Opinion
Video
Biosimilar Pricing Strategies: Understanding High-WAC and Low-WAC Models
Panelists discuss how biosimilar manufacturers offer both high-wholesale acquisition cost (WAC) and low-WAC product versions to navigate complex reimbursement landscapes, sharing their experiences with low-WAC options on formularies, defining private label agreements as strategies to improve biosimilar access across different patient populations, and examining the rationale behind PBMs' (pharmacy benefit managers) implementation of these agreements, including their specific components and benefits.
Biosimilars Pricing Strategies and Private Label Agreements: A Summary for Physicians
Dual Pricing Strategies for Biosimilars
Manufacturers of biosimilars often offer both high-WAC and low-WAC versions of their products for several strategic reasons, including the following:
- To navigate the complex reimbursement landscape across different payer segments
- To balance market access with revenue optimization
- To compete effectively with reference biologics in both hospital and outpatient settings
- To address varying formulary placement requirements across health care systems
Institutional Experience With Low-WAC Biosimilars
Health care institutions implementing low-WAC biosimilars on formulary have observed the following:
- Significant cost savings that can be redirected to other aspects of patient care
- Improved patient access through reduced out-of-pocket expenses
- Simplified reimbursement processes in certain settings
- Potential challenges with payer preferences that may not align with the lowest-cost options
Private Label Agreements: Definition and Benefits
Private label agreements are specialized contractual arrangements in which:
- A biosimilar manufacturer partners with a specific payer or PBM
- The biosimilar is marketed under a unique national drug code specific to that partnership
- Preferential pricing and access terms are established for specific patient populations
- These arrangements improve biosimilar access by creating tailored solutions for different insurance types and patient demographics
PBM Implementation of Private Label Agreements
PBMs are increasingly utilizing private label agreements for biosimilars due to the following:
- The ability to negotiate more competitive pricing terms
- Enhanced formulary control and consistency
- Improved predictability in medication spending
- Potential for developing integrated care models that include biosimilars
- Opportunities to create value-based arrangements tied to patient outcomes
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