Cigna pays members to switch to biological drugs that it says are clinically equivalent and cheaper—a new policy provoking objections from providers, who maintain that it crosses the line between covering medical expenses and practicing medicine—and that it threatens patients' health.
Cigna, a Bloomfield, Connecticut-based insurer with 14 million members, offers patients $500 prepaid debit cards when they switch to biosimilar versions of the biologic drugs Cosentyx, which is used to treat psoriasis and certain types of arthritis, and Remicade, which is used on patients with psoriasis, arthritis and gastrointestinal conditions such as Crohn's disease. Patients can choose between two biosimilar medications for each of the brand-name drugs.
This change to the company's drug formulary only took effect July 1, so it's too soon to provide data on how many patients have switched to biosimilar prescriptions and received the debit cards, Matt Totterdale, senior vice president of Cigna Pharmacy, wrote in an email. Cigna expects patients to save at least 10% on their medicines in the short-term and that the healthcare system itself could save $375 billion over the next 10 years as more patients choose less costly options, he wrote.
Cigna is treading into territory UnitedHealth Group abandoned after its plan to pay policyholders to change prescriptions failed three years ago. UnitedHealth offered $500 to patients who chose cheaper HIV treatment regimes, but pushback from drugmaker Gilead Sciences stymied the initiative.
Although generic medicines are common, biosimilars differ in a key respect from unbranded versions of chemical pharmaceuticals. Generic manufacturers can precisely recreate chemical drugs, making them virtually indistinguishable from the original brand name products. Biologics, however, are grown from living organisms like cell tissue, bacteria or proteins, which means they can mimic the original medicines but not exactly duplicate them.
Biologic drugs are contributing to rising prescription drug spending, in part because some carry extremely large price tags. While biologics represented just 2% of prescriptions filled in the U.S. in 2019, they accounted for 40% of U.S. drug spending, according to an analysis by Fortune Business Insights.
"We believe that patients should be the first to benefit, which is why we're sharing savings with them upfront," Totterdale said.
But resorting to "bribery" to get patients to switch therapies is not the right way to bring down healthcare costs, said Dr. Chris Phillips, chair of the insurance subcommittee for the American College of Rheumatology.
Cigna's incentive program puts providers and patients in a bind, essentially forcing them to choose between a medication with proven clinical outcomes and an opportunity to save a few bucks, Phillips said. This is particularly vexing for the rheumatologists who prescribe Novartis' Cosentyx and Janssen Biotech's Remicade because none of the 29 FDA-approved biosimilars approved for these patients is directly interchangeable with the branded drug, he said.
The insurance company is trying to capitalize on the financial hardships many people have endured during the COVID-19 pandemic by introducing the debit card program this year, Phillips said.
"We're just coming out of a pandemic. It's hard times. People have lost jobs, et cetera. and so there's going to be some patients who are going to put that incentive above their well-being," Phillips said. "I cannot emphasize deeply or loudly enough how egregious and ethically sketchy that is. It's making the patient very, very vulnerable to adverse health outcomes through what we would essentially consider bribery."
For patients who use Cosentyx in particular, the Cigna policy doesn't create incentives to swap one drug for an equivalent medicine but for Taltz, a completely different drug made by Eli Lilly and Co., Phillips said. In conjunction with the debit cards gambit, Cigna moved Cosentyx to a higher tier in its formularies for some policies.
The American Medical Association's House of Delegates voted to oppose cash incentive programs designed to encourage patients to change prescriptions shortly after Cigna announced its initiative last month.
Physicians can financially benefit when choosing a more expensive chemical drugs for their patients because Medicare pays them 6% of the drug's cost when doctors administer them in-office. That doesn't apply to biologic medications, however, because the Affordable Care Act requires providers be paid the same whether they use a brand-name biologic or its biosimilar counterpart.
The advent of biosimilars has contributed to lower brand-name biologic drug pricing since the Affordable Care Act created a pathway for FDA approval of clinically equivalent medicines. A 300mg dose of Remicade cost $1,240 at the beginning of this month, nearly half the $2,468 price from five years ago when the FDA cleared its first biosimilar competitor, according to Medicare Part B data from CMS.
Some biosimilars actually cost more than the drugs they are intended to replace. In fact, Cigna is nudging policyholders away from Remicade and toward Amgen's Avsola, which costs $1,475 for a single 300mg infusion, which is more than $200 higher than what Remicade costs, according to CMS data.
Cigna's offer to pay patients to switch is a natural extension of insurers' formularies, under which a patient's share of the cost rises when they select a drug that is not on companies' preferred list, said David Whitrap, vice president of communications and outreach at the Institute for Clinical and Economic Review, a not-for-profit that analyzes healthcare spending.
So long as Cigna retains the original biologic drugs on its formulary, offers rapid appeal processes for physicians and does not require a lot of extra paperwork for providers, "this can be implemented in an ethical and fair way," Whitrap said.
Cigna's incentive program debuted as biosimilar developers prepare to launch low-cost rivals to Humira—AbbVie's psoriasis remedy that happens to be the world's best-selling drug—in 2023. The insurer's new policy signals that it plans to be more assertive in its upcoming negotiations with AbbVie, Bernstein analyst Ronny Gal wrote in an investors note in April.
"The timing is no coincidence in our mind," Gal wrote.
Because pharmacy benefit managers (PBMs) are so opaque, it is hard to judge whether or how Cigna's Express Scripts PBM profits from the incentive program, said Antonio Ciaccia, head of 46Brooklyn drug pricing research organization. Cigna could benefit from manufacturer rebates, access agreements with drugmakers or dispensing fees, he said.
Cash incentive programs share a common trait with drugmaker advertisements during the Super Bowl, Ciaccia said. In both cases, a company's aim is to inspire paints to press their doctors for whatever drug is most profitable to their PBMs, Ciaccia said. As more biosimilars reach the market, other insurers will be watching to see how Cigna fares. If Cigna can persuade enough patients to switch drugs that it profits the company, other insurers will copy them, he said.
