and high blood sugar levels are the hallmark. More than 80% of cases of Type 2 diabetes can be attributed to obesity. Obesity is also chronic condition in which individuals have a weight that is higher than what is considered healthy for their height. There's evidence that certain individuals have a predisposition to obesity, and the underlying mechanisms within the body, their genetic makeup and environmental factors, all contribute to a tendency to gain weight. Also, certain medications or medical conditions can also lead to obesity. What's interesting is that 30% of overweight individuals have diabetes. So not everyone who's obese has diabetes, but they do have a higher risk.

Scott: Ana, you mentioned that diabetes is a chronic condition. I think most people understand that. Should we think of obesity in the same way?

Ana: We can consider chronicity of both conditions because there are demonstrated worse health outcomes if they are left untreated. For diabetics that are overweight or obese, weight loss can improve their control and their outcomes overall as far as heart disease and other adverse outcomes. And for those with obesity, we know they have a higher risk for diabetes, heart disease and sleep apnea related to having a higher BMI.

Scott: So, Ana, in your opinion, why has obesity been so difficult to treat traditionally?

Ana: Like any chronic condition, Scott, the approach to treatment must be multi-pronged and have a focus on improved health overall.

The processes within the body that lead to obesity are still being researched, but the human body is designed to store energy and have a positive energy balance. For that reason, it’s difficult to sustain a highly calorie-restricted diet for a long time and achieve weight loss.

The most successful interventions for weight loss have a goal both to maintain the decrease in weight and an adherence to change in lifestyle as well. There've been many weight loss treatments available in the past, with some have up to 11% weight loss benefit, but these newer agents that we've alluded to have a greater efficacy because they have a greater response rate than the previous agents. That means more individuals taking them are likely to lose weight.

Scott: Travis, let's switch gears here a little bit and talk a little bit more about your area of specialty, medications. There's been much talk in the lay press about new “wonder drugs” for the treatment of obesity. What has specifically changed in how we treat this condition with pharmaceuticals? And in your opinion, are these new medications actually better?

Dr. Travis Baughn: Thanks, Scott. That's a great question. The drug landscape has really evolved quickly as of late.

Before these GLP-1 medications were approved for weight loss, we had a variety of marginally effective medications that were primarily only used short term. These medications, such as phentermine and diethylpropion, are appetite suppressants and come with concerning adverse effects and incredibly variable outcomes.

Over time, we had continued innovation in the obesity medication space. We had a couple of combination drugs approved such as Contrave® and Qsymia® that combined existing FDA-approved molecules together. These medications were impressive and showed weight loss benefit. So, there was excitement around our ability to treat obesity effectively. It was these agents that really paved the way for continued pharmacologic innovation.

Now, enter the GLP-1s. Over the past decade, they came aboard as an innovation in treating diabetes. The profound impact seen on creating weight loss was in some ways unexpected. In essence, it was through the clinical trials for these drugs to treat diabetes that the large effect of creating weight loss was first realized. In the trials, GLP-1 drugs produced double-digit percentage weight loss without dramatic adverse effects.

Moreover, later this year, we are likely to see results from a monumental clinical study, the Phase 3 Select Trial. When completed, that will answer the key question of whether there is a meaningful positive cardiovascular outcome effect for obese individuals taking a GLP-1 for weight loss. We’ll have to wait until we get the results of that trial, but there's an expectation in the industry that this connection between GLP-1s and cardiovascular health protection will be confirmed.

To me, this is the “wonder drug” mentality. You would have one drug effectively creating weight loss but also being statistically proven to improve cardiovascular health. So, yes, these drugs are in some ways better, but they come with a hefty price tag and a ton of hype as well.

The question we need to evaluate deeper is do these drugs produce a sustainable weight loss outcome and how does that cardiovascular protection improve patient health in the long term? And at the root of it all is how can we manage the cost and get the price lower so the health care ecosystem can treat all patients who could benefit from these medications?

Scott: Given this intersection between obesity and diabetes, it makes sense, at least on the surface, why there would be an intersection in terms of the medications used to treat both conditions. Can you give some specifics on how these GLP-1s work in the body and how we think it's leading to the weight loss?

Travis: Absolutely. The mechanism of action of GLP-1s is really unique. The “GLP” in GLP-1 stands for glucagon-like peptide. It's a hormone in the body that's critical in managing appetite and managing your insulin and glucagon levels. It also plays a huge role in stomach emptying or the feeling of being full of food in your stomach.

So, these GLP-1 agonists in essence mimic these hormones in the body. When you take the medication, it creates an effect of the patient being able to better regulate their food intake and also better manage insulin and glucagon levels after meals.

The current obesity-approved GLP-1s are all injectable, with the newer agents being once-weekly injections. Thus, one injection a week creates a meaningful impact on reducing food intake. Just to note, there is one oral diabetes GLP-1. It’s likely to also eventually be available with a weight loss indication. I fully anticipate we will start to see other oral GLP-1s for weight management in the pipeline over time.

