The Food & Drug Administration (FDA) recently approved the first interchangeable biosimilar insulin product: the insulin glargine-yfgn injection from Viatris. Read the FDA’s press release.
Alas, I’m sad to report that the warped incentives baked into the U.S. drug channel will limit the impact of this impressive breakthrough.
Viatris is being forced to launch both a high-priced and a low-priced version of the biosimilar. However, only the high-list/high-rebate, branded version will be available on Express Scripts’ largest commercial formulary. Express Scripts will block both the branded reference product and the lower-priced, unbranded—but also interchangeable—version. Meanwhile, Prime Therapeutics will place both versions on its formularies, leaving the choice up to its plan sponsor clients.
Consequently, many commercial payers will adopt the more expensive product instead of the identical—but cheaper—version. As usual, patients will be the ultimate victims of our current drug pricing system.
Below, I explain the weird economics behind this decision, highlight the negative impact on patients, and speculate on what this all could mean for biosimilars’ future. Until plan sponsors break their addiction to rebates, today’s U.S. drug channel problems will remain.
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