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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 

Scott Draeger

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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Season 3

Season 2

Season 1

Scott Draeger: January 1st is a really important date in the world of PBM operations. I'm pretty positive that there's no one in this organization who can remember the last time they celebrated New Year's Eve. You know it's important for plan sponsors. It's important for members. Jason and Katie, can each of you give us a sense of how things went from your perspective?

Jason Greenberg: Jan. 1 is something I always used to reference as our Super Bowl, but it's really more of a marathon. It's a year-round process in which we get prepared for our January business.

This last Jan. 1 was really, really successful, and I’m really proud of the team. We had our highest volume of clients ever and had the least number of issues ever. We’re actually down 39% year-over-year and the number of issues we saw post go-live and that allowed us to close our command center earlier than ever. So, we have a very disciplined process around managing issues post Jan. 1, and, again, the volume was down so significantly that we closed earlier than ever.

In combination with highest volume and least issues ever, we also received incredible feedback from our clients. We had the highest NPS (net promoter score) we've ever seen at 69. And from a satisfaction perspective, we send out surveys and 99% of our clients were satisfied, and we met over 99% of our performance guarantees.

So really proud of the cross-functional team that supports these new clients or existing clients who are making changes on Jan. 1. Really just a successful year for us.

Katie Schumacher: I couldn't agree more. With digital being one of those cross-functional team members, I truly think this year was one of the most seamless I've seen because of that cross-functional collaboration and readiness that's happening end-to-end with our operations teams.

The other thing I'd add is it doesn't have to be such a disruptive season. We have an opportunity to shift left and start preparing earlier for what some of those upcoming changes are. Like with our onboarding experience, we actually saw that about 97% of our members felt prepared after receiving some of those onboarding communications ahead of that peak season.

We also saw just a remarkable digital adoption this year, and I think that really goes to show just where we're seeing the market head and where consumers are heading. So, by providing that data and information around actions a consumer can take, we were prepared to do that this year and I think that helped. And we saw that in the numbers and the growth in our digital assets. The mobile app alone was up 15% year-over-year.

Scott: That's fantastic. I know firsthand that getting implementation right is such a predictor of a future success, so that's really great to hear. I don't think anybody would argue that the health system was never really built as a system per se. Jason, what are you and the organization doing to connect some of those disparate parts and really simplify the experience for those members and plan sponsors that we serve?

Jason: You know, stitching these different experiences and systems together reflects our overall mission statement around helping people live healthier lives and helping the health care system work better for everybody. But really, we have to think about all the different constituents in the experience. If you think about it in silos, you don't solve the big problems.

A big shift for us over the last three years is really to think about things holistically, and how it all works together. So, you've got to consider our clients’ needs and then our members, our providers and our pharmacies. It all has to work. 

Scott: Jason, I want to tease that out a little bit more. Can you drill into what that client perspective was? What are the latest innovations and solutions that we're working on for clients?

Jason: It all starts with our clients. They're the key decision-makers. And it's really exciting for me, thinking about the health care ecosystem in the pharmacy space. So, it all starts with our Optum Rx Client Central, and this is the ecosystem that we have across our various systems which empowers clients by connecting our industry-leading benefit capabilities. These include our RxClaim platform as well as our client portal.

RxClaim is at the center of it. The core of what we do is adjudicating claims and RxClaim is the industry leader in terms of the size, scale and volume that is processed from an adjudication perspective. We continue to invest in it to modernize it.

And then we surround that with all sorts of tools that help clients. We have a proprietary cloud-based onboarding system. We designed it thinking about a “TurboTax for Implementation.” What it enables us to do is plan-build automation. So, activities that used to take days or weeks to build benefits are now sort of push-button and take just minutes and allow us to have really high quality. We also leverage automation and technology for testing to ensure we have high quality and the outcomes clients expect.

Finally, we continue to invest in our client portal and the way in which we interface with our client. Later this year, we'll actually be introducing a new and improved version of our client portal, which is really one-stop shopping for them. This will allow them to access the various components of our ecosystem, submit issues and do the tasks that they need to do all in one place, as well as providing enhanced reporting.

Scott: Let's talk a little bit about the member experience. There's a patient behind every transaction. We know that consumer expectations have evolved over the years. Katie, what does interacting with their PBM or pharmacy look like to members new to Optum Rx in 2024?

Katie: Great question. I’ll tie it back to what Jason was talking about.

A lot of that automation that's happening earlier on with clients is enabling us to provide the consumer a better and more accurate experience further upstream. So, we do see less of that disruption on Jan. 1. Members and patients now expect to be able to manage things digitally. They expect to be able to make a phone call or go online, see consistent information, and really manage that like they do in every other part of their life.

We've also seen really good outcomes from members switching to digital. Digital promoters are 1.5 times less likely to cancel a prescription and are 8 times less likely to encounter an issue. We also see benefits for the continuity of care overall. A lot of investment has gone into our digital experience. So, consumers starting with that first experience with our PBM and pharmacies understand their coverage, understand their options and have that end-to-end experience.

We spent a lot of time over the last year, year-and-a-half redesigning all of the core parts of our digital experience across web and mobile and really doing a lot of cocreation with patients, with members, including user studies and co-design labs. And so we've seen just amazing outcomes. Again, as we look at what peak season was like last year compared to this year, we can see that in the data, that people are converting at higher rates. They're completing tasks faster and they're getting what they need — without having to dig around deep into the site.

So, it's just been incredible to see this organization’s investment into automation and the consumers’ digital experiences. And it's been incredible to see the outcome and the benefits: everything from continuity of care to prescriptions getting shipped at faster rates. It's been really fun.

Jason: It all starts with the member and their experience. That's what we anchor on. I think there's still opportunity for more adoption of the use of digital, especially in this space. As Katie walked through, we see better outcomes — the data shows that.

Now, our big push is to continue to educate our members about the “what's in it for me” and help them understand how they will have a better experience and outcomes through use of our digital ecosystem.

Scott: Jason, let’s stick with that focus on our members. What are some of the things that Optum Rx is doing to support members with accessibility and affordability?

Jason: Super excited to talk about this. It's at the core of what we do. Operations is always the back office, but what we talk about a lot is the why.

There’s a patient at the end of this, and what I'm really proud of is the culture we've created. The operations teams really wake up every day and understand that the work we do has real life implications for our members and consumers. When you think about accessibility, it's really about meeting the members where they are.