Scott: Travis, how much weight loss do these new GLP-1s medications typically achieve in patients? And, and how does that compare to some of the older pharmaceuticals you referenced a little bit earlier on in terms of their treatment of weight loss?

Travis: As you’d expect when looking across multiple drugs, the results vary a bit, but with every new approval of a GLP-1 for weight loss, the results get better and better.

For the original obesity-approved GLP-1, Saxenda®, weight loss is around 5% to 6% on average. For Wegovy®, we see about 14% to 15%. Tirzepatide, currently approved for treatment of diabetes under the brand name Mounjaro™, may be approved with outcomes exceeding 20% weight loss.

I think one thing that sometimes gets glossed over, though, is how fast this can happen. Current studies vary product by product, but with tirzepatide, for example, patients can exceed 10% weight loss in as quickly as 20 weeks. It takes another year or so for the weight loss to fully plateau, but 10% in 5 months is impressive.

The older treatments I mentioned earlier were squarely in the mid to maybe upper single digit effectiveness. Discontinuation rates were very high, and motivation was low due to adverse effects, and the ability to sustain the weight loss was questionable at best. These agents are far superior to the old treatments in nearly every way, but again — expensive.

Scott: I mentioned earlier that this line between diabetes and weight loss has really blurred. For example, you have a medication like Ozempic, which is a heavily advertised GLP-1 medication used in the treatment of diabetes. There have been reports in the lay press that physicians have been using this treatment to aid in weight loss as well. You mentioned the weight loss-specific medication that came to the market in the past year called Wegovy. My understanding is that both Ozempic and Wegovy are the same drug chemically. Can these two medications be used interchangeably for weight loss?

Travis: Ozempic and Wegovy are both branded semaglutide products. However, they are different strengths — studied and tailored to their respective indications. So, despite being nearly identical pharmacologically, they are not able to simply be interchanged.

I think that some of the press coverage and general conversation that blurs the line between the two is just a reflection of the fact that Ozempic was first to market. The bottom line is that prescribers should be prescribing Ozempic for diabetic patients for treatment of diabetes and Wegovy for non-diabetic patients for treatment of obesity. Obviously, you shouldn’t be on both at the same time.

Scott: So, I think the question that consumers especially want to know is how much do these new GLP-1s medications for weight loss typically cost?

Travis: They're not cheap. The net price of these medications on average hover between $800 to 900 per month. That puts the total cost around $10,000 annually. Keep in mind, the older weight loss drugs I referenced earlier were less than 10% of that cost.

Given this dramatic difference in cost, it really underpins the need to think creatively about management here. We need to get the cost down.

Scott: Ana, from your perspective, do you believe that these new drugs are safe? What type of side effects do patients typically see when using these types of medications?

Ana: As Travis noted, we've been using GLP-1s for many years in the diabetes space. So, we have some years under our belt with these chemical entities being used, and they have a pretty good safety profile.

However, since the drugs work by slowing down stomach emptying as mechanism of action, some of the common side effects we see are nausea, constipation and abdominal discomfort. Also, there is a risk for certain individuals with a predisposition for hereditary cancers.

Scott: Ana, with some of the older weight loss medications, the rate of recidivism, that is the tendency to gain the weight back, is rather high. How sustainable is the weight loss with these GLP-1 medications?

Ana: So that’s a question that remains to be answered. The evidence behind the GLP-1 medications is exciting, but there’s an absence of long-term studies.

We need more research on the long-term outcomes like sustainable weight loss. That said, some individuals may benefit from short-term use to lose enough weight to derive a clinically meaningful benefit. We’ve seen that even a 5% weight loss can improve diabetes control and other health outcomes.

Scott: Travis, you oversee clinical solution development at Optum Rx. As you look at how to address obesity across the populations that you serve, what are the critical elements and how do you plan to incorporate them into a solution?

Travis: I really think of this from two lenses: the patient and payer.

For the patient, we’ve got to absolutely respect the fact that all patients are unique with obesity. An obesity journey can be very different patient by patient, and response to therapy can vary drastically as well. This need to personalize both the potential qualification for treatment, as well as personalize the support delivered to the patient to achieve behavioral change that drives that weight loss is at the foundation of the solution we are developing.

One huge concern that many have with these medications is duration of therapy and durability of the achieved weight loss. Patients will lose weight. Will they keep the weight off? Only if they adopt the healthy behaviors that allow them to sustain the weight loss. There of course may be patients who stay on the medication long term, but not everyone will. How can we support members transitioning off the medication?

From the payer lens, the fact is these drugs are expensive. These drugs are expensive, and everyone wants them — regardless of if they are even clinically overweight or obese. Also, not all patients have the same motivation, and motivation is key for success. Our solution needs to solve for these areas: managing access, managing cost and ensuring motivation and behavioral change through enforcing required program participation.

This will be a solution that pulls together several components to help plans manage their weight loss drug costs, help members achieve their weight loss, and ensure sustained weight loss long term to improve their overall health.

Scott: Ana, I want to conclude with this. What type of things would you recommend patients consider before asking their physician about treatments for obesity, and how will they know it's the right time to see their physician?

