Blue Shield of California Slashes Cost of World's Best-selling Drug

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• Nonprofit health plan collaborates with Fresenius Kabi and Evio Pharmacy Solutions to purchase FDA-approved Humira biosimilar for $525 per monthly dose, compared to the market reported net price of Humira at $2,100.
• New drug available for most members at $0 co-pay starting January 1, 2025 when Blue Shield launches Pharmacy Care Reimagined model for its commercial customers

OAKLAND, Calif., Oct. 1, 2024 /PRNewswire/ -- Blue Shield of California today announced it has drastically cut the price it will pay for an FDA-approved biosimilar of blockbuster drug Humira – purchasing the medicine at a transparent net price of $525 per monthly dose, compared to the market reported net price of Humira at $2,100.

The innovative agreement with drug manufacturer Fresenius Kabi, an operating company of Fresenius, and Evio Pharmacy Solutions, which facilitated the deal, eliminates the excessive markups often found in a traditional pharmacy benefit manager model. Instead, Blue Shield's new Pharmacy Care Reimagined model allows the nonprofit health plan – among several other innovations – to provide its members with better access to biosimilar medications. Biosimilar drugs are FDA-approved for providing patients the same clinical effectiveness of a branded version -- at a significantly lower, transparent cost.

"We will no longer take part in a pharmacy system that is designed to maximize the profit of participants instead of the quality, convenience, and cost-effectiveness for consumers," said Paul Markovich, CEO, Blue Shield of California. "Every employer, health plan and payer should be asking – and challenging – their pharmacy benefit managers to offer clinically effective and lower cost alternatives at a transparent price. This is why Blue Shield decided to rebuild our pharmacy care system – so we can get medications to the right people, at the right time, at the right price."

The collaboration across Blue Shield of California, Fresenius Kabi and Evio Pharmacy Solutions marks the first time this unique business model has been used to bring a Humira biosimilar to market. Aligned incentives and removal of excess complexities among the three stakeholders unlocked the value of Fresenius Kabi's Humira biosimilar adalimumab-aacf in a system where adoption of these lower-cost alternatives has been limited due to supply chain obstacles.

Starting on January 1, 2025, most Blue Shield commercial members using Fresenius Kabi's adalimumab-aacf will pay $0 out of pocket. This collaboration will bring drug spend down while adherence for the medication is expected to go up, benefiting the overall cost of care and, more importantly, member health outcomes.

"Biosimilars are safe, effective, and essential to lower the cost of biologic medicines and improve their access to patients in the United States," said Pierluigi Antonelli, Fresenius Kabi president and CEO.  "Fresenius Kabi is pleased to provide this option to Blue Shield of California and their members. By simplifying the drug's path to patients, our collective goal is to make medicine more affordable and more accessible. This allows for prioritizing savings through overall lower net costs that can improve both premiums and patient out-of-pocket spending for their medication."

Evio Pharmacy Solutions facilitated the agreement that prioritizes low net costs and eliminates the traditional pharmacy benefit manager incentives that encourage higher list prices, resulting in high net costs and bigger profits for intermediaries. With a looming "biosimilar cliff" of multiple lower-cost biosimilar drugs about to enter the market, this move to transparent net pricing sets an important precedent and path forward for the rest of the market. 

"We are excited to continue the pharmacy transformation journey with Blue Shield of California, as our first health plan customer to participate in this new net price model," said Matt Seibt, head of pharmaceutical partnerships at Evio Pharmacy Solutions. "This offering will have a massive impact on reducing health care costs. Evio will continue to utilize our innovative contracting and operational model to craft additional biosimilar opportunities in the next few years." 

The Drug

Since being approved by the Food and Drug Administration in 2002, Humira has become a household name. And while the drug has helped many patients treat inflammatory diseases, like arthritis, Crohn's disease, ulcerative colitis, psoriasis, and more, it became one of the most egregious examples of inflated pricing and patent abuse in the pharmacy supply chain.

For over 20 years, the drug has been widely used by more than 300,000 Americans each year. After two decades of market exclusivity and $200 billion in sales, Humira's patent exclusivity expired in January 2023, allowing lower-cost alternatives – known as biosimilars – to become available. However, the price has not come down to the extent it should in a functioning market, limiting widespread adoption.

Blue Shield spends more on Humira than any other drug for its members, processing about 40,000 Humira prescriptions annually. So, an alternative option that is transparently priced, sustainably affordable, and clinically effective is needed to help provide relief from the fast-rising cost of health care.

"Humira has drawn scrutiny for its high and inconsistent pricing from both consumers and policymakers," said Matt Gibbs, vice president of pharmacy transformation at Blue Shield of California. "With our new low-cost alternative, Blue Shield offers a more affordable, yet equally clinically effective option to members and employers. This move continues our organization's path of transparency and transforming pharmacy care for the better."

Last year, Blue Shield announced its Pharmacy Care Reimagined initiative — a first-of-its-kind effort that unbundles the traditional pharmacy benefit manager's opaque drug supply model, bringing transparency to each part of the system. Today's biosimilar expansion is the latest example of this transformation work and the nonprofit health plan's efforts to reform the drug supply ecosystem. It also marks Blue Shield's continued collaboration with Evio Pharmacy Solutions as part of the health plan's broader initiative to ensure its members get easier, more affordable access to quality medications.

About Blue Shield of California

Blue Shield of California strives to create a healthcare system worthy of its family and friends that is sustainably affordable. The health plan is a tax paying, nonprofit, independent member of the Blue Shield Association with more than 4.8 million members, over 7,100 employees and more than $25 billion in annual revenue. Founded in 1939 in San Francisco and now headquartered in Oakland, Blue Shield of California and its affiliates provide health, dental, vision, Medicaid and Medicare healthcare service plans in California. The company has contributed more than $77 million to the Blue Shield of California Foundation in the last three years to have an impact on California communities.

For more news about Blue Shield of California, please visit news.blueshieldca.com. 

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SOURCE Blue Shield of California