Again, Katie’s work is incredible for those who want to engage digitally, but one of the things we’ve introduced this year is a Spanish interactive voice response, or IVR. We have over 200,000 calls a year from folks who prefer speaking Spanish. So, we've created this IVR to help them, and we've seen massive increases in satisfaction in that population through the engagement in the Spanish IVR.

There's also a real focus on making drugs more accessible. Beginning in January of this year, Optum Rx placed 8 preferred insulin products on our standard formularies at Tier 1, ensuring that we're limiting the out of pocket spend for members to $35 or less.

And when I think about affordability for our members, one of the coolest programs we have is called Optum Savings IQ. It was actually funded out of our Health Equity program, but it's a new platform that enables our teams to see all of the saving opportunities for members for specialty drugs across co-pay cards, grants, foundations, manufacturer credit cards and other free drug programs.

Since we've deployed this, we've saved members over $1.5 billion, with over $800 million in financial assistance delivered just in 2023. And for 2024, we're on target to save our members over a billion dollars. Just as an example, for a patient that's on an autoimmune therapy, on average they saved over $10,000 annually. That's just amazing in terms of getting our members access to the drugs that they need at the lowest price.

There’s also Price Edge, which compares on-benefit versus cash or off-benefit prices and then provides the best price to the member. So, we're not just focused on what's on-benefit, we’re also scanning to see what's out there from a cash price perspective and giving the member the lowest cost possible. We have over 8 million members using Price Edge today and that's not something we charge for, that's something we do just to help our members. In 2023, we saved our members $30 million through this program, with a $47 average member savings per prescription. These are just a few of the different programs that we have to make drugs affordable for our members.

Katie: I absolutely love the topic of affordability and a lot of the things that Jason highlights. Our members expect transparency. They expect flexible options. And programs like Price Edge  — as well as some of the things that we’ve enabled both digitally and through our IVR — have really shown our consumers that we can provide that level of flexibility. We've really seen an improvement in our consumer sentiment around that area.

Scott: Jason, let's move to another vital stakeholder in this whole equation, and that's providers. Are we seeing a similar shift to these modern digital tools in how we're partnering with these providers?

Jason: The provider experience is really critical in relation to the member experience. They really go hand-in-hand, and so we've leaned into that the last few years.

Of the two areas I think about, one is prior authorization (PA). That is one of the key areas in which we interact with providers. Specifically, we want to simplify the process through the tools that they already use, such as the EHR or EMR, the electronic health record or electronic medical record.

When I think about it in those two dimensions from a prior authorization (PA) perspective, we're an industry leader in terms of how we interact with providers. Over 84% of our PAs are submitted electronically, also called ePA, and of those, two thirds are fully automated approvals. That sort of removes the abrasion and the lift from the provider’s perspective.

As I said, we're really leaning into that EHR integration and leveraging the data that's available. PreCheck MyScript is not a new tool but a tool we were the first to bring to market and we continue to invest in. It's embedded in the provider workflow and allows them to check benefit and formulary info for a specific member. And when we see providers use that tool, patients save on average $119 per script and plan sponsors save $266. We also see a 16% switch rate, meaning the provider moved from one drug to another based on the information that was provided to them.

Last year, we sent out a million and a half reminders to providers to start the process sooner when we have PA renewals. We want to take a more proactive approach to PA and avoid any access-to-care issue, and so we've really leaned into that communication approach.

We're also partnering with our clients. There's an opportunity — when clinically appropriate — to automatically extend prior authorization. So, instead of making the provider and the member go through a renewal process, when it makes sense, we're able to automatically extend those PAs. We did that for over 750,000 prior authorizations last year. That totally eliminates the abrasion altogether. 

Scott: Last question for the both of you. It's pretty simple: What's next? What new capabilities have you excited? What do you guys think people should be aware of as we continue to innovate? Katie, I'm going to start with you.

Katie: Absolutely. Gosh, there's a long list here. As we look at just really over the next year and where we need to focus, one of the top-of-mind things for me is continuing to expand across channels. That means making those connection points across channels, doing more native integrations with things like our mobile app and leveraging the power of the camera, of the geolocation to know where somebody is and where they may find that best price.

Another priority is personalization and just really knowing who our consumer is and teeing up personalized and configured experiences for them. And lastly, just enabling choice for consumers, allowing them to kind of tell us where and how they want to be communicated with, where they want to engage, what's relevant and important to them so that we can really craft the right experience.

Jason: This is probably the area that is the most exciting to me. I have a dedicated team focused on innovation.

Just a couple of examples. I talked about the PA space and integration with the electronic health record. We also have a pilot program underway where we're able to leverage technology to reach into the EHR and gather all the information that's needed for a prior authorization. Essentially, we can process the prior authorization within a few seconds. So instead of the traditional submission/rejection and resubmission of information, this allows us to use the data that's already available within the medical record to have the PA processed in seconds. If you think about that from a provider workflow perspective, it lessens the work they have to do, and from a member perspective, they're getting their PA approved almost in real time.

There are other things where we're using AI, and we’re really excited about this. We're really trying to shift from being reactive to proactive. We have another pilot we're working on right now where we've identified certain scenarios or data that is predictive of an issue that will happen later, things like out-of-stock medications or in particular focusing on lifesaving and life-sustaining medications. We can use AI to predict when a member may have an issue and then proactively reach out to them to address it before it ever happens. This is again something we're piloting right now, but I'm super excited about. How do we leverage data and technology to help our members and avoid issues altogether?

Finally, I'll mention our new integrated pharmacy in Mesa, Arizona. We rolled that out last year, and it really harnesses AI and automation. They have a team of engineers who are some of the smartest people I've ever met. We have over 20 patents pending in use there that help us drive scale and quality.

Just as an example, we're using AI to take pictures of every pill bottle and examine the pills inside and compare them to images. This makes sure that we've got the correct pill with the right color, or the right size, and make sure it's not broken.

We're now distributing over 200,000 scripts per day with quality over 99.999%. So, we are leveraging technology both for scale and to ensure the quality of the medications that we give to our members.

Scott Draeger: Michelle, why don't we go ahead and get started with you to set a baseline. Can you give us a sense of where we are right now in terms of both specialty and traditional drug trend?