Ana: Scott, I think we've pulled this thread through our entire conversation here, is that the goal of treatment of any chronic condition, even obesity, is really to support overall health outcomes and quality of life. So, that decision will be individual to each patient.

While these newer medications have brought this conversation to the forefront, there are multiple options that can lead to weight loss and ultimately support improved overall health and quality of life. Health benefits are seen with the weight loss as little as 5% of body weight. Patients should discuss weight loss and the options available to them based on their weight loss goals and need to manage other conditions.

Scott: Thanks for listening to the Pharmacy Insights Podcast. I'm your host, Scott Drager. Tune in again for more discussions as we examine the most important issues in pharmacy care services. 

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Scott Draeger: Welcome to the Optum Rx Pharmacy Insights Podcast. In this forum, we'll discuss the latest and most impactful events in pharmacy benefit management. Today's episode will focus on alternative funding vendors and the type of risks these companies may present for payers and members alike. I'm your host, Scott Drager. Today I'm joined by Mike Einodshofer, Chief Pharmacy Officer at Optum Rx. Welcome to the podcast, Mike. 

Michael Einodshofer:

Thanks, Scott. It's great to be here again.

Scott: Mike, we've been fortunate enough to have you join the podcast before. For the audience members who maybe haven’t heard any of our previous episodes, can you share with us a little bit about your professional background and what you're ultimately responsible for at Optum Rx? 

Michael: Certainly Scott. So, I'm a pharmacist. I started my career in retail and hospital practice. I currently serve as the chief pharmacy officer with Optum Rx. So, my role at Optum Rx is really to focus on how do we keep pharmacy benefits affordable and sustainable for plan sponsors, and assure that members who need access to drugs, especially focused on high cost specialty drugs that members who need them have a way to afford them? And have a way to have the best chance possible for them to succeed on their therapy. 

Scott: All right. Thank you for that, Mike. Let's really start from the beginning. What is an alternative funding vendor and when did they start to pop up? Is this a relatively new phenomenon? 

Michael: Yeah, so it's a really fascinating, this is a bit of a complex topic. So, I think before I can even get into what an alternate funding vendor is, I think we need to level set on how drugs are paid for today in the United States. And if you think about it, most people are covered for drugs under one of three ways. You're either in a Medicaid program, a Medicare program, or employer sponsored health care, which is what we call commercial sector funding. A lot of people listening to the podcast probably have their health care benefits through their employer, and within those health care benefits is a pharmacy benefit. The pharmacy benefit then is when you go to the pharmacy counter, and you give the pharmacist your ID card. They're billing a claim through the PBM for that drug coverage. 

Now, on the other end of that transaction, there's an employer and most employers of medium to large size are actually the ones that are ultimately paying the bill for that prescription. Some employers, especially small ones, they'll do what's called fully insured benefit, which means they'll pay a premium to an insurance company. Their risk or their cost to provide that benefit to their employees is fixed because they're paying the insurance company premium. And the insurance company takes the risk for what claims happen over the course of a year within that benefit. But again, like I said, for most mid and large size clients, they're what's called self-insured. So that if you go to the pharmacy and get a drug, your employer ends up getting a bill for that drug and they end up paying ultimately through the PBM, the pharmacy, for that drug. 

And in that case, the PBM is hired to administer the benefits, coordinate the formulary, help facilitate the exchange of payments between the employer and the pharmacy, and a million other things. But the important thing to remember is at the end of the day, the employer is the one that's paying the bill. So, what I just walked through, like Medicaid, Medicare, and commercial, there's a very important segment. About 8% of people don't have any insurance. And for that 8% of the United States population, we're making good progress. I mean, just a few years ago in 2016, it was 9%. Now, 6 years later, we're down, we're down to 8%. Still 8% is a pretty big number of the United States population that is uninsured. And that doesn't even begin to touch the number of patients that are functionally underinsured. 

So, what pharmaceutical manufacturers have done especially those that bring to market expensive specialty therapies, treating very serious, complex conditions like rheumatoid arthritis, cystic fibrosis, et cetera, they work with charitable organizations. There's lots of charitable organizations in the marketplace today. Pharmaceutical manufacturers will work with those organizations and sometimes very specific organizations to make sure that when a member or a patient or someone out there in the community doesn't have insurance for a drug, they have access to a charitable program that provides coverage for that drug for the patient. And so, they work with these charitable organizations. They set up eligibility criteria that determine a patient doesn't have insurance coverage. And then the charitable organization, which many times gets its funding from pharmaceutical manufacturers and others – manufacturers are a key source of funds for these charitable organizations – they end up then covering the drug for the patient that doesn't have insurance. So that's a very long background to get to your question.

