Biosimilars & Originators – What’s the Link?

The Centers for Medicare & Medicaid Services (CMS) issued a new guidance on biosimilar reimbursement on March 30, 2015 was needed based on FDA approval of the biosimilar Zarxio™ (filgrastim-sndz). The guidance describes the Medicare Part B reimbursement for biosimilars.

Reimbursement for drugs provided through Medicare Part B Example Biosimilar Medicare Part B Reimbursementuses Average Sales Price (ASP) as the cost basis plus a markup. Since biosimilars are expected to have lower prices than the originator, Medicare is expecting to save money with biosimilars. The challenge seen by providers is that with a lower ASP for the biosimilar, the markup provides the same percentage but a lower dollar value margin than the originator. The incentive for the provider is to use the originator product with the higher dollar markup.

The CMS guidance changes this incentive by making the biosimilar reimbursement use the biosimilar ASP but the originator ASP markup. This keeps the markup the same and incentivizes the use of the lower cost product.

It may sound easy, but how do you add the markup factor from one drug to another? With only a few biosimilars, this could certainly be handled manually. As more and more biosimilars launch, this will be a daunting task. All the more reason for the drug compendia to group the biosimilar with the originator. The drug compendia will most likely try to fit the biosimilars into their current groupings. Even if the compendia don’t link biosimilars to the originator product using the current methods, they may be influenced to add a new biosimilar specific linking mechanism.

Future Challenges

Thinking ahead, when will CMS release the next guidance to account for the scenario that the originator has exited the market and only the biosimilar(s) are left? Without the ASP from the originator, the provider markup could change to the biosimilar ASP. This scenario may not be required for years.

PHSI experts understand the drug compendia and the impacts on pharmaceutical manufacturers, PBMs, and pharmacies. The expectations for biosimilars are uncertain but will become clearer with additional guidances expected in 2015. Please contact us to discuss the biosimilar impacts and challenges you are experiencing or expecting.


Price Changes of Hydrocodone Combination Products

Following a scientific review of hydrocodone combination products that began in 2009, the FDA recommended in December 2013 that the DEA reclassify these as Schedule II Controlled Substances. The DEA ruling was published August 22, 2014 and rescheduling of hydrocodone combination products took effect on October 6, 2014. For retail pharmacists, this is old news. By now, problems such as patient and physician education of the changes have been recited hundreds of times, and pharmacists have learned to comply with the stricter DEA schedule.

Six months after rescheduling, PHSI looked back to see what effect this had on the pharmacy cost of hydrocodone combination products. Our findings show that the rescheduling of hydrocodone containing products did result in increased pharmacy costs for three common strengths of these products. Manufacturer published prices began to increase approximately one week before the rescheduling. While the published AWP and WAC increased by 25%-35%, the pharmacy acquisition cost per tab doubled between October 2014 and December 2014. At a time when many generic drug prices are increasing rather than decreasing, this is not a surprise. Pharmacies now pay wholesalers and manufacturers more for hydrocodone combination products to cover higher costs of storage and reporting, and possibly with the concern of a lower volume of sales due to the Schedule II classification.


Retail Pharmacy Clinical Services – Decision Criteria

Retail pharmacy is innovating by expanding clinical services. To obtain the best results, the clinical service implementation should be thoroughly evaluated. Listed below are suggested questions to use when evaluating the introduction of new retail pharmacy clinical services.




  1. Is there evidence based studies that estimate the ROI for the provision of the clinical service? If yes, what is the expected ROI and payback time for the service? If not, what are your expectations for an ROI and the rationale?


  1. What is the timeframe for the expected benefit to be realized? If the benefit realization is delayed, when will it be realized?


  1. Does the potential service fit into the retail pharmacies relationships with their payers? If yes, how can the services be leveraged by working with the payer?


  1. Do we have the capabilities today to perform the services? If not, how do we assess current staff competency and training needs? What resource(s) should provide the clinical service? Can technicians be used to reduce the cost of providing the service?


  1. What other professions/organizations are providing a similar service today?


  1. How will the results be measured? Do we have the systems in place to track outcomes? Is the data readily available today or will programming be required? Who will be responsible for pulling and analyzing the data?