Michelle Kamprath: Yes, of course. So, right now we're at a very interesting time with drug trend. I've been looking at pharmacy trends for over 15 years and we've been talking for this whole time about the growth of specialty medications. We've been telling clients specialty is going to reach over 50% of your pharmacy spend by next year and for some clients that already happened a while ago.

But when we look across our entire commercial book of business, 2023 was the first year where we actually did see that specialty surpass traditional drugs in spend. However, at the same time that that happened, a class in the traditional space that everybody's talking about called GLP-1s really started to take off.

So, shortly after specialty trend surpassed traditional, the GLP-1s caused traditional trend to really start to pick up. Now, not only did traditional drugs flip back to account for more than half of the spend, but for the first time, at least since I've been tracking trend, traditional trend is higher than specialty trend.

Scott: Another big development we saw in 2023 was the arrival of a slate of biosimilar drugs in the inflammatory drug class. These are drugs that treat conditions such as rheumatoid arthritis, psoriasis, Crohn's disease. Michelle, what does the data tell us now that we have these new alternatives to branded products like Humira?

Michelle: The first biosimilar for Humira launched at the beginning of last year. So, we're kind of at this one-year mark of the biosimilars for Humira. And as we stand here today, there are 10 approved biosimilars. So, we now have a lot of biosimilars to Humira and there's more in the pipeline too. This is a moment that we've been waiting for a decade. Humira has been the reigning queen of worldwide pharmaceutical sales for about 9 years, and it took a global pandemic for the COVID-19 vaccines to surpass Humira in worldwide sales in 2021. That was the first drug that had surpassed Humira in 9 years!

Even though Humira today still has the lion share of the market between it and its biosimilars, that doesn't mean the biosimilars aren't doing their job in bringing the cost down. When the biosimilars came out, they created competition in the market, which we all know drives down prices and we've seen the net cost of Humira come down by over 20% since they started coming out. In the end, competition is good.

We're looking forward to more biosimilars entering the market this year. Some of them are going to include more interchangeable options and a high concentration biosimilar, which are two things that just don't exist yet in the market. So, it's still an exciting time for biosimilars and more to come.

Scott: The other big trend we saw come to the forefront recently is the increased utilization of the GLP-1 drugs. These are medications that were initially approved to treat type 2 diabetes, but later received approval for the for the treatment of weight loss. As you are well aware, utilization and cost of these medications are a top concern for a significant amount of our plan sponsors. Michelle, based on your analysis of the data, what should plan sponsors consider as they approach this class of drugs?

Michelle: Glad you mentioned diabetes, Scott. When you talk about GLP-1s, you really have to separate the ones that are approved for diabetes, which most of the plans cover today, from the ones used for obesity, which have historically been more of a choice for plan sponsors.

I think the biggest question that some of our plan sponsors are struggling with right now is whether or not to cover GLP-1s for weight loss, period. And for those who already do cover them, it's how can we continue to afford them? While they're driving cost, driving trend up so much, at the same time the plan sponsors are getting pressure from their members to cover them. Some employees are even finding that coverage for GLP-1 drugs for obesity is a benefit that can help retain their workforce. Like the members, the employees see it as a benefit that they have to have.

The problem then becomes at what cost do they cover them? As they stand today, GLP-1s are just priced too high here in the U.S. We pay 10 times more than what they cost in Western Europe for the same drug. And we also know that only about one third of patients who started on the drugs are still taking them after a year. Plan sponsors are smart. They see the data and they're starting to think more creatively. They are thinking “OK, I can pay $1,000 a month for one person to take this drug. Or is there another way I can spend that $1,000 a month to help my members lose weight and get healthy?”

So, plan sponsors are just in a really tough spot right now. They have to manage their plan to a budget. I'm not saying these are bad drugs or saying they don't work. But I can confidently say based on both our internal analysis as well as a very reputable external source, ICER, that these drugs are not cost effective at their current price.

Bill Dreitlein: Scott, I'd like to kind of pick up that thread a little bit. I agree that we're in a really interesting, perhaps uncomfortable, spot with these drugs right now. There's a natural tension between two very important components of the business of health care. One is the clinical aspect of do these drugs work? The GLP-1s clearly have a benefit on lowering A1C very potently for diabetes and then they help weight loss. But at the same time, there's also the cost of the treatment. How do we manage it so that the people who need these medications can get them while also ensuring that they take it long enough to realize the benefits of it?  As Michelle mentioned, adherence and persistence with these drugs can be very difficult.

Scott: Bill those are some interesting points. This is obviously a very dynamic class. When you look where we are today compared to just two years ago, the market is just totally different. Today, Wegovy (semaglutide) and Zepbound (tirzepatide) are the only two GLP-1 products approved for weight loss. How do you see this class evolving over the next several years?

Bill: Yeah, I think we're just at the beginning of this. I think the evolution in the GLP-1 class will come in probably three forms or three waves.

One, is the expansion into new indications. Semaglutide and tirzepatide are each approved for diabetes and weight loss. They're both now looking to increase their footprint a bit into areas that are connected to both of those disease states.

For example, semaglutide is being studied for chronic kidney disease, which is relatively common in patients with diabetes. the question is if you treat the diabetes with the GLP-1 like semaglutide, does that have beneficial effects on chronic kidney disease? It might. We're looking for that data sometime this year and that will give us a little bit more information about the true impact of these drugs beyond just lowering A1C.

Another example is sleep apnea, which is commonly associated with being overweight. We know that there's cardiovascular implications to that condition. There's additional data coming forward this year about tirzepatide to see if that drug can help with sleep apnea. So those are just two examples of how we could see new indications or new areas that are related to how GLP-1 drugs are used today.

The second wave is in new mechanisms of actions. We have multiple drugs in the pipeline that are looking to build on the backbone of semaglutide and tirzepatide and add some additional components to either boost the efficacy or increase safety.

A good example is retatrutide. It's a triple incretin agonist, so it targets the glucose-dependent insulinotropic polypeptide, glucagon-like peptide 1, and glucagon receptors. By adding that extra action of targeting glucagon, there may be more potent weight loss. The early signs are that it does seem to be associated with the pretty impressive weight loss, maybe a little bit more than what we see with the existing dual agonist treatments. But we'll have to wait and see if the side effect profile is any better.