What's an alternate funding vendor? It's in the practice of administering benefits for employers, municipalities, unions today, the PBM, who PBM serve in the commercial sector. Over the last few years, there's been a crop up of different organizations that are going to employers and pitching them the ability for them to change or manipulate their pharmacy coverage so that the benefits they offer their employees don't cover certain specialty drugs because those specialty drugs have a charitable organization that the member may have eligibility for. That way the employer doesn't have to pay for the drug. So, this is obviously just a moral concern that we have because essentially what's happening is we have individuals sensing a business opportunity to tap into charitable funds that are intended for underinsured and uninsured patients in the United States, and then commercializing it, and then packaging it to an employer with a promise to lower their specialty drug costs without the employer, in my opinion, understanding how those programs ultimately work in the marketplace. 

Scott: So, Mike, the pharmaceutical manufacturers provide some type of dollars to charities to help patients who don't have insurance coverage subsidize the cost of the drug. Do pharmaceutical manufacturers know that these third-party vendors exist, these alternative funding vendors exist? And if they do know what's their reaction to all of this? 

Michael: It's changing. So, a couple years ago when these programs first started to make a name for themselves, it really started with smaller employers. Manufacturers were, from what I could tell, weren't aware of these happening. And the charitable organizations, they're being, presented these consulting organizations I mentioned, right? They're representing the patients. The patients are forced to sign a release that allows these vendors to go represent them on their behalf. They apply for the charitable funds. And frankly, when the charitable organizations, when this was being done at small volumes, they simply wouldn't have been able to tell the difference between a patient that doesn't have any drug coverage versus a patient whose drug coverage has been selectively manipulated to make it appear that they don't have drug coverage for this particular drug. 

I would say since the programs have increased in their popularity, manufacturers are now becoming aware of the phenomenon, and many of them are asking themselves, how can we properly structure our policies and procedures around charitable eligibility so that we make sure that patients who truly need this sort of financial assistance have access to it?

Scott: Mike, can you provide some context for our listeners and how commonly are these types of vendors utilized by employers today? Any idea? 

Michael: There’s a good report from Pharmaceutical Strategies Group or PSG. About 8% of plan sponsors use an alternate funding program, today. The concerning thing is in their survey, in their latest annual report, they report about 31% of employers are considering one of these programs. Now, I'd say within those numbers, there's probably alternate funding might mean different things to different people that are responding to the numbers. But the numbers line up with what I'm seeing in practice too. I mean, how many times I get questions about this now from clients as opposed to a few years ago, it is markedly more in demand today. 

These programs are hitting a tipping point where manufacturers are paying attention now because the proliferation of these vendors that are popping up, there's some 20 now vendors that are in the market trying to sell this type of service. I think that we're at a point where awareness is getting very high and if we don't find a fair solution – and 31% of employers actually do adopt these programs – ultimately that jeopardizes the charitable funds that are available in the marketplace for patients that truly need them. And let's face it, it ultimately puts pressure on drug pricing as manufacturers start to scramble to see how they can continue to fund charitable organizations while at the same time meeting all their other financial obligations. 

Scott: Any idea how these alternative funding vendors are enumerated for their services? 

Michael: Well, there's some public information out there. Adam Fein has done some really good work on drug channels.net on an article that he put out about a month ago called The Shady Business of Specialty Carve Outs. I'd highly encourage anybody to go to drug channels.net and take a read. I think he did a really good job of exposing a number of practices that these programs do and then AIS Health or, MMIT more recently, a couple weeks ago, they had a nice article also. So, according to both of those sources, these consultants or vendors are taking 20 to 25% of the charitable funding that they collect in lieu of the payer having to pay for the drug. They are then billing the employer 20 to 25% of that theoretical cost that the employer would've otherwise experienced. So that's a lot of money. Just to frame that up, if it’s a hundred thousand dollar drug, let's say – and that’s not uncommon for some newer cancer agents – if it's a hundred thousand dollar drug and 25% of that charitable funding would go to the vendor that's a $25,000 payment to the vendor.

Scott: Mike, you talked about the, the ethical questions obviously here. Are there any other risks that an employer would have to think about either for themselves or for their members? 

Michael: Yeah, from the legal counsel that I've spoken with – and I'm certainly not an attorney; this is not legal advice – but I'd highly encourage any employer considering a program to do a lot of diligence on this because there is a concern a lot of these charitable organizations have means testing for the program, which means that based upon certain income levels you may or may not qualify for the program. And there's some concern from a compliance standpoint that that raises, that should be thoroughly understood. And that's kind of just scratching the surface, Scott, but again, I'd advise a very thorough legal counsel review prior to anybody considering one of these programs. 

Scott: Mike can you talk a little bit about the patient experiences? What is a patient experience whenever one of these alternative funding venders are part of the equation?

Michael: That’s one of the most important questions, Scott. Thank you for asking it. I’m concerned with it a great deal. Were adding another layer of significant complexity to a patient getting on a drug, oftentimes, that time is of the essence to get on it. Think about a newly diagnosed cancer patient who now has to go through an entirely other administrative layer of which they have no knowledge of how it works. That has to coordinate between the specialty pharmacy, the physician. The patient might have to provide financial information, tax documents in order to qualify for this program. It adds a tremendous amount of stress and uncertainty into the patient experience. I’ve seen it delay access to the initial fill byseveral weeks. There’s stories out there in the marketplace that are a lot worse.