  1. What patient population will be targeted? Is the population growing, staying the same or decreasing? How can we identify/segment the patient population? Can we further risk stratify this patient population to prioritize service delivery?


  1. Does the clinical service focus on patient engagement, is evidence based, and cost effective execution/implementation? If yes, describe in detail. If not, why should this service be implemented over other potential clinical services that could be offered?


  1. Does the clinical service fit into the one of the new reimbursement models of healthcare? Accountable care organizations, patient centered medical home model, etc.? If yes, do we have relationships with these entities? If not, can we use this clinical service to open discussions?


Have you implemented a clinical service without answering these questions? How would the results have changed if you had considered these questions? What changes would you make to these questions and decision criteria?


Please send your feedback to PHSI through our contact page.

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PillFill App

PillFill is a medication management app that can pull healthcare information from a variety of sources and store it in one convenient location on the user’s phone. Prescription medication information can be collected from any pharmacy that supports online medication histories. These include major chains such as CVS, Walgreens, Rite Aid, and Target. The app can also pull medication history from Express Scripts and Caremark. If a user has a prescription that is not found on any of these accounts, it can be easily added to the profile manually with the use of a barcode scanning tool within the app.

The app is intended for anyone looking to organize and manage their medication regimen. It would be particularly useful to patients with chronic disease, who are likely taking multiple medications and utilizing multiple doctors and pharmacies. This app may also be a good tool to improve medication adherence, as the user is able to set reminders about refills and daily doses.

Once the medication profile is complete, the user can select any one of their medications to view contact information about the prescribing doctor or the dispensing pharmacy. Manufacturer information regarding the product is also accessible through the medication profile. The user has the ability to check for any drug interactions with an OTC product by simply scanning the UPC code found on the package. Safety notifications such as drug interactions, duplicate medications, and duplicate mechanisms of action are sent out to the user. While this is a useful tool, there are potential drawbacks. It is easy to envision a scenario in which a patient, on a complex medication regimen that may be flagged for such interactions, abruptly stops taking their medication upon receiving a warning without first consulting a doctor or pharmacist. Fortunately, there are disclaimers stating to contact a doctor or pharmacist, and this was likely one of the reasons developers included contact information for a user’s care team. Having said that, the possibility of the above scenario is not enough to recommend against using the app. PHSI believes that if the user is able to realize that the app cannot replace real world expertise available through doctors and pharmacists, it should be a helpful tool for anyone wanting to have a more active role in their health care and in the management of their medications.

PillFill is free to use and compatible with Android or iOS devices. More information and links to download are available at


Glooko is a cloud-based mobile system incorporating an app to allow for data from blood glucose meters, fitness monitors, and manual input to be evaluated in a single program. The system has been FDA 510(k) cleared and is HIPAA compliant, but is not yet available for purchase. Once marketed, the system will be available for patients, providers, payers, and caregivers to use in diabetes control. The cloud-based system, MeterSync Blue, connects compatible blood glucose meters to mobile devices. The Glooko system was designed to be compatible with over 30 different glucose and fitness monitors.

Some features of the app include:

  1. Compatible with Apple and Android products
  2. Remote monitoring of activity level, weight, blood pressure, glucose, etc.
  3. Food/ carbohydrate counting and exercise input
  4. Insulin and medication tracking
  5. Compatible with Accu-Check, Free-style, One-touch, and more

Patient Use: Gives patients with diabetes the ability to sync glucose tracking to a mobile device, add fitness tracker data, input food/carbohydrate intake and medication, and share reports of data with physicians.

Provider Use: Allows providers remote monitoring of patient’s disease state, medication compliance, glucose levels and lifestyle data in order to make interventions. This helps promote improved patient-provider communication.

Payer Use: Presents risk stratified diabetes data and analytics to target earlier treatment in members with diabetes control out of range.

Glooko and the MeterSync system allow for better access to patient disease state information, potentially improving disease state management and adherence. A pilot of this system was done at the Boston Joslin DM Center and showed improvements in diabetes management, specifically hypoglycemia. PHSI believes the integration of FDA approved devices such as Glooko will augment prescription medication usage and help support healthy activities leading to improved patient outcomes. Once marketed, Glooko can allow for better engagement of the healthcare team to improve diabetes control. Drug Information Database is a new drug information database that is accessible to the public and combines clinical information with patient reviews of medications. Time magazine is quoted as saying the website is “the Yelp of medicine”.