And then there's another drug CagriSema. It’s a combination of cagrilintide, an amylin analog, and semaglutide. That extra mechanism of action could potentially enhance efficacy for diabetes and obesity. It's still early with both of these drugs, but the initial findings from phase two trials are encouraging. We're hoping to get more solid data within the next year and I'm eager to see whether the tolerability is even better with these agents.

And then the third wave or area is how GLP-1 drugs affect such a broader range of organ systems. As we learn more about these drugs for diabetes and obesity and their tangential conditions, we're going to continue to learn more about their use in other diseases.

There's great interest in using these drugs for nonalcoholic steatohepatitis or NASH. It’s a common condition. NASH really means a fatty liver. When there's a build-up of fat in the liver it can lead to fibrosis and damage to the liver down the line. In turn, this could lead to liver transplants. So, the hope is that if you can attack that disease at its source, then maybe you can have the beneficial downstream effects of preventing liver failure or liver transplant.

There's also a lot of interest in using GLP-1 drugs for things like Alzheimer's disease since GLP-1s target receptors in the brain, that activity in the brain. The hope is there may be other actions in the brain that could help with Alzheimer's disease, and it would be a whole new area for these drugs. That said, we are still in early days for this, but the potential impact could be fairly large.

Michelle: Bill, it's absolutely fascinating how much development is going on, but also how easily some of those terms just flow off your tongue. You definitely have it down to a science.

Bill: Thanks, Michelle. Looking at the pipeline, it's really grown. It seems like every manufacturer is trying to get into the game either with molecules that they already have in-house or by acquiring somebody that has a promising drug in development in that particular space.

It's a just really dynamic space right now. We know some of these will ultimately not pan out, but some of them will and some of them may be surprising. That's just the nature of the pipeline.  So, we watch for that and if we see the signals, then we look a little more deeply and try to understand what the potential impact might be. And then we plan accordingly.

Scott: Bill, moving beyond GLP-1s., as you look at 2024, what are the other consequential FDA approval decisions or trends that are you expecting this year?

Bill: One trend that we have seen is that rare disease products have outnumbered non-rare disease products for the past four years in a row. Now, the development pipeline has swung in a different direction and many of the ones that I'm watching are not in that rare disease realm at all, but really more for mainstream type of conditions with larger populations. Since I like to think in threes, I’ll give you three products in different areas that I'm looking at for this year that that I think could be interesting and impactful.

The first one is resmetirom for NASH. We spoke earlier of potentially using GLP-1s for NASH, but resmetirom could be the first drug ever approved for that indication. It's an oral product, so it's very convenient and it seems to have some data that supports it where other drugs have failed. So, I'm looking forward to that one. We could see an approval in March.

The second one that I'm watching is a drug called ensifentrine. It's an-anti-inflammatory but it's not a steroid and it's used for chronic obstructive pulmonary disease or COPD. COPD is one an area we really haven't seen a whole lot of development in recent history. It's given via nebulizer, so it's not like a metered dose inhaler where you take a few puffs. It's probably going be used more in people who have severe disease. So, it's interesting in that it's the first new mechanism of action that we've seen in a long time in this disease space. And if it works there, then certainly they we could eventually see it expand into other areas like asthma. We expect this one could be coming out mid-year, possibly in June.

The third one I'd like to highlight is called KarXT. It’s a combination of two drugs and it's used for schizophrenia. The first drug gets into the brain, and it works on the symptoms of schizophrenia. But the problem with that one chemical is that it causes too much toxicity in the rest of the body. So, what the company did was they paired it with a drug that doesn't get into the brain but counters all of those side effects in the body. This enables KarXT to be used in high enough doses where you can actually get benefit from the product. This is a totally different mechanism than the existing treatments that we have for schizophrenia. Importantly, it's not associated with the same degree of weight gain.

That's been one of the huge problems with the typical antipsychotics used for schizophrenia and bipolar disorder. Those drugs can cause changes in the metabolic patterns of the body and people can put on a tremendous amount of weight. This is an area of mental health where there's been a great unmet need and this new drug could provide an effective therapy that’s more tolerable as well.

So, one drug for a metabolic condition, the second for a pulmonary lung condition and then the third for mental health for 2024. For anybody looking further ahead, there's a drug called VX-548, which is a new pain reliever. But the interesting thing about that drug is that it does not work on the opioid receptor and it's not an anti-inflammatory drug like ibuprofen. And so it seems to be better than placebo. Not quite as good as an opioid, but there has been a great need for new pain relievers that are non-opioids because of the addiction crisis we have here in America. If all goes well, it wouldn't be until 2025 that we might see this drug, but it's an important one. So, you heard it first here on your podcast, Scott.

Scott: Thank you, Bill. Michelle, in a similar vein, are there any trends specifically that you think plan sponsors need to pay close attention to as we progress through 2024?

Michelle: So a couple of things come to mind with that. If Bill thinks in threes, I think in twos. The first one that comes to mind is drug shortages, and the second one is reformulations.

With drug shortages, there have been shortages in several classes, including GLP-1s, by the way.  One area where it's really affecting plan sponsors from a trend perspective is in ADHD. There are shortages of generic Adderall and more recently generic Vyvanse. This means that patients may not have the choice to even fill a generic when they go to the pharmacy counter, even though there's one that's approved. So, it's really preventing the full effect of the generic savings to be realized by the plan, at least until these shortages are resolved.

The second trend that we've been seeing is drug spend shifting from the medical benefit to the pharmacy benefit. To be fair, we sometimes see a shift from the pharmacy to the medical benefit, but that really hasn't been the overarching trend that we've observed. And this is happening in several different classes.

For example, over the past several years we've seen this general shift in oncology as more and more cancer treatments have been approved as oral formulations. This makes it easier for patients to take them. It also means that the prescription will more likely be processed and paid under the pharmacy benefit. More recently, we've seen this trend in specialty asthma. There's a handful of drugs for asthma that used to be administered in a provider's office, and then they were reformulated as self-injectables. Now people are filling them at the pharmacy counter.

As a result, we've seen the trend in specialty asthma go up. There were also a couple of reformulations that were approved late last year in the inflammatory class. So, we might see some of those shifting over to the pharmacy benefit. It's also happening in the rare disease space. There were two newer oral formulations to treat ALS and this type of shift isn't necessarily a bad thing, but it's something to be aware of because specialty spend is increasing. It might be partly a shift rather than just an increase in utilization or cost.