Scott: Great. Mike, I really enjoyed our conversation. Thank you very much for spending some time with us today. 

Michael: You're welcome, Scott. Thank you.

Scott: Thanks for listening to the Pharmacy Insights Podcast. I'm your host, Scott Drager. Tune in again for more discussions as we examine the most important issues in pharmacy care services.

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Scott Draeger: Welcome to the Optum Rx Pharmacy Insights podcast. In this forum, we'll discuss the latest and most impactful events in pharmacy benefit management. Today's episode will focus on biosimilars and their impact on overall pharmacy spend. I'm your host, Scott Draeger. Today I'm joined by Savitha Vivian, Senior Vice President of Formulary Management and Strategy at Optum Rx. Welcome to the podcast Savitha. 

Savitha Vivian: Thanks, Scott. It's a pleasure to be here. 

Scott: The pleasure is all ours. Can you share with us a little bit about your professional background and what you're ultimately responsible for at Optum Rx? 

Savitha: Sure. So, I'm a pharmacist by training and have over 20 years of experience in managed care, specifically pharmacy benefits management. And most of my experience within the pharmacy benefit management arena has been within clinical services. So, I've been responsible for activities such as pharmacy and therapeutics committee processes, pipeline drug surveillance, as well as utilization management and development. And currently I'm responsible for formulary management and strategy at Optum Rx. 

Scott: Great. Thank you for that. Let’s begin from more of a foundational perspective. What are biosimilar medications, and should we think about these medications in the same way we think about traditional generic drugs? 

Savitha: So, before we get to biosimilars and what generics are, I just want to spend just a few minutes just talking about what a biologic is, because that may not be apparent to everyone. So, biologics are a type of drug that's produced by a living system or organism. And because of this, they're very large. They're complex molecules, and sometimes even a mixture of molecules. And because of this complexity, their exact structures are not easily identified or characterized. And so, in contrast, non-biological drugs, sometimes we refer to them as traditional drugs, they are typically manufactured through chemical synthesis, which means that's made by combining specific chemical ingredients in an ordered process. Think of it as a kind of a precise recipe. So, every time you follow the recipe, you end up with the same exact chemical. So, when you have a generic of these traditional molecules because you know exactly how those molecules are made, the generic is an exact copy of that non-biologic drug. Biosimilars, on the other hand, are a highly similar version of the existing FDA approved biologic known as the reference product. So, although a biosimilar might not be the exact molecular structure we're confident through clinical studies and evaluation that the biosimilar has no clinically meaningful difference when compared to that reference biologic. 

Scott: How long have biosimilars been available in the marketplace? 

Savitha: So, biosimilars first came to the market in Europe and in the US, biosimilars came into the market in back in 2015 and are becoming well established and accelerating across multiple therapeutic areas. Today, the FDA has approved 30 biosimilars of which 21 have actually launched into market. 

Scott: So, when you look at that, that traditional side of medications that you mentioned before, at least for most brand products, they can be substituted by a pharmacist for that equivalent generic product, without the physician's permission. Is that the case with biosimilars as well? 

Savitha: Well, the reason that a traditional generic product can be substituted is that the generics of non-biologic drugs are approved by the FDA through a process called an abbreviated new drug application, where the generic product has to demonstrate that it is bio equivalent or exactly the same in behavior in the body to that reference brand. Once approved by the FDA through this pathway, generics have the ability to be automatically substituted for the brand by the pharmacist at the point of dispensing without a call to the prescriber for a new script. Biosimilars on the other hand, because they're not the exact same – they're highly similar – they require a specific designation by the FDA as an interchangeable biosimilar to be eligible for that substitution ability at the pharmacy without the physician's permission. 

Scott: Savitha, for our listeners, can you give us some examples of biosimilars that are maybe on the market today and maybe what conditions these products treat? 

Savitha: Yeah, so the majority of the biosimilars that are available on the market today fall under the medical benefit because of the type of conditions that they treat. So, what we have available today primarily is focusing on oncology. So, we have biosimilars for the reference brand called Herceptin. We have biosimilars for oncology supportive care, so things like anemia due to chemotherapy. There’s a drug called Neupogen®, and there's biosimilars available for that. And then there are biosimilars for Remicade®, which is an infusible immunology drug for rheumatoid arthritis. However, we're starting to shift from the medical benefit to the pharmacy benefit. And an example of this is the most recent that's been introduced for insulin, which is called Lantus. 

Scott: It seems that over the last year, especially, the discussions around biosimilars have seemed to reach a new level of intensity. From my perspective, much of this has been driven by the emergence of biosimilar alternatives within the chronic inflammatory class of medications – specifically drugs used to treat conditions like rheumatoid arthritis or psoriasis. What types of biosimilar alternatives can patients expect to see over the next year or so for medications that treat these conditions? 

Savitha: In the next year or two, we're going to see most widely utilized specialty products in the U.S. becoming available as a biosimilar. And this really enables a much more sizeable and impactful bottom line savings because these agents are used much more frequently and in a chronic manner compared to some of the biosimilars that I just went over. 

