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The role of biosimilars in lowering specialty costs

A valuable lever in our lowest net cost strategy


Joshua Fredell, Vice President & Head of PBM & Specialty Product Innovation


The era of biosimilars is here, creating an opportunity for client savings and improved patient affordability. Biosimilar drugs are highly similar to U.S. Food and Drug Administration (FDA)-approved biological reference drugs with no clinically meaningful differences in safety and effectiveness.


Additional drugs in the marketplace enable competition, which can help to drive lower net costs for clients and make drugs more affordable and accessible for members. For example, since Basaglar, a follow-on biologic, was launched in 2016, the cost of Lantus – the reference product – has been steadily declining.1 In fact, biosimilars average a 30 percent reduction in average sales price (ASP) compared to reference brands’ pre-biosimilar ASP.2


Biosimilars could lower biologic prices through competition by $38B in the next four years3


Biosimilars can play a key role in reducing specialty drug spend as part of our lowest net cost strategy. CVS Health was the first pharmacy benefit manager to consider biosimilars for formulary placement in cases where they align with that strategy. Of biosimilars that have launched, we have several preferred biosimilars on our commercial template formularies. Once approved, we conduct new-to-market product reviews and ongoing evaluations to stay abreast of this evolving marketplace given its potential positive impact on drug costs.


CVS Health management approach

Monitor and negotiate

Proactive trade strategy to negotiate lowest cost inclusive of rebates and biosimilars to support competition that lowers prices

Strategic tools and engagement

Coordinated approach to implement your preferred drug strategy and pull-through drug list changes as they occur

Help enforce your chosen strategy at the time of PA through Novologix technology and via Formulary

Optimize provider engagement and reimbursement

Report and analyze

Strategic plan design options to help mitigate spend

Trade and formulary strategies


Biosimilars to Humira

Currently the marketplace is anticipating the 2023 launch of several biosimilars to Humira, one of the world’s best-selling drugs.4 Humira can have a significant impact on payors’ specialty drug spend: Prices have increased consistently since the drug entered the market almost two decades ago; the average annual cost per patient currently exceeds $77,000.5

In 2020, Humira sales in the United States totaled $16 billion.6 This is partly due to expanded indications for Humira – including Crohn’s disease, ulcerative colitis and pediatric ulcerative colitis – which, while providing additional therapy options for patients, contributes to rising drug spend overall.

Although seven biosimilars to Humira have received FDA approval, none are currently available in the United States.

These are expected to have market launches in 2023:

  • Amjevita from Amgen, approved 2016
  • Hyrimoz from Novartis/Sandoz, approved 2018
  • Hadlima from Merck/Samsung Bioepis, approved 2019
  • Abrilada from Pfizer, approved 2019
  • Hulio from Biocon/Mylan, approved 2020
  • Yusimry from Coherus BioSciences, approved 2021
  • Cyltezo (adalimumab-adbm) from Boehringer Ingelheim, approved 2017 (interchangeable)7

Two other biosimilars to Humira are pending FDA approval and also may enter the market in 2023:

  • adalimumab from Alvotech/Teva (potential for interchangeable designation)
  • Yuflyma (adalimumab) from Celltrion

Cyltezo received FDA approval as the first interchangeable biosimilar to Humira in October 2021. Per FDA guidance, not all biosimilars are interchangeable with the reference product, meaning that substitutions can be made by a pharmacist without the intervention of a health care prescriber (where state laws permit). Interchangeability will be a factor in how the category and new entrants will be assessed.


Innovation, experience and strategy

We are prepared for these market changes and will continue to manage to lowest net cost for our clients. In the autoimmune class, we have been using our innovative indication-based formulary design as well as the foundational utilization management provided by Specialty Guideline Management and Specialty Quantity Limits. This has supported starting therapy with certainty, a key part of our integrated approach to specialty cost management.

Our approach to maximizing the savings potential of biosimilars is to utilize competition to help drive the lowest net cost for payors. We may do this by encouraging uptake of the biosimilar as the lower-cost alternative or by utilizing the biosimilar to negotiate a lower net price for the reference brand.

Our formulary plan design is to prefer the lowest net cost product regardless of whether it is an originator or biosimilar. In 2017, CVS Caremark was the first PBM to begin considering biosimilars for formulary placement and will continue to do so to help clients better manage and contain drug spend.

For clients who choose one of our template formularies, new biosimilars may be subject to a new-to-market block (NTMB) upon launch and are unblocked only after a range of factors including price and clinical review are considered.


1. New-to-Market Review
coverage of new drugs blocked pending review

2. Utilization Management
Helps ensure therapies are cost effective and clinically appropriate

3. Formulary Management
Designates the most cost-effective options as preferred agents

4. Pipeline Protection
Modeling of newly launched drug helps predict costs; review informs formulary status and UM criteria


With biosimilars, as with all medications, our lowest net cost strategy applies.


We’re involved in proactive discussions on how new biosimilar options may impact our clients in the future. These conversations are informed by our proven track record of achieving lowest net cost through effective negotiations with manufacturers.


These examples illustrate our varied formulary approaches driving to lowest net cost:

Prefer the biosimilar. When Zarxio, a biosimilar for Neupogen, was launched, CVS Health executed a proactive trade strategy to negotiate the lowest cost, then implemented a formulary strategy preferring Zarxio. This approach was very successful in enabling member adoption. In fact, commercial client utilization of Zarxio went from less than 5 percent to over 90 percent in just one year.

Co-prefer the brand and generics. By contrast, for the specialty multiple sclerosis medication Copaxone, we have co-preferred the brand and generics to drive the lowest net cost. This demonstrates the flexibility in our approach to prefer the originator brand, biosimilar/generic or some combination thereof while ensuring patient access to clinically appropriate therapies.

As more specialty products lose marketing exclusivity over the next decade, the increase in both biosimilar and generic competition will have a material impact on the cost savings we can achieve for our clients.


Whether the biosimilar product or its reference branded product represents the lowest net cost option, we can maximize the impact of competition to help drive down your specialty costs using our size, scale and strategy.