Bill: I'd like to pick up on that last one, Scott, because reformulation is now a really big area of the pipeline. Manufacturers are looking at products and trying to reformulate them and find new ways to take advantage of the delivery mechanisms we have today and make them better. And so sometimes you see that shift from the medical to the pharmacy. If you're managing the pharmacy benefit but not the medical, all of a sudden you might see this drug appear on your and radar and say “whoa, where did this come from?”

Scott: Thank you Michelle and Bill really appreciate your time and expertise today.

Michelle: Thanks, Scott. It was a pleasure.

Bill: Thank you, Scott.

Scott: Arash, let's start with the science behind these therapies, what are gene therapies and how do they differ from other drug classes on the market today?


Arash: 
It’s helpful to start with an overview of how your typical drug works. So, the typical drug such as small molecule drugs and even more complex biologic products, work by interacting or binding to specific targets in your body. And those targets can range from receptors in your cells to proteins or other molecular targets. This is an oversimplification, but by interacting with these targets that are thought to be related to a disease, drugs can provide symptom relief for altar disease causing processes in the body.

 

What these drugs don't do is alter the patients actual genetic code. In the case of inherited diseases or genetic conditions, your standard drug isn't going to be treating the underlying cause of the disease. Also, since these traditional drugs aren't fundamentally changing a patient’s genetic code, the benefits are typically temporary. So, your typical drug has to be used continuously or even for a patient's entire life if it's being used to treat a chronic condition.


Gene therapy, and sometimes these are referred to as genetically modified cellular therapies, are treatments that directly modify a patient's genes or genetic code in order to treat or cure their disease. Gene therapies are usually evaluated in conditions where there is a very high unmet need and where we don't really have any other treatments currently available because your standard treatment can't treat the underlying genetic defect.


There are two major categories of gene therapies that have been approved so far. The first are chimeric antigen receptor or CAR T cell therapies. These are used to treat certain types of cancers and the way they work is by modifying a patient's immune system by genetically engineering their T cells, which are immune cells, so that they can produce a special receptor that targets cancer cells. And when the modified T cells interact with these cancer cells, they activate an immune response, which can lead to the destruction of a patient's cancer cells. So, that's kind of one big bucket of gene therapies.


The second category, which is what most people probably think of when they think of gene therapies, are the non-oncology gene therapies that are used to treat diseases caused by genetic defects. Genetic defects can lead to a lack of production or a mutated version of important proteins in the body. The way your traditional gene therapy works is usually by gene addition. It basically provides a patient a functional copy of a gene so that they can produce their own proteins or enzymes. There are a lot of different delivery techniques for this, but the most common is using some type of viral vector or carrier to deliver the gene to a patient’s cells.

 

A great example of this difference between your more standard type of drug treatment versus gene therapy is how we treat hemophilia B. So, hemophilia B is a rare genetic bleeding disorder. It's caused by a deficiency of clotting factor 9, which is a blood clotting protein. Historically, the standard of care has been factor replacement therapy. This is basically giving patients a synthetic form of clotting factor to replace their missing or deficient factor. And these patients typically will have to be on chronic, lifelong factor replacement to prevent bleeding episodes.


But last year, the FDA approved the first gene therapy for hemophilia B, Hemgenix®. This therapy works by introducing a functional copy of the Factor 9 gene into the patient’s cells so they can produce their own clotting factor. It’s administered as a one-time dose and the goal is to either eliminate or significantly reduce the need for patients to be on chronic factor replacement therapy.


And I think that's the key point here, that gene therapies intended to be used as a one-time dose and the benefit is hopefully going to be sustained. The hope is that you're going see long lasting or even permanent benefits. However, that's also the great unknown with these treatments because we just don't have enough long-term data to know how long these treatments really provide benefit to patients.


Scott:
Arash, the first gene therapy was approved in 2017. From your perspective, how was the market evolved since then?

 

Arash: I think a couple of things really have changed from where we were in 2017 to where we are now.


First, most gene therapies that were initially approved in those first few years were CAR T cell therapies for cancer. If you look at 2017 to 2021, we had five CAR T therapies approved compared to just two kind of true gene therapies for genetic diseases. Those two were Luxturna®, which was approved in 2017 for a very rare genetic eye disease. And then in 2019, we got Zolgensma®, which was approved for spinal muscular atrophy, which is a rare neuromuscular disease.


CAR T therapies have a lot of similarities with other gene therapies, but they are substantially less expensive. They cost about $400,000 to $500,000 for a single treatment. In a vacuum this is very, very expensive. But it's still a fraction of the cost for a gene therapy for a rare disease.

 

Over the last couple years, and really over the last 12 months, that balance has shifted. In 2022, we saw the beginning of what we anticipate being a wave of gene therapy approvals for rare disease. We had three approvals in late 2022 and then we’ve seen three more products gene therapies approved for rare diseases this year already. So, we went from two of these true gene therapies in 2017 to now having eight of them. By comparison we've only had one additional CAR T therapy for cancer that's been approved in the last two years.


The other evolution I would say has been around costs. I mentioned CAR T cell therapies are less expensive relative to true gene therapies. Yet, even among the non-oncology gene therapies, there's been a real shift in terms of cost. When Luxturna was approved, that was $850,000 for a single treatment course. When Zolgensma was approved in 2019, the cost was $2.1 million. And at the time, that was the most expensive drug ever approved. But today, looking at the gene therapies that have been recently approved, they all hover around about $3 million. For example, Hemgenix is $3.5 million, which is currently the most expensive product in history.


So, there's been a real increase in price for gene therapy products that probably exceeded even what most of us thought was going to happen for these drugs we all anticipated to be expensive. Even relative to our expectations, they ended up being even more expensive, at least the most recent products.


Nick: 
I agree with Arash. When Luxturna was approved it really represented an expansion of the applicability of gene therapies. They're no longer just focusing on the treatment of cancer. So, in my mind, it was a major turning point. Soon, the FDA started to prioritize and establish frameworks, policies, and guidance documents for gene therapy development. That put us on the path to today and into the future as well.


Scott:
Nick, I like to stay with you and really kind of pick out a theme that Arash just mentioned, that's the cost of these therapies. You and I spend a lot of time in the marketplace and plan sponsors are clearly concerned about what type of impact they can see with these therapies. Do we need to think differently about how we pay for gene therapies, at least in the context of how we pay for traditional drug classes today?


