Why everyone's talking about biosimilars

Joshua Fredell, SVP, Pharmacy Services, shares insights on this biologic drug and why it matters. 

• Our history of innovation at CVS Caremark demonstrates that we are uniquely positioned to positively impact the market.

• Members feel supported when their prescription plan prioritizes affordability, and their biosimilars are backed by regulatory approval for safety and efficacy, Joshua notes. 

• "If we remain focused on driving to lower-cost products and using our technology to make that even easier for everyone involved, we will be able to maximize the savings potential that biosimilars provide," Joshua says.

Creators and Guests

Host

Matt McGuire

A lifelong writer, editor and content strategist. Senior Manager, Enterprise Communications, CVS Health

What is Big Questions Answered?

Big Questions Answered helps us understand important CVS Health initiatives by taking a closer look at new products, powerful innovations and the big changes the company is making to achieve its strategic imperatives and build a world of health around every consumer. The company's senior leaders answer big questions from host Matt McGuire.

Matt McGuire
In 2024, CVS Caremark became the first pharmacy benefit manager to remove Humira from its major commercial formularies and place biosimilars in a preferred position. Following this change, 95% of Caremark members switched to these biosimilars. This move helped Caremark clients save $1.5 billion to date, with 80% of members having $0 out-of-pocket costs. While the biosimilar industry has been around for years, it’s beginning to accelerate.

On this episode of Big Questions Answered, we’ll discuss what biosimilars are and if they’ve lived up to their promise of affordability and accessibility, how CVS Caremark shifted the market in terms of biosimilar adoption with the removal of Humira, and how our biosimilar formulary strategy continues to maximize savings and options for clients and their members with the introduction of two new preferred Stelara biosimilars on our formularies this past July.

Welcome to Big Questions Answered, a podcast that helps us understand the important initiatives at CVS Health. I’m Matt McGuire from the Enterprise Communications team. I’ll be your host as we take a closer look at new products, powerful innovations and the big changes we’re making to achieve our strategic imperatives and build a world of health around every consumer. Thanks for joining me today as we get our big questions answered.

I’m here with Joshua Fredell, Senior Vice President with CVS Caremark. In his role with the company, he oversees ideation, commercialization and management of the company’s pharmacy benefit and specialty management products, including formulary design, network products, specialty cost management, clinical solutions and medical benefit management.

Thanks for joining me today, Joshua.

Joshua Fredell
Thanks for having me. I'm looking forward to the conversation.

Matt McGuire
So, biosimilars are starting to get on people’s radar, but I’m not sure if they’re fully understood. Can you walk me through what a biosimilar medication is and how it works?

Joshua Fredell
I'd be happy to. To start, let's look at what happens before a biosimilar, which is a biologic drug. These are medications typically made from living sources. You'll hear people refer to them as large molecules. I mean, they're just kind of big at the chemical level, but they go through the FDA
[Food and Drug Administration] for review for safety and efficacy and they're typically what most people think of as a specialty drug. And oftentimes they are injected or infused, but there are new newer biologic drugs that are actually orals.

Over time, when those original biologic drugs lose their patent exclusivity, other manufacturers now can make similar versions and so we have a biosimilar — a biologic similar. Many people are probably familiar with this in the non-specialty or the non-biologic space when we think of a brand and then its generic version.

Biosimilars are not true generics and that can get a little bit more into the details. But do think of them in a similar way, where now they're the same product in terms of expect the same effectiveness, expect the same safety. The FDA ensures that that is the case with the biosimilar. And these products now are able to be made at a lower cost, which offers the opportunity for more affordable specialty or biologic drugs for both our client payors and their members.

Matt McGuire
Yeah, that's helpful. And, so, what's the potential around biosimilars and have they lived up to their promise in terms of affordability and accessibility?

Joshua Fredell
Great question. I mean, the potential is really around affordability. These drugs, biosimilars, are not saying that they're more effective or more safe than the original reference brand or reference biologic, but they do hold the potential to be a lot less costly. And have we seen that? I would say yes and no.

We've seen biosimilars come to the market at higher price points. So, price points that are very similar to the original brand that they are a biosimilar of. But we are seeing biosimilars come to the market, and thankfully more of them now, coming at a much lower price point. So, they are beginning to live up to the potential of offering a much more affordable option for these original specialty brand drugs. And these biosimilars are coming to market for conditions that quite honestly are fairly common or a higher used in today's market — things like rheumatoid arthritis, psoriasis, psoriatic arthritis.