After a thorough review of we have come up with some positives about the website, and some areas for improvement.


  1. The information that is presented on the website is clinically accurate.
  2. Information is provided in a patient friendly format at an appropriate reading level.
  3. Stories of encouragement from patients who are currently using the medication are included. An example is patients taking metformin offer clinically appropriate tips to reduce the incidence of GI upset, such as taking the larger dose of medication at night or drinking more water with each dose.

Room for improvement:

  1. When you look up a medication the first screen that comes up says “How people feel about (selected drug name)”. It then goes on to give statistics of surveyed patients in the categories of: Is the drug worth it overall? How well does the drug work for you? Is the drug a hassle? Unfortunately, the website does not offer any comparison to what happens if the disease is left untreated. Drugs with major side effects may have low patient scores even if clinically effective. The way the information is presented seems like a recipe that promotes non-adherence. Without scaring patients it is important to show the clinical benefit offered by drug therapy.
  2. The website lacks information on the disease state each medication is used to treat. Showing the risks and disease progression for untreated patients compared to the benefits of drug therapy would provide a clear message that the drug is helpful and there may be some side effects that must be dealt with.
  3. There seems to always be a “but” associated with statements on the website. For example, it says “metformin is a very effective medicine to lower blood sugar and the risk of complications and death from diabetes, but it’s likely to cause diarrhea for the first few weeks.” Although the part about diarrhea is true, it is another emphasis on reasons patients may not start or stop taking medications.

Pharmacists are the medication experts and patient counseling should be individualized to help patients meet their treatment goals. No website will replace this interaction, but rather help supplement it with medication related information. If a resource causes confusion or potential non-adherence it should direct patients to discuss the information with their pharmacist or physician. Sharing patient experiences with a drug on may better prepare future patients to conquer challenges related to the specific medication. Like any other customer reviews, these need to be carefully considered and not be the primary focus for determining therapy.

Healthcare professionals are always looking for ways to provide their patients with accurate and easy to understand drug information. is on its way to becoming the type of resource physicians and pharmacists can direct patients to, but it cannot be at the risk of non-adherence to essential medications. is a certified National Association of Boards of Pharmacy e-Advertiser program which makes it even more imperative to provide the full scope of medication information.


PHSI was introduced to the RxOrange App through a comment on another post about brand drug patents and generic launch. RxOrange provides details from the FDA Orange Book in the convenience of a mobile app. The App is available for purchase ($3.99) on Apple’s iPhone, iPod touch and iPad.

The home screen of the App starts on a drug search and scroll screen. Any drug in the FDA Orange Book is available. When you find the drug, selecting it displays the drug, manufacturer, and any pharmaceutically equivalent product (both brands and generics). You can continue to drill down to find the strengths and dosage forms, route of administration, therapeutic equivalence code, the approval date, and some information about patents and exclusivity. This information is based on a data file from the FDA that is updated monthly.

The bottom of the screen always offers 5 areas to find information.

1. Drug Search (where you start and find what was described above)
2. Patent Expiration (a list by date of potential brand drug patent expirations when generics may be expected)
3. FDA Approvals (a list by date of FDA approvals that can be searched, or filtered to display only brands or generics)
4. Special Topics (a handful of drugs where substitution or drug classification may be difficult to determine)
5. Info (general info about the App and the supporting sources)

Once you download RxOrange, you do not need an internet connection to access the data because it is stored on your device (19.2mb installed size). You will need an internet connection to update the device with new data. This App is dependent on data from the FDA so new generics and new brands will not be in the App until the next monthly update. There are also some products that are not included in the FDA Orange Book (i.e. Enbrel, Humira) that will not be included in the App. RxOrange does not contain drug information such as side effects, dosing, or drug interactions. PHSI believes that if you find yourself regularly utilizing the FDA Orange Book to find therapeutic equivalence, drugs and their manufacturers, and potential new generics, RxOrange would benefit you with portability of this data.