Nick:
Absolutely. Actually, I think the logic starts even further upstream than the payment. Plan sponsors have to start thinking about how they adjust their business planning practices related to drug spend and risk modeling to better inform, analyze, and predict potential gene therapy exposure. This is something that everybody needs to be doing. Now, the implications are just too high from a financial perspective. We really need to have a clear sense on this.

 

And to touch on the point about payment, we've seen the emergence of outcomes-based agreements, warranty type agreements with manufacturers. They represent an innovative approach and certainly promote positive outcomes for both members and the payer to some degree. But these outcomes-based agreements don't really adequately shield the plan sponsor from all of the financial risk.

The other piece that that represents a risk for plan sponsors is employee turnover. The plan sponsor may pay the one-time, catastrophic cost for a gene therapy and expect some return on that upfront investment with the improvement to the member's quality of life and maybe an offset of some ongoing chronic therapy costs. But if the employee leaves that plan sponsor for a different company or opportunity, that plan sponsor still footed the bill while another entity reaps the financial benefit going forward.


So, how do we mitigate some of those risks? Ideally, you're able to link the price that you pay to therapeutic outcomes. We've got the mechanism to do that through outcomes-based agreements, and contracts with manufacturers. One unknown I will touch on is that we're still figuring out how we're going to reliably collect data to inform those outcomes-based agreements.

 

Another thing I do want to call out as an important risk mitigation option is spreading out the risk and supplanting it with monthly, predictable costs. We're seeing risk protection products entering the market and those do a much more effective job of shielding the plan sponsor from the unforeseen and potentially catastrophic claim for a gene therapy.


Scott:
Nick, do we have a sense of the likelihood a plan sponsor would incur a claim for a gene therapy in any given year?

 

Nick: Optum has done work to model this out. As Arash touched on, we're going continue to see these therapies come to market. When it comes to probability analysis, it certainly depends on the size of the plan sponsor. For example, for 10,000-member group, your probability of incurring at least one gene therapy claim by 2025 could be 7%. By 2029, with expanded patient populations, it might be as high as 33%. If you're a really large group with 250,000 lives, the probability of a claim by 2025 is at 84%. Then by 2029, a 100% probability of a claim is what our model showed.


So, I mean these risk protection products are really critical to consider. For some of the simulations we did with risk assessments, we looked at a 50,000-life group. It demonstrated significant cost avoidance after premiums and deductible payments related to gene therapy risk protection.


Scott:
Those near-term probabilities you just quoted are pretty staggering, I'm sure, for plan sponsors that are listening to this. What advice would you have for a plan sponsor concerned about paying for gene therapies?

 

Nick: Yeah, I think plan sponsors should be concerned. I mean this is a big consideration in the marketplace now. As I think about this, there's three hallmark points I would make.

 

The first is to address it now. Lean on your PBM, on your consultant partners, to educate you on the risks and the strategies that you have in your toolbox to help mitigate some of this.


The second one it would be to understand risk protection policies. If you're hearing these things for the first time today, you've got some homework. Read up on these. Understand and be sure that the policies you are considering for your plan are comprehensive in terms of the coverage criteria. Also make sure that you've got seamless utilization management processes to prevent avoidable disruption to members and providers. Most risk protection products will define their own coverage criteria and utilization management processes in the policy that the plan must agree to use. So, you really got to ensure that alignment of those criteria. It's critical and represents a major contingency in determining if that product is right for you. One other comment I'll make is that it's common to see pre-exclusion criteria in these risk protection policies with varying degrees of scope. It is imperative to understand these criteria and the implications that they have on member-specific coverage. So really, do your homework on this and understand it.

The final point is to temper your expectations. It's easy to categorize these gene therapies incorrectly as long-term cures for the conditions they treat. It’s probably better to view that as the exception to the rule. Depending on the product, durability of response can represent a major contingency when interpreting the potential clinical and economic value.

Scott:
Arash, I'd like to conclude our discussion today with a question for you.
As a member of our pipeline and drug surveillance team, you're the guy with the crystal ball. Let's take a look ahead. What does the future look like for gene therapies?


Arash:
Just looking at the immediate term, what's going to generate a lot of attention will happen in December, when we have two highly anticipated FDA approval decisions for gene therapies for sickle cell disease. We have lovotibeglogene autotemcel (lovo-cel) from Bluebird Bio and exagamglogene autotemcel (exa-cel) from Vertex Pharmaceuticals and CRISPR Therapeutics.

 

This is notable because sickle cell is the largest disease state that will actually have a gene therapy available. Sickle cell disease effects over 100,000 people in the US, which is still a rare disease. But if you compare it to other diseases that have gene therapies, it's much more common than your typical gene therapy.


I will say that that number is a little bit misleading. Of that 100,000 people, only a small percentage of patients with the disease will be eligible for treatment because you have to meet certain criteria in terms of severity of disease, age and other things. So, it's probably around 10 to 15% of that overall population who are eligible.  Still, that’s a large population relative to other gene therapies that have come to market where they may be treating less than 100 people.


The other interesting aspect of these decisions is that exa-cel is potentially the first gene therapy utilizing CRISPR-Cas9 gene editing. Gene editing is different from your traditional type of gene therapy in that as the name implies, involves modifying a patient's existing genes within their genome. Whereas, your typical gene therapy works through gene addition, where you are basically adding a functional gene to a patient's genome.


When you compare gene addition versus gene editing, both have potential advantages and disadvantages. But we do have more history with gene addition, with several gene therapies that have been approved using that technique. So, it's more of a known entity in terms of the efficacy and or maybe even more importantly, safety. CRISPR-Cas9 is just newer and so it will be really interesting to see how that review goes from the FDA. In some ways it may set the precedent for how future reviews go for other gene therapies that are utilizing CRISPR-Cas9 technology.


If you look out further into the big picture, there are potentially 10 to 15 more gene therapies that could be approved between 2024 to 2025. I mentioned earlier that we have eight gene therapies that have been approved so far. This number could potentially double or even more in the next couple of years. Gene therapies are just going to be a growing area of the pipeline. So, I think people need to be aware of that fact that this flurry of approvals that we've had recently are not a blip. This is going to become a continuous stream of products that are going to be approved.