We're seeing biosimilars for drugs that are used to help support patients who might be going through cancer treatment and other conditions. So as more come to the market, they come to the market at that potential for lower price or more affordability, they are going to begin to deliver on the hope, I think, that many of us have, which is helping us have an ever more affordable and accessible pharmacy benefit.

Matt McGuire
So, in 2024, CVS Caremark became the first pharmacy benefit manager to remove Humira from our major commercial formularies and place biosimilars in a preferred position. Can you explain why this was such a big deal and share what the reaction and results have been from both CVS Caremark members and payors like employers and health plans?

Joshua Fredell
Absolutely. Before I speak specifically to Humira, one thing I do want to share is, while Humira was maybe the first one, if you will, on the map, one that many people noticed because of the common use of that that drug, Humira. We've seen biosimilars come to the market for other medications multiple years prior to Humira. And I share that just to say, you know, we here at CVS Caremark have experience and have a lot of experience around biosimilars in using the various tools and capabilities that we have as an organization to see the best use of those biosimilars.

Some of the products that have launched as biosimilars earlier are to less common drugs and or to drugs that are typically seen through the medical benefit versus the pharmacy benefit. But I wanted to start there to say we're really building on a track record of experience at CVS Caremark in general, but also specific to biosimilars, when we made our move in 2024 around Humira.

Now specific to Humira, you're right, it was a big move and a big decision. The bigness, if you will, comes from a few reasons. One, Humira at that time was, if not the No. 1 used drug from a spend perspective. If it wasn’t No. 1 for our clients, it was definitely in their top five list. This was a highly utilized, expensive medication for the vast majority of our clients. And so to have the opportunity to see that utilization move to a lower cost biosimilar was that big potential.

What we also were seeing in the market is just because a biosimilar is available in the market does not mean it's used a lot. It it basically it does not mean doctors were prescribing it to a high degree nor were members using it, which then leads to the question then what does the market need? What needs to happen to see greater use of the biosimilar in an opportunity like with Humira and what we saw was it requires something that CVS Caremark as a PBM, right, as a pharmacy benefit manager, is uniquely positioned to do. We were able to make a change to our formularies, essentially removing the reference brand Humira, preferring these lower priced biosimilars. And through that and a number of other things I can share about later, we were able to now see significant use of the biosimilars. When I mean significant, I mean 95% plus of those using this product then were using the biosimilars because of our formulary change.

And what did that mean? It meant for our clients, those who are paying the bulk of the pharmacy expense, so far to date we've helped save them over $1.5 billion — and that's billion with a B — in terms of their gross spend on this one product.

For members, many of them also saved out of pocket. In fact, we see today about 80% of members on the biosimilar are actually paying as low as $0 out of pocket. So, in terms of your opening question, what's the big potential of biosimilars? The big potential is driving savings in through the lower the price point of the Humira biosimilars, coupled with the actions we took as CVS Caremark, are helping realize that type of savings for both paying plans and clients as well as their members.

Matt McGuire
Wow, those are some pretty impressive numbers. So, you've definitely touched on this a bit, but I'm curious, like how has this shifted the biosimilar market in terms of adoption then?

Joshua Fredell
Yeah. So, it's done a couple things. One, it actually communicates to the manufacturers in the market of biosimilars that there is a market for their products. That they should be, if you will, incentivized to invest in the innovation to bring new biosimilars to the market. Because when you have of a well-aligned product to formulary, to price points, etc., you can see significant use. So, that's I think that's one thing that's helped do with the market.

Second, it shows we are rallying around these lower list-price products. There's a lot of ways to lower prices for plans and members. We at CVS Caremark do that exceptionally well. But one of the best ways and somewhat simplest ways for today's market is to see that happen around lower-list price products. And when biosimilars come to the market that way, they have a chance to be successful in the market. We saw that with Humira, and I believe we will see that with future biosimilars as well.

Matt McGuire
So, in July, we introduced Pyzchiva and Yesintek to our formulary and their biosimilars for Stelara, which patients use to treat autoimmune conditions such as psoriasis. I'm curious, how are things going now that we're a little way in?