Glucose Buddy App Review

The Glucose Buddy App is a data storage utility developed by Azumio Inc. for diabetic patients. This app is available for free on any iPhone, iPad, or iPod touch product with iOS 4.0 or later, as well as all Android devices. This mobile app easily keeps track of the blood glucose readings that are manually recorded from the user’s glucose monitor. It even allows users the option to enter productive notes such as “blood sugar elevated because of high carb lunch” so that their personal health record is more complete.

This diabetic app also gives users the option to record the name and dose of their medications, along with the corresponding time they were taken each day. Once a drug/dosage combination is entered, it is saved so that users must only select the medication from their list of previously entered products. Additional free features provided by this app include daily food, activity, and HbA1c logs, as well as charts that compare weekly and monthly log recordings. Another helpful feature is the ability of the app to send out push notifications in order to provide users with reminders and alarms when it is time for blood glucose testing and/or medication administration. A more advanced “Pro” version of this app is available for purchase at $6.99, which includes additional log options for blood pressure and weight and eliminates in-app advertisements.

Glucose Buddy is an easy-to-use journal app specially individualized with each patient’s diabetic history. Users have the ability to print out their log results to bring with them to their doctor’s office by syncing the logs to their account and then accessing them online. One drawback is that the app relies heavily on the patient to record this data accurately, so failure to do so will result in incomplete data sets. To get started, simply download the app and then go online to create your free account. For more information on this app, please visit


Vaccines on the Go App Review

The Children’s Hospital of Philadelphia has released an app called “Vaccines on the Go: What You Should Know” to help parents have quick access to reliable information about vaccinations and the diseases they prevent. Not only does it go into detail about the vaccines, vaccine side effects, diseases, contagiousness of the disease, and timeline of the disease, but it contains a section dedicated to talking about vaccination safety. The vaccination safety section addresses concerns about vaccines such as risk of autism, vaccine components like thimerosal, and egg allergies. The app has videos that discuss the information found within the app, which may be helpful for those parents who have a low health literacy.

The app contains a vaccine schedule for children, teens and adults. For parents worried about the number of vaccines their child is receiving, there’s a section answering those questions. This app would be a great recommendation by the pharmacist or physician to parents who just had their first child, or had questions or concerns about vaccinations. If parents still had questions after using this app, there’s functionality to make a note to bring up to their doctor and the ability to email the Vaccine Education Center with questions.

Vaccines on the Go is full of valuable information, but there are a few limitations of the app. While the app provides a vaccine schedule, it does not provide a place for parents to record the administration date of a vaccine, which might be more useful to parents later on in their child’s life, as many parents lose immunization cards or fail to keep those records accessible.

This app is free for both Apple and Android devices. More information is available on the app’s website at


Brand Drug Patents and Exclusivity –Timed Locks on a Safe Analogy

Brand drugs in the U.S. have two main methods of protection from generic competition. 1) The U.S. Patent and Trademark Office protects innovation by awarding patents. 2) The U.S. Food and Drug Administration offers exclusivity protections.

The following analogy helps to illustrate the difficulty in predicting a generic launch date due to complex brand protections. Think of the brand drug as being protected by a safe. The door to the safe may Safehave one or more locks. Each lock has a timer that is counting down. Once the time runs out on the lock, it opens and remains open. Those locks represent the patents and exclusivities that protect the brand from generic competition.

There are two main scenarios for this analogy. First, without doing anything, all of the locks will open automatically at some point in the future. Generic drug manufacturers could wait for all patents and FDA exclusivity to expire. For the opportunists and/or impatient, actions can be taken to open the safe early instead of waiting.

To open the safe early, you must have certain capabilities in picking locks (proving invalidity or non-infringement in a Paragraph IV challenge). The type of lock (a patent protecting an indication vs. a patent protecting a dosage form) must be taken into consideration. Some locks (exclusivities and patents) are very advanced and essentially unable to be bypassed in the time remaining before it opens automatically (expires). Other locks are easily “picked” once you have the basic knowledge and capabilities.

Each brand drug will have a unique combination of patents and exclusivities that may have varying expiration dates (timed locks). Beating a patent (picking a lock) on one drug may or may not help you with future patent challenges. All of these factors demonstrate why it is so difficult to predict a generic launch date.

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