Will Biosimilar Rebates Pass-Through?

Health plan sponsors must be aware of the language in the rebate pass-through provisions in their contracts with pharmacy benefit managers (PBMs).

In this installment of "Questions you should ask your PBM," I explain why it's critical to understand what your contract says!

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Transcript of Will Biosimilar Rebates Pass-Through?

2023 promises to be a huge year for biosimilar specialty medications. Humira, the world's biggest blockbuster drug, has officially lost its patent protection. And in January, we saw the first of its biosimilar competitors hit the market. At least seven others are expected to follow for this drug alone. Now the hope is that these and other new biosimilars will help bring some much-needed price competition to high-cost specialty drug classes.

But unlike the oral generic market, specialty biosimilars are expected to generate massive rebates.

Now, here's the catch for plan sponsors. In anticipation of this biosimilar boom, many traditional PBMs have quietly inserted language into their client contracts, specifically excluding biosimilars from their rebate pass-through provisions.

So while your contract may say that you'll receive 100% of rebates, the fine print may specify that biosimilars are excluded from that. Meaning that the PBM could retain some or all of the rebates attached to those biosimilars.

So here's a question that you should ask your PBM today:

Can you show me the language in my contract that guarantees a full pass-through of all of the rebates and manufacturer revenue associated with biosimilars?

If your contract isn't explicit about the pass-through of biosimilar rebates, then your PBM may be planning to pocket some of those rebates to pad their profitability.

Stay tuned for future videos with more questions that you should ask your PBM today!

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