As Nick alluded to this earlier, individually, I don't think any of these products are going to have a significant impact or, on an individual basis, carry a huge risk. But it's really the aggregate. When you really start to see 10-15 and as they start to grow even more, that's when you start to see the potential risk that a plan may actually incur a claim for these patients.


I think what's also interesting is that there will be some competition in this space. Right now, the gene therapies that are available, they're basically a one off – you have one gene therapy that treats one disease.  However, there are some conditions like sickle cell disease, beta thalassemia, hemophilia, and Duchenne muscular dystrophy, where we actually are going to start to see competition potentially. It’s always good to have multiple options from a clinical perspective. It gives us an opportunity to evaluate which product may have better efficacy or safety, but also the hope would be that maybe it brings down the net cost for these products.


Looking beyond 2025 and farther ahead, it's important to realize that gene therapies are also being studied outside of genetic diseases, outside of rare conditions. There is development for more common conditions. A great example of that is for retinal diseases. In particular, wet age-related macular degeneration or wet AMD. It's one of the leading causes of vision loss for the elderly. There are now multiple gene therapies that are in development for that disease state.

So, I think the risk that is currently present is only going to grow. Right now, it's really only for rare disease, but gene therapies could grow into addressing more common and chronic conditions. This obviously provides a great opportunity from a patient perspective. These treatments would be one-time treatments. It's also going increase the challenge to payers in terms of “how do we cover these products once they expand out beyond just rare diseases?”

 

Scott: Nick and Arash, I really appreciate the both of you joining our podcast today to talk about this exciting topic.

Scott Draeger: Corey, let's start with the basics. Can you level set for us what health equity is and why it's important?

Corey Coleman: Sure, Scott. I really appreciate the question because I think there's a lot of talk about health equity. I try to be really clear and intentional around the language that I use when talking about health equity. Fundamentally, the Center for Disease and Control and Prevention has defined health equity to be the state in which everyone has a fair and just opportunity to attain their highest level of health.

Achieving this requires ongoing societal efforts to, number one, address historical and contemporary injustices. Number two, overcome economic, social, and other obstacles that may impede health and healthcare. Number three, eliminate preventable health disparities, and we'll talk a little bit more about that particular goal. Number four, to achieve health equity, we must change the systems and the policies that have resulted in generational injustices that give rise to the current disparities that we see in our systems.

Additionally, when we think about the importance of health equity and our ability to understand health inequities, health disparities, one of the things that comes to mind, that I think is really important for the audience, is “what's the financial cost of not doing anything around some of these challenges?” Recently, a study predicted that health inequities could impose a staggering $1 trillion price tag within the U.S. healthcare system by the year 2040.

So, it’s important for all of us to understand that not addressing health disparities and the inequities that exist within our system does have a price tag on it. It really requires all of us to lean in, better understand the challenges, and provide better care for the patients that we're supporting.

Scott: Sumit, you mentioned earlier that you lead the OptumRx clinical organization. What role does the clinical organization play in addressing disparities in health equity?

Sumit Dutta: Let me start by noting that Corey and Scott and I know each other really well. Both Corey and Scott are big readers, and I am as well. We trade books and read on a various number of topics. Corey sent me a book within the last year called Medical Apartheid. It makes an important point for me that I want to share. That is that the history of inequity is long and that history in healthcare, in particular, is also long. In this book, it talks about the Tuskegee studies where, essentially, a group of people were not treated in order to see what the effects of syphilis would be. Can you imagine that? Talk about inequity. There's a long history of it.

The second thing [to note] is it's easy to overlook it. Health inequities exist in our society today and they're easy to overlook unless you try. Back to Corey's comments — you have to work at it. You have to recognize it's an issue and you have to move forward.

Getting back to your question, Scott, how does the clinical department have a role? We have a role to be vigilant and look for it using our data, using our interactions with our patients. We then create effective policies and programs to address the discrepancies in access to care and outcomes. Corey, anything that you would add to that?

Corey:  I think you've hit it right on the head, Sumit. Being vigilant, number one, is the most important thing we have to be. Dr. Sumit oftentimes quotes something to me that I think is really important. Really, what's at the heart of this work is uncovering the undiscoverable, making the invisible visible.

A lot of the work we're describing is how many of us within our organization are being really intentional around trying to understand where these disparities exist within the patient populations that we have responsibility for. That intentional vigilance is really at the heart of this work. It helps to provide insight around the art of the possible and our ability to create new solutions and strategies to support the patients and clients we have responsibility for.

Sumit: I'll give one more example, Scott. All the things that we've talked about, the vigilance, the data, it also takes collaboration. Corey worked with one of our analytics experts, Will Wittkopf, in order to devise a tool that uses data to uncover discrepancies in treatment of diabetes. That kind of collaboration within the company is essential in order to develop the techniques that we use in order to make the invisible visible.

Scott:    Sumit, I love that example of leveraging analytics. Obviously, health equity can be broad and complex. Building off your last statement, what specific areas is OptumRx really focused on addressing?

Sumit:   Well, I'll give two examples, but they're certainly broader than that. We just spoke about the diabetes care. I think we've done a number of things that are important here. I find health equity and affordability are subjects that are tied at the hip. When we can make drugs more affordable, member, cost share more reasonable, we also address health inequities.

Some of the work that we've done is driving insulin copays below $35. Scott, you've been instrumental with your team in making that happen. I've seen the tremendous progress in the number of prescriptions that the copay is less than $35 or even zero for insulins increase under your guidance. I think that that is one important example.

Maternal care is another. From a corporate perspective, we focused on maternal fetal disparities in certain groups of people. That's been an important initiative for us and there's more work to be done there. Let me start there. Corey, would you add anything to the list?

Corey : From an OptumRx standpoint, we have really focused on five particular key areas. Number one, address disparities in pharmacy access. Two, drive equity and medication adherence. Three, address high and rising costs of specialty pharmaceuticals. And number four, enable maternal and child health drug safety, which you've just alluded to. The fifth and final one is facilitating multi-language support.

It's really worth noting that our endeavors have garnered steadfast support from our entire leadership team. I cannot express how important this is for our organization, and really any organization, to meaningfully advance health equity. We have to be intentional around understanding how we can make an improvement. I say this with pure joy. I'm really, really proud of our organization and I mean this sincerely. Leaders throughout our organization are really leaning into this work.