Joshua Fredell
This is, this is kind of like chapter two of the bigger pharmacy drugs to see biosimilar competition. To take a step back, you know Humira and Stelara are in the same overall drug class. They are autoimmune drugs as you mentioned. These drugs are used to treat a number of different inflammatory conditions, rheumatoid arthritis, psoriasis, there's GI (gastrointestinal) conditions, etc. So, in in the autoimmune category is by far the No. 1 or No. 2 most costly drug class for most of our clients. So huge potential for savings for plans that we're continuing to see because of biosimilars coming to the market for these drugs. In terms of Stelara, in our July 2025 decision to add biosimilars to our formulary, we're following the same playbook we used with Humira. With Humira, we actually added biosimilars first, so our formulary had both the lower price biosimilars and the reference brand Humira on our formulary. And then at a later time when the market was ready in terms of supply and certainty etc., then we were ready to make a change to our formulary to remove Humira. With Stelara, we're kind of in that earlier part of the playbook. We've added biosimilars to the market. Both Pyzchiva and Yesintek are lower list price products, so physicians and members that choose to use those are creating savings already. And when the market is right, we'll also evaluate this and decide we make a formulary change for Stellara, the reference brand as well.

Matt McGuire
Wow, that’s great to hear how Pyzchiva and Yesintek are already creating savings. So, Joshua, how have CVS Caremark and CVS Health been critical to biosimilars’ success?

Joshua Fredell
Yeah, the experience not only with Humira, but the earlier biosimilars I referenced earlier and I expect we'll see the same with Stelara is it really requires a few things for a strategy around biosimilars to be successful. I mentioned a really important one and that's formulary. Biosimilars need to be added to the formulary. Sometimes you may need to take the step to remove the reference brand like we did with Humira back in 2024. But it goes beyond that. When you're making changes like that, physicians and members, if you need to know about it, they need to have confidence in those products.

When I look back on our decision to remove Humira from our formulary last. That was coupled with education done with prescribers. So, they knew what was available on the formulary, they had confidence in those biosimilars. It was also done with communication to members. Tools offered by our specialty pharmacies. So CVS Specialty pharmacy did extensive job to make sure members understood the change, understood the new product.

We need to think about selecting the right products for our formulary. These drugs, as mentioned earlier, are biologic products. There's complexity to them, both in terms of not only what is the drug treating, but does the biosimilar offer the same strength, the same formulation, even the same device type. You imagine a patient with rheumatoid arthritis that might affect their hands. Being able to have a device that they can hold with confidence, that they could administer to themselves with confidence, is really important to make sure they get the best efficacy and safety out of the medication. So, just being an organization that reviews and considers all of those things also became really important.

And then finally, when you make a change using technology. We use technology in a really unique way to make the process of changing from the original brand to a biosimilar as easy as possible for both the prescribing physician and for the member. It was the combination of those of those items that I believe is what led to that 95% success rate in use of the biosimilar. And that's what led to the, you know, the billions of dollars of savings that we've created for our customers already today on that one product and we look forward to doing with more and more products as we see more biosimilars come to the market in the future.

Matt McGuire
That's great. So, Joshua, to wrap things up, could you take a look down the road and tell me what's next for our biosimilar strategy?

Joshua Fredell
What's next is really building on this continuing strengthening foundation we have that's tied to our commitments to do a couple things. We have been and will continue to be just very much focused. How do we how do we best manage spend. Making sure our our clients and their members when they're paying money for medications, they're they're getting the most out of it and they're using the most cost-effective drugs. And we do that exceptionally well as a PBM at CVS Caremark and we will continue to build upon that focus with future biosimilar products.

And even outside the biosimilars, if it's lower cost brands, traditional generics, we will continue to put the focus on those medications because they're the most cost effective. Simply meaning you're getting the best results for the lowest amount of cost both to the plan and the member.

We will also continue to invest in technology. When we make changes of any type, including making a move to a biosimilar, we want that to be with an exceptional experience for the member, for their prescriber and the pharmacy that's dispensing it. Oftentimes that gets to be us as specialty pharmacy or a CVS retail, but we want to do the same no matter what pharmacy a member's using. So, we want to make that experience easy.

If we do those two things, remain focused on driving to lower cost products, use our technology and make that ever easier for all who are involved — member, physician, pharmacy — we will continue to be able to really maximize the savings potential that biosimilars provide, and when plans can save money there, they can reinvest that savings into investing in other things in their benefit designed to support their members. And that's exciting for us to be a part of.

Matt McGuire
Absolutely. That sounds like a bright future ahead. Joshua, thank you for stopping by today. I’ve had a great time talking with you.

Joshua Fredell
Thanks, Matt. I appreciate it.

Matt McGuire
And a big thanks to you for tuning in to this episode. Until next time, I'm Matt McGuire. I look forward to joining you again to get more big questions answered.