So Humira®, as you know, is one of the most anticipated launches because it's one of the top utilized specialty drugs and a trend driver for many payers. Other significant launches we're going to see within the next year or two for other immunology products such as Actemra and Stelara®, which address some of the conditions that you talked about – rheumatoid arthritis, psoriasis – and we're also going to see additional launches with regards to biosimilars in the insulin space, specifically NovaLog®.

Scott: Savitha, I heard you reference savings a few minutes ago. How do you expect these options to be priced, at least in comparison to their brand counterparts? 

Savitha: So, it's going to vary from drug to drug. It's going to depend on how many biosimilars are going to be made available or enter the market for a given reference brand. The more competition, the greater opportunity to drive down cost. 

Scott: You talked about interchangeability a few minutes ago. Specifically, when you're talking about this market event around Humira®, will all of the Humira® biosimilar alternatives be granted at interchangeability status? 

Savitha: Short answer, no. This is dependent on whether the manufacturer is going to conduct the appropriate studies that demonstrate switching from reference brand to biosimilar and back to the reference brand has no meaningful impact on, on efficacy. The manufacturers then have to submit the data to the FDA, and then the FDA has to grant that specific interchangeability status. So, for Humira®, there are 7 approved biosimilars that were anticipating launch at various time points next year. Of these one has been granted that interchangeability status, one I know is pending approval, and a couple more are conducting the necessary studies to then submit to the FDA to get approval for that interchangeability status. 

Scott: You talked about the fact that at least with the biosimilars here that are going to come out early 2023, at least from comparatively speaking, the utilization here is much higher than some of the other biosimilars are in the marketplace, today. How receptive do you think physicians and ultimately members will be to biosimilar alternatives? 

Savitha: The prescribers and members, comfort level, is a critical barrier to the adoption of biosimilars. If we think back a couple of decades ago when generics for traditional meds became a prevalent occurrence, or when they first started coming to the market, it took a lot of education by the pharmacist, by the health plan, by the PBM to increase that comfort level that generics are an exact copy of the traditional medication or the reference brand, and that there should be no issues in terms of differences in safety or efficacy. Similar education has to occur here in the biosimilar landscape, as well. And there has been an increase in education for both the prescriber and members. And we've seen that this has led to confidence in using biosimilars in new to therapy patients. However, there's still some hesitation in switching patients who are stable on therapy and especially in complex disease states like rheumatoid arthritis or even oncology. And we really need that data that shows that there's no additional risk with switching therapies in a stable patient, especially in these hard to control chronic conditions. This is what's needed, I think, to boost member and provider confidence. Some of this data is available. We’re looking to the European experience and utilizing real world evidence to help instill that comfort in both members and providers. 

Scott: Do you think payers will dramatically alter how they encourage the use of biosimilars, at least compared to how they encourage use of lower cost medications today? 

Savitha: I think payers are looking for lowest net cost, and whether that's through the innovator brand with discounts or whether that's through a lower cost biosimilar, at the end of the day, they're looking to see how they can reduce their bottom line costs. And so, what we're seeing is that sometimes through the launch of new biosimilars, we're seeing sometimes based on that net cost it's the biosimilar that gets formulary placement and other times it's the innovator brand, depending on the cost that's negotiated for those brands. 

Scott: Savitha, as you look out over the next 10 years, what does the pipeline for biosimilars look like? 

Savitha: Well, the good news is the biosimilar pipeline is robust and it continues to grow. If it's any evidence of what's happened in the past 7 years, the number of biosimilar products and development has increased on an average of about 12% per year, and has more than doubled during this timeframe. So, I think the future holds huge opportunities for better cost and value and upcoming biosimilars for chronic conditions such as RA, such as Humira® that's coming next year, along with others present a great opportunity to impact chronic conditions that present the burden to a broad patient population and the health care system overall. 

Scott: Savitha, I really enjoyed our conversation. Thank you very much for spending some time with us today. 

Savitha: Thanks Scott. 

Scott: Thanks for listening to the Pharmacy Insights Podcast. I'm your host, Scott Drager. Tune in again for more discussions as we examine the most important issues in pharmacy care services.

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Scott Draeger: Welcome to the Optum Rx Pharmacy Insights Podcast. In this forum, we'll discuss the latest and most impactful events in pharmacy benefit management with a focus on the emerging solutions needed to control costs and ensure quality of care. I'm your host Scott Drager. Today I'm joined by Mike Einodshofer, Chief Pharmacy Officer at Optum Rx.

Mike, can you share with us a little bit about your professional background and exactly what a chief pharmacy officer is responsible for?

Michael Einodshofer: Oh, sure. Thanks, Scott. And thanks for having me today. So, I've been in health care about 25 years as a pharmacist, across a lot of different aspects within the industry. I started as a retail pharmacist working with a large chain down in Winston Salem in North Carolina, after graduating from the University of Pittsburgh Pharmacy School. After a few years of doing that, I decided I wanted to go back to graduate school. 

