CVS Caremark accelerates biosimilars adoption through formulary changes

Rhea-AI Summary

CVS Health (NYSE: CVS) announces the expansion of biosimilars adoption, removing Humira from major national commercial formularies and covering Humira biosimilars effective April 1, 2024. The U.S. biosimilars market is projected to grow from less than $10 billion in 2022 to more than $100 billion by 2029.

Insights

Market Research Analyst

The strategic move by CVS Caremark to prioritize biosimilars over Humira in its formularies is a significant shift in the pharmaceutical landscape. This decision reflects the growing confidence in biosimilars as cost-effective alternatives to biologic drugs. The projected growth of the biosimilars market in the U.S. from less than $10 billion to over $100 billion within seven years underscores the potential for substantial market disruption. For stakeholders, the short-term implications include adjustments in drug procurement strategies and potential shifts in market shares among pharmaceutical companies. Long-term, there could be a broader impact on healthcare costs and insurance premiums, potentially making treatments more accessible to patients.

The agreement between CVS Health and AbbVie to supply a co-branded Humira product through Cordavis is an example of innovative collaboration in the pharmaceutical industry. It demonstrates CVS's commitment to providing multiple options to payors and patients, which could lead to increased competition and further price reductions. The impact on AbbVie's financials and market position will depend on the volume of the committed supply and the market's acceptance of biosimilars.

Pharmaceutical Supply Chain Expert

CVS Caremark's decision to remove Humira from its major national commercial template formularies in favor of biosimilars marks a pivotal development in the pharmaceutical supply chain. This shift is likely to influence distribution dynamics, with biosimilar manufacturers gaining an edge in distribution agreements. The seamless transition plan for members, including proactive communication and education, is critical for ensuring continuity of care and minimizing disruptions in the treatment of autoimmune conditions. The efficiency of this transition will serve as a case study for future biosimilar integrations into formularies.

Furthermore, the anticipated cost savings of more than 50% on adalimumab for clients in 2024 compared to 2022 could lead to a reevaluation of budget allocations within healthcare providers and insurance companies. This cost reduction may also incentivize other players in the market to adopt similar strategies, thereby increasing the rate of biosimilar adoption industry-wide.

Healthcare Policy Analyst

The adoption of biosimilars in place of branded biologics like Humira aligns with broader healthcare policy goals of reducing drug costs and improving patient access to medications. The proactive approach by CVS Caremark in managing the transition, including the absence of a need for new prior authorization reviews, reflects an understanding of the administrative burdens often associated with healthcare delivery. By streamlining this process, CVS Caremark is setting a precedent that may influence future policy decisions and regulatory guidelines concerning biosimilar integration into the healthcare system.

The long-term benefits of this strategy potentially include a reduction in national healthcare expenditure on specialty drugs, which have been a significant driver of cost increases. This could lead to more sustainable healthcare models and potentially influence legislation aimed at curbing drug prices and expanding biosimilar adoption.

WOONSOCKET, R.I., Jan. 3, 2024 /PRNewswire/ -- Today CVS Caremark®, a CVS Health® (NYSE: CVS) company, announced the continuation of its efforts to expand adoption of biosimilars. Effective April 1, 2024, Humira® will be removed from our major national commercial template formularies and Humira biosimilars will be covered. Humira will continue to be an option for its customers with Choice and Standard Opt Out commercial formularies. Commercial formularies are the drug lists used by employers, unions and health plans for prescription drug coverage.

In much the same way that generic drugs are used as alternatives to branded drugs, biosimilars offer quality, safe, and effective treatment options that have no clinically meaningful difference from their reference products. A vibrant and competitive biosimilar market is essential to driving sustainable cost savings and options for consumers over the long term. The biosimilars market in the U.S. is projected to grow from less than $10 billion in 2022 to more than $100 billion by 2029.

"We are committed to accelerating the adoption of biosimilars and providing customer choice alongside a seamless member experience," said David Joyner, Executive Vice President, CVS Health and President of CVS Caremark. "Our customers want to have choices. By preferring biosimilars that have a significantly lower list price than their reference product, CVS Caremark is putting our customers in the driver's seat to best meet the health care needs of their members and lower drug costs."

The company also announced that AbbVie, as part of its continued commitment to access, has entered into an agreement to supply Cordavis, a CVS Health company, with a committed volume of co-branded Humira. This will provide another treatment option for adalimumab patients and aligns to the CVS Caremark focus on customer choice and seamless member experience. The Cordavis Humira product will be available in the second quarter. Cordavis Humira provides additional options for payors.

For members transitioning to a biosimilar, CVS Caremark will help ensure a seamless experience, including proactive member and prescriber notification of this change 60 days in advance, in addition to follow-up text message reminders and online education. CVS Caremark will meaningfully engage prescribers to guide them through appropriate next steps to help transition plan members. Because current Humira authorizations will be transitioned to the preferred biosimilar products, members and prescribers will not need to obtain a new prior authorization review with this product transition. 

Autoimmune conditions, such as those treated by Humira, have been one of the greatest contributors to specialty drug growth over the last decade. CVS Caremark is again leading the market by actively taking advantage of this historic biosimilar opportunity, potentially saving our clients more than 50% on adalimumab in 2024 vs. 2022 when Humira was the sole option.

About CVS Health
CVS Health® is the leading health solutions company, delivering care like no one else can. We reach more people and improve the health of communities across America through our local presence, digital channels and over 300,000 dedicated colleagues — including more than 40,000 physicians, pharmacists, nurses and nurse practitioners. Wherever and whenever people need us, we help them with their health — whether that's managing chronic diseases, staying compliant with their medications or accessing affordable health and wellness services in the most convenient ways. We help people navigate the health care system — and their personal health care — by improving access, lowering costs and being a trusted partner for every meaningful moment of health. And we do it all with heart, each and every day. Follow @CVSHealth on social media.

Media contact
Phil Blando
Phillip.Blando@CVSHealth.com

 

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SOURCE CVS Health

FAQ

What did CVS Health announce regarding biosimilars adoption?

CVS Health (NYSE: CVS) announced the expansion of biosimilars adoption, removing Humira from major national commercial formularies and covering Humira biosimilars effective April 1, 2024.

What is the projected growth of the U.S. biosimilars market?

The U.S. biosimilars market is projected to grow from less than $10 billion in 2022 to more than $100 billion by 2029.

How will CVS Caremark help ensure a seamless experience for members transitioning to biosimilars?

CVS Caremark will help ensure a seamless experience for members transitioning to biosimilars by providing proactive member and prescriber notification of the change 60 days in advance, follow-up text message reminders, and online education.

What is the significance of the biosimilar opportunity for CVS Caremark?

CVS Caremark is actively taking advantage of the historic biosimilar opportunity, potentially saving clients more than 50% on adalimumab in 2024 vs. 2022 when Humira was the sole option.