As a result, some of the results that you're starting to hear about such as the diabetes medication adherence dashboard are really starting to make an impact. We are beginning to lay out new strategies that allow us to really uncover data and patterns within the patients we're serving that we've not been able to see before. That's really powerful work and it gives us the opportunity to better support our members, be able to identify disparities within the patients we're serving.

Scott:    Corey, let me stay with you here. What other examples of programs or maybe initiatives does OptumRx have in place today to continue driving equity?

Corey: Thanks again for that question, Scott. We have an array of strategies in place and plans in place, and a couple that I will call out.

I'd start with our Genoa pharmacies. We have Genoa community pharmacies spread throughout the country today. Working with that team, we've been able to pinpoint through data and data analytics the communities that are facing adverse health outcomes as a result of their zip code. We're able to pinpoint those particular populations, overlay that information with our Genoa community pharmacies, and be intentional around making flu vaccines available to them. These are community members that are seeing adverse health outcomes as a result of not having ample access to flu vaccines. We know, again, in order to really move this work forward, we have to be intentional around making these kinds of services available for the patients and the community members we serve.

In addition to that, I would really pinpoint some of our new programs and strategies that are underway. We're currently developing new techniques and new support services for clients based on their employee mix and disparities that we are uncovering from within their respective organizations. Those insights are helping us to create new, tailored, and intentional programs to recognize the specific problems that each specific client has. I think that this is really the strategy we'll be moving forward with for more and more clients.

Another important program that I think demonstrates how OptumRx is really advancing health equity forward is we have a new program with our network team where we're working with local pharmacies throughout the country that are really serving as point of care support services for patients.

Also, we also have a new program in place today in which we are actually providing social determinant of health assessments for patients to better understand what are the specific challenges that may be getting in the way of an individual trying to secure their medication. It may be because of transportation challenges. It may be because of food insecurity challenges. These social determinant of health assessments really provide the kind of insights needed to inform new strategies to support the members.

Lastly, at OptumRx, we also recognize how important it is for us to be intentional around diversifying the workforce. OptumRx, in collaboration with Florida Agricultural and Mechanical University (FAMU) a historically black university in Tallahassee, Florida recently established a new scholarship program to support students in the College of Pharmacy. One of the things I think is important about this commitment to supporting diversifying the workforce is recognizing that representation of minorities in the pharmacy profession is low, with limited access to funding for graduate pharmacy programs being a major barrier.

This intentional effort by OptumRx really speaks to the overall commitment we have to helping to realize health equity by being intentional around providing resources to the communities that we know are challenged. One of the things that I think we're really pleased about is that there's going to be about 15 students who are going to benefit from up to $100,000 to support their ongoing matriculation through the pharmacy program at FAMU. So, this is a key part of our overall strategy to advance health equity forward.

Scott: Sumit, you just spoke about the organization's work to encourage plan sponsors to use reasonable member cost share for lifesaving medications like insulin. What other programs or initiatives do you see OptumRx putting into play here over the next several months?

Sumit: I think critical drug affordability writ large. We have made progress in insulin, as I've mentioned. Scott, you're my partner in this. Frankly, it’s you and your team that have done that and made it real.

We have also followed suit with our colleagues at UnitedHealthcare to focus on five critical drugs that include insulin, but also are drugs where making the copay affordable matters. Drugs like naloxone, which recently went over the counter, is a drug that treats overdose of opioids. We do not want there to be a barrier for people to get drugs like that.

I think the opportunity is continuing to expand that list and convince our clients that it's important to invest in their members that way. That really does require conviction. It requires convincing people, our clients, that it's in their member's best interest to do it. Not always do we control all of the ability to make those decisions. Sometimes it's in our hands and sometimes it's in our clients' hands. When that's the case, our role is to be the advocate for the member. Again, thank you to you and your team to make that happen.

Scott: From my perspective, I think it's really inspiring to hear about the investment that the organization is making on this really, really important subject. To conclude our discussion today, I'd like to get each of your perspectives as to what type of role plan sponsors can play in helping to advance health equity. Corey, I'd like to begin with you.

Corey:   Sure. I think it's really important for clients to take stock of some of the challenges that they may be facing from an employee standpoint, understanding where those patterns are. Are you able to, today, uncover disparities within your employee mix? If that's the case, I think our organization is willing and excited to work with you to help tailor solutions to resolve some of those healthcare challenges and chronic conditions that they may be facing.

I would also add that being intellectually curious around some of the challenges you may be having from a subpopulation standpoint. Why are there adverse health outcomes with certain groups? So, I think being really intellectually curious around that is a really great starting point.

As Dr. Dutta mentioned earlier, there are a number of really great books out there. There are people who dedicated their lives to this field of study. So, there are plenty of experts that can provide insights around how to move this particular body of work forward. But I would say know that you can always reach out to OptumRx. We are a willing partner in position to help support the clients we serve.

Scott: Thank you, Corey. Sumit, what about from your perspective? What can plan sponsors do to help advance health equity?

Sumit: I think there are three things they can adopt as a framework. By the way, it's the same three that we adopt as a framework. Scott, you just sent me a biography on Robert F. Kennedy. It’s a fascinating book and it was a hole in my reading of presidential biographies, so thank you. RFK really worked on voting right inequities. That was one of his causes. When he approached a problem, he did three things, the same three things I'd say to plan sponsors and I would say to my colleagues out there too.

One is to understand the issue. To understand the issue is an active process. It's not a passive process. Scott, you know I have a love of travel and reading. I think what I really like is that those activities allow me to actively explore the cultures of people that are different from myself. If I don't understand what the situation might be like for someone else, then it's hard for me to have empathy. It's hard for me to understand that there's a problem. That's number one, understand, and we can help our clients do that.

Number two, we talk about visualization. It's using the data to prove a point, or maybe to increase your understanding, or even change your understanding. A data-driven approach is important. Understand, seek to understand. So, two is to visualize.

Three, maybe the most important part, is to take action. It's incumbent on us. Think of what RFK did relative to voting rights. After he understood the situation and had the data, he enacted policies to make changes. We rely on individuals. In this particular case, we, at UnitedHealth Group, are leaders. I rely on my colleagues that are listening to this to understand, to visualize, and then take action.

Scott: Thank you, Sumit and Corey. Your leadership in this space is so critical to closing gaps in health equity.

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.

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.

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. 

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.

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.

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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