So, I pursued a business degree, came out and worked for a health system, actually a regional hospital, for a period of time. And so, my first, 6 years of my career were in direct pharmacy practice in retail and in hospital settings.  I then worked within a health plan called UPMC Health Plan in Western Pennsylvania, which was a great experience over a number of years I spent there, which is where I really started to learn how health insurance benefits work. I started to really understand specialty pharmacy and began my career after about 6 years at UPMC at Walgreens Specialty Pharmacy, which was one of the largest specialty pharmacies in the country. I spent a number of years at Walgreens Specialty Pharmacy in a leadership role, a number of years after that at a private equity backed, mid-tier company, a health care services company. And then about a year ago, I joined Optum as a chief pharmacy officer. 

So, what does the chief pharmacy officer do? Well, I’m incredibly proud of the work that all of our 15,000 pharmacists and other clinicians across the enterprise due to promote pharmacy, both coverage and care for our patients. We cover about 60 million plus lives within the United States across many different lines of business, including commercial, Medicare, and Medicaid. And then we have a large segment of our business, which is what we call commercial. These are largely employers, local municipalities, unions, all groups that come to us to help them provide a pharmacy benefit to their employees and their beneficiaries. My job is to help all of those constituents, whether it's Medicare, Medicaid, but especially the commercial plan sponsors, to understand the types of pharmacy programs that are available and what would work best for their members therapy.

Scott: Mike, as you look back at your career, 25 plus years in the industry, what do you see as the biggest changes within the profession since you first started?

Michael: Oh, wow. You know, it's very different now. When I started, a lot of drugs were mainstream primary care disease, drugs, right? If you've been around long enough, you remember the purple pill, right? You remember Lipitor. These were drugs that treated esophageal reflux disease and high cholesterol, right? And they were very heavily direct marketed at consumers. There were commercials. And they treated diseases that affected a large swath of the population. Those diseases haven't gone away, but what's happened is in the last decade or so for the majority of primary care diseases with maybe diabetes as a small exception, which still has some brand drugs, a lot of the drugs in this category have gone generic and become much, much, much more affordable than when they were branded.

But that's how the system's designed to work. Pharmaceutical manufacturers have a window of time where they can be the sole main sole producer of the drug in the United States. And then after that time, multiple manufacturers come into the market. The patent no longer applies, and you see the price typically drop precipitously over time as more manufacturers enter the market. So, the biggest thing that I see different, Scott, is that you have many of the primary care diseases like high cholesterol and esophageal reflux disease, you see those drugs now very, very affordable for most patients. But you see specialty drugs, right? Drugs that treat very rare conditions like cystic fibrosis, those didn't exist 20 some years ago, and now they are the fastest growing segment of pharmacy. And this creates a couple of changes.

Number one, it's an immense improvement to the human condition. These drugs are treating conditions now that otherwise had a tremendous amount of despair or even were fatal in many cases, way beyond a normal lifespan. Now, they’ve become chronic diseases. And so, that's a great testament to the science behind all these developments, but they also treat small populations and are therefore very expensive. And so, the big change here is how do the benefits evolve so that members and patients that need these high cost therapies can afford them, right? 

Because a lot of these are biologic and a lot of them are relatively new to the market, which means, you won't have that sort of competition that'll come years down the road. And so, we need to make sure that the benefits are designed in a way that plans can afford them, their benefits and members can afford them, when they need access to them.

Scott: Early on, you also talked about treatment of chronic conditions and how the marketplace has evolved with the induction of more and more generic medications. Are there generics available for specialty medications? And does that help blunt these high prices that consumers are seeing?

Michael: Yeah. There absolutely is, Scott. And so, the main diseases in specialty, it's oncology or cancer, it's cystic fibrosis, it's rheumatoid arthritis, it's multiple sclerosis. And then there's lots of other, very rare genetic diseases that have really, really, really small patient populations. By and large, the ones I just walked through, the top four, cancer, CF, rheumatoid arthritis, multiple sclerosis, they all have generics in them. And there's other inflammatory conditions besides rheumatoid like psoriasis and psoriatic arthritis, which all kind of get lumped together in a general category of inflammatory diseases. They all have some version of generics. I'd say the biggest development on the horizon and the one that doesn't have generics is rheumatoid arthritis. And that's because that category is largely biologic in nature, which means it's not a typical drug that treats those.

Most of the drugs in the inflammatory space are injectable. And they're actually complex molecules that are made not off a conveyor belt, but they're made in these big bioreactors. They actually use a biological mechanism to manufacture the drug. And so, traditional generics, both from regulatory and from manufacturing point of view, that is different. In the biologic space, you have, what's called a biosimilar. Biosimilars in the United States started to emerge several years ago. Most of the drugs, however, to date are on the medical side. So, they're infused products. Starting in February of next year, it'll be a very big event because the world's largest drug, which treats inflammatory conditions like psoriasis, rheumatoid arthritis and Crohn's, a drug called Humira®, will start to face biosimilar competition.

