Blue Cross Blue Shield has already started examining another specialty autoimmune drug, Stelara, for possible change in coverage when it gets a biosimilar competitor in 2025, said Chief Pharmacy Officer Atheer Kaddis. He expects Blue Cross Blue Shield to launch a biosimilar strategy for Stelara in early 2025.
While the insurer may make exceptions for certain high-cost specialty drugs, its future goal is to move coverage whenever a biosimilar drug becomes available, Kaddis said. The strategy echoes a practice several years ago when health insurers started directing members to lower-cost generic medications.
“We automatically embrace biosimilars as the alternative to brand-name drugs,” he said. “There’s a lot of them in the pipeline where we’re going see more and more biosimilar competitors. That’s why you’re going to see more and more biosimilar adoption by not just Blue Cross Blue Shield in Michigan, but our competitors will do the same. That’s because we’re all trying to drive toward lower net costs for our members and for our customers.”
Blue Cross Blue Shield similarly altered coverage in 2019 for the immunosuppressive medication Remicade. The health insurer was able to move more than 90% of Remicade prescriptions to a lower-cost biosimilar, Kaddis said.
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Over the last few years, health insurers have cited the high cost of specialty drugs as a major driver in raising the premiums employers pay. In Michigan’s small group health insurance market for companies with 50 or fewer employees, premiums will increase in 2025 by a statewide average of 11.3%.
State regulators recently approved an average 11.5% premium increase for Blue Cross Blue Shield and 11.6% for HMO subsidiary Blue Care Network.
Priority Health, Michigan’s second-largest health insurer, received approval for a 13.2% statewide average premium increase for 2025 policy renewals. Priority Health Insurance Co., which sells PPO policies, secured a 12.3% average increase.
Blue Cross Blue Shield’s change in coverage for Humira — which is used to treat rheumatoid arthritis, Crohn’s disease, ulcerative colitis and psoriasis — to the biosimilar Simlandi takes effect Jan. 1, 2025 for fully insured and self-insured employers.
“If members decide to use Humira on or after Jan. 1, they’ll be responsible for the full cost,” according to a notice Blue Cross Blue Shield sent to insurance agents across the state.
Blue Cross Blue Shield pays about $500 million annually for more than 60,000 Humira prescriptions, Kaddis said. The self-injected specialty drug costs about $6,700 per prescription and each patient typically gets six to eight prescriptions a year, he said.
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Humira accounts for the single largest drug cost for Blue Cross Blue Shield, he said.
The insurer hopes to switch more than 95% of members who use Humira to the biosimilar version, which will be available only through Walgreens Specialty Pharmacy.
Simlandi costs “significantly less” than Humira, Kaddis said. He estimates the net cost savings for Blue Cross Blue Shield’s fully insured business alone in 2025 will be $35 million to $40 million.
“It’s offering continued access to a drug that’s proven to work, but at a much lower cost,” Kaddis said of the pending change in coverage to Simlandi. “There may be some variation in the future with certain drugs, but my gut tells me that the majority of time we will be moving to a biosimilar because it’s very hard for a manufacturer to offer enough rebates to bring the price down to where these biosimilars are.”
Employers and healthcare providers began receiving notice of the coverage change Nov. 11. Blue Cross Blue Shield intends to begin notifying members Nov. 18.
One insurance agent in West Michigan who alerted Crain’s Grand Rapids Business to the change was worried that the Blue Cross Blue Shield was not giving customers enough time to adjust. The agent would have preferred that employers got more notice as they weigh options to mitigate double-digit rate increases for 2025.
Humira generated $12.16 billion in U.S. sales in 2023 for AbbVie, a 34.7% decline from 2022. Executives attributed Humira’s sales decline to biosimilar versions that began coming on the market in 2023.
Through the first nine months of 2024, Humira’s sales declined 37.4% from the same period a year earlier to $5.89 billion.
The opportunity for health insurers to alter coverage came in mid 2023 when AbbVie’s exclusive patent to produce Humira expired, opening the market to competition from biosimilars.
“We started seeing huge competition between the manufacturers and the price on the biosimilars plummeted, it went down significantly,” Kaddis said. “We saw a huge opportunity for us to save money here.”
Crain's previously reported Evio Pharmacy Solutions, a pharmacy solutions company formed by five Blue Cross Blue Shield licensees, including from Michigan, signed a unique direct-purchase deal for a biosimilar version of Humira with its manufacturer, Fresenius Kabi US.
Mark Sanchez writes for Crain's sister brand Crain's Grand Rapids Business.