In reviewing the year that was, the most important events were the things that did not happen.

In early 2019, significant time was spent across the industry trying to understand the likelihood and implications of removing the safe harbor for rebates. This proposal was rescinded by the administration in early July, and the industry largely went back to business as usual. What appears to have been forgotten is the motivation to create a more equitable and transparent system. “Equitable” in the sense that those patients using high-cost specialty drugs, which generate significant rebates, should perhaps have a reduced cost share. While the rebate value is often used to reduce premiums, this is little comfort to those paying high out-of-pocket costs. Transparency is an overall complaint about health care, but it resonates particularly in the area of rebates and drug pricing. Commercial efforts to address some of these issues such as CVS’s Allure formulary offering and ESI’s National Preferred Flex Formulary have received very little attention since the proposal was withdrawn.

Staying within the policy space, it appeared that there was some bipartisan support for healthcare legislation with the expectation that drug pricing would be included. Proposals from the Senate and the House were in play, and it was reasonable to assume that one, or a combination of the two, would be voted on. At that point, the impeachment inquiry began and discussion about healthcare legislation evaporated. The expectation at this time is that no major legislative initiatives will be given serious consideration until after the 2020 election. Politicians of both parties should recognize that addressing the issue of drug pricing is one of the more important topics for many Americans. As an industry, we should not lose sight of this fact either.

On the subject of drug pricing, there have been hopes that biosimilars would provide some relief. At this time, there are 23 approved biosimilars and about half are being marketed. We have final guidance from the FDA regarding interchangeability and support for the use and development of more agents. Despite this, we have not yet reached a tipping point for biosimilar uptake. The consensus in the market appears to be that biosimilar manufacturers have not provided deep enough discounts and that the innovator products are taking strong measures to prevent the uptake of the biosimilars. It is understandable that a payer may be unwilling to sacrifice an overall lower net cost position, ie, innovator with significant rebates, but it should also be kept in mind that the biosimilar industry needs support to ensure continued development and robust competition. It is important to view this as a long-term effort for cost savings, and both payers and manufacturers need to work harder to ensure biosimilar viability.

So it was a year when many important events, quite frankly, didn’t happen. It is incumbent on us to continue to address these areas in the coming year.