And this is a really important development for the entire industry, because it'll now introduce direct competition for Humira®. And as we know, and as we've seen across not just in the biosimilar space, but just in general, competition increases as more competitors enter the marketplace and prices tend to decrease over time. And we're very optimistic that as that biosimilar market for Humira® develops early next year, that we’ll start to see some much-needed cost competition emerging within the inflammatory space.

Scott: Mike you mentioned rheumatoid arthritis and specifically Humira®. For our listeners, can you provide some context? What would a typical payer today pay for a prescription of Humira®?

Michael: Well, I don't want to maybe highlight any one particular drug, but, in general specialty drugs can range anywhere from a few thousand dollars to upwards of a hundred thousand dollars or more per prescription. The average specialty patients can ballpark it around $50,000 a year, but again, there's some that can span into the millions.

Scott: So Mike, how do consumers afford these medications?

Michael: That's a great question. This is one of the most hotly debated topics that you see in the political circles today. And it's a really, really, really important topic I want to spend some time on. We really need to focus on how healthy is the insurance benefit designs within the marketplace that we all participate in? Not just the cost of the drug. A lot of the research out there supports over $3 billion for a true novel new therapy to make it to the marketplace. So, the answer isn't just, “well, the drugs should be cheap” because then you'd have no innovation in the marketplace.  

Where we have to look is how do we access affordable programs for members and patients that need these drugs? If you have a $10,000 drug, which is roughly the price of an oral oncology, an oral cancer medication, if it's $10,000 and you cut the price by 80%, it's still not affordable to most U.S. citizens. And so, again, back to the answer, we have to look beyond just the drug cost. And yes, PBMs wake up every day to hold manufacturers accountable for affordability of the medications they bring to the marketplace. That's one of the main jobs that we do, and we do a really good job at it, but at the same time, we have to find solutions within the coverage side and protect patients from what we call financial toxicity. So, they can get the drugs that they need.

Scott: Mike, you outlined some of the challenges from the patient perspective. What about the payer perspective, the clients that you talk to day in, day out, what type of strategies are available to those in those entities and what do they need to think about or what should they take into account when adopting these strategies?

Michael: Yeah. That’s a great question. So first, it’s not even about specialty. The first thing I speak to an employer about is what does their non-specialty coverage look like? Cause what we find, Scott, is most employers that we talk to are concerned about specialty because it's grown 8 times more than the non-specialty side over the past 13 years. The traditional side of drug costs has risen largely in line with inflation, especially costs have risen significantly higher than that, about eightfold higher. So, of course now about 50% of the employer spend is on specialty drugs. But again, as I said earlier, that 50% is coming from 1 to 2% of the population. So, employers are rightfully a little concerned around what's the long-term view on being able to afford this type of benefit.

The answer is first look at your non-specialty side because we still see employers that will cover just certain medications – acne creams that cost thousands of dollars each that have the same ingredients in alternative formulations that are very, very, very affordable, like down in the $10, $20, $30 range. So, number one is let's address all of what we consider to be the waste within the benefit today. And that frees up some additional funds that are then available for the more expensive therapies. Then, when you look at specialty, it’s looking over the long term and you have to keep two things in mind. One is we want to make sure that every patient that has a medical need for one of these drugs has access to it – to do that and keep it affordable for the employer. We have to find affordability solutions. Number one, of course, is a medical necessity process, unto itself, recognizing that not all physicians practice against the same best practices and within the medical literature and FDA approvals. So, that's where the prior authorization process comes into place – just to make sure that patients that are prescribed these high cost therapies wouldn't be better matched with a different, or even no therapy at all in the case that sometimes we find a serious drug interaction that makes the therapy that doctor wants to prescribe not medically appropriate for the patient's particular individual situation.

The third thing is to look at things like how do we find other affordability solutions that lower the overall cost through the benefit design? You want to have that ability. You'll hear the term rebate thrown around, right? And essentially all a rebate represents is the PBMs’ ability to talk to a manufacturer and have the manufacturer provide a discount for that particular drug when it's approved for a patient. This is what drives substantial affordability for our plan sponsors because absent that solution, manufacturers would be able to charge whatever they want in the marketplace. There'd be very little control over the medical necessity requirements to access a particular therapy, and cost would rise significantly because of both of those things, because again, manufacturers would not have this checks and balances process that PBMs have in the marketplace that require them to not only show evidence of how their product is going to work, but also negotiate with us on the price in exchange for their position within our formulary. If two drugs are available in the marketplace and they both are clinically doing the exact same thing, we will negotiate with each manufacturer to number one establish a relationship with the one that we feel is the most affordable option for most patients, always knowing, Scott, that there's an exception process that exists when a patient can't benefit from the drug that benefits the most.

That's why we have a very robust exceptions process. We take very seriously to make sure that those individual patients' needs are accommodated also.

Scott: Mike I really enjoyed our conversation. Thank you very much for spending some time with us today.

Michael: Thank you, Scott.

Narrator: Thanks for listening to the Pharmacy Insights Podcast. I'm your host, Scott Drager. Tune in again for more discussions as we examine the most important issues in pharmacy care services.

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