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IBD Market Snapshot: Payers May Shift Preferred Products To Accommodate New Drugs

Multi-product players may be able to use bundled rebates for preferred formulary status and biosimilars offer a new competitive dynamic, but there is hope for novel therapies. Head-To-Head Studies Are Few, But Data Could Change Positioning.


A slate of new mechanisms are emerging in inflammatory bowel disease (IBD), and with new ulcerative colitis(UC) and Crohn’s Disease (CD) data and products emerging in the space, change may be coming to payer formularies dominated by anti-TNF antibodies and other biologics used as advanced therapies after patients progress on initial conventional therapies.

Companies that already have multiple IBD products on the market, including Humira(adalimumab) marketer AbbVie Inc., may be able to negotiate rebates in the US not just for a single UC or CD product, but for a bundle of treatments, giving them an edge in payer negotiations. Deep discounting may be required for single-product companies to gain preferred status for their new drugs on payer formularies, but as doctors and patients increasingly seek out novel treatments and as more head-to-head data emerges, there may be other compelling reasons for payers to view new medicines favorably.

“As specialty products, therapies for ulcerative colitis (UC) can be expensive and formulary positioning is paramount to product uptake, "Data monitor Healthcare noted in its UC disease analysis report, updated in September. Similar trends were noted in its CD report. “Payers are settled in vital contracts that lead them to prioritize broad immunology drugs Humira and Remicade. This has posed a high barrier to newer entrants to the market, which cannot compete in volume and rebates. Biosimilar and generic competition will further undermine the likely premium pricing of newer and pipeline products.” Humira biosimilars are set to launch in 2023.

For patients with moderate-to-severe UC or CD whose disease has progressed on conventional therapies, TNF inhibitors – including Humira and Johnson & Johnson’s Remicade (infliximab), which has several biosimilar competitors – dominate along with J&J’s interleukin-12 (IL-12)/IL-23 inhibitor Stelara (ustekinumab) and Takeda Pharmaceutical Co. Ltd.’s integrin inhibitor Entyvio (vedolizumab). Also, UCB S.A.’s anti-TNF Cimzia(certolizumab pegol) and Biogen, Inc.’s integrin inhibitor Tysabri are approved for CD, J&J’s anti-TNF Simponi(golimumab) is available for UC and oral JAK inhibitors – Pfizer Inc.’s Xeljanz (tofacitinib) and AbbVie’s Rinvoq (upadacitinib) – are cleared in the post-TNF inhibitor setting for UC. New entrants to the UC market include Bristol Myers Squibb Company’s oral S1P receptor modulator Zeposia(ozanimod) in 2021, while AbbVie’s IL-23 inhibitor Skyrizi was approved in the US this year for CD; Zeposia and Rinvoq are in Phase III for CD and Skyrizi is in Phase III for UC. Also in the pipeline for both diseases are Pfizer’s S1P modulator etrasimod, Eli Lilly and Company’s IL-23 inhibitor mirikizumab, J&J’s IL-23 inhibitor Tremfya (guselkumab) and Bristol’s TYK2 inhibitor Sotyktu (deucravacitinib).

IBD Drug Developers: AbbVie Leads The Pack

Among companies with active Phase II and III programs and approved (not generic) ulcerative colitis Crohn's disease drugs, AbbVie Inc. leads with five assets, followed by Johnson & Johnson, Pfizer Inc. Bausch Health Companies Inc. “I think we are at a point where in the next two or three years this IBD market can definitely shuffle a bit,” Phillip Yoo, director of market and financial insights at IPD Analytics, said in an interview with

Scrip. IPD Analytics looks at shifts in the biopharmaceutical competitive landscape to offer life cycle, pricing and reimbursement, brand and generic forecasts, and other insights to industry participants.

The Battle For Preferred Formulary Status

“Many payers do have in their clinical policy a requirement to try and fail conventional agents … but it doesn't seem like that's a very high bar to clear,” Yoo said. “Once that's sort of out of the way for patients who have already progressed from mild-to-moderate to moderate-to-severe then we get into the biologics and the JAK inhibitors and S1P inhibitors.”

Payer management of all of those options can be split into two categories: I.V. therapies, like Remicade and Entyvio, are covered by the medical benefit while injectable and oral therapies are covered by the pharmacy benefit.

For patients to access a treatment covered by the medical benefit, “payers are not requiring them to step through something on the pharmacy benefit prior to the medical benefit,” Yoo said. “So if they want infliximab, payers are not going to make them try Humira first before getting infliximab; it seems like they're kind of kept separate. What we have seen though is on the medical benefit payers are steering towards their preferred infliximab product, whether it be the brand or the biosimilar. And what we have seen in one or two payers is a requirement to try infliximab prior to Entyvio.”

Payers generally do not have preferences for medical versus pharmacy benefit products, he noted, but members of a health plan may have a preference depending on what percentage they have to pay out of pocket under the medical benefit versus a flat co-pay under the pharmacy benefit.

“On the pharmacy benefit, there is definitely more payer management in this space,” Yoo said. “These drugs are managed by their indication, so a drug that may be preferred for one indication may not be preferred for another.”

For instance, Cimzia has preferred status on the Cigna formulary, but Crohn’s disease patients must try Humira or Stelara first before they access UCB’s TNF inhibitor. “But it's the preferred product for non-radiographic axial spondylo-arthritis for Cigna, so it's very confusing because Cimzia is preferred on the formulary, however, it's behind a step in Crohn's but not behind a step in another indication,” Yoo said.

All of these steps and different levels of preferred status on payer formularies “are carefully and strategically done and orchestrated based on what we believe to be manufacturer rebates,” he noted. “These medications maybe quite costly and so the rebates help lower the net costs. And in this space, we have a few players that have multiple medications out there so we could see bundling of rebates and I think that plays a significant role here. So for AbbVie, we believe it's very likely that Humira rebates are bundled with Skyrizi and Rinvoq.” Yoo said J&J is likely to use similar rebate bundling strategies to secure and maintain preferred formulary status for Remicade, Simponi, Stelara and Tremfya as well.

AbbVie has said that it will work to ensure current formulary status for Humira after biosimilars of the best-selling anti-TNF hit the US market next year. (Also see "AbbVie Maintains US Humira Erosion Belief As 2023 Negotiations Near" - Generics Bulletin, 13 Jan, 2022.) However, members of Congress have called out AbbVie foranti-competitive conduct based on its intellectual property and bundled rebate strategies for Humira in the past.(Also see "FTC Urged To Investigate AbbVie’s IP Strategy On Humira" - Generics Bulletin, 20 May, 2021.)

J&J has been aggressive about using rebates, discounts and bundling to protect its Remicade market against biosimilars. (Also see "J&J Immunology President On Remicade, Inflectra And The Art Of Contract Negotiations" - Scrip, 11 Oct, 2017.) Pfizer wound up accusing J&J of unfair business practices for rebate bundling that it said led to preferred status for Remicade at the detriment of Pfizer’s Inflectra (infliximab) biosimilar. The two companies settled antitrust litigation related to the claims in 2021. (Also see "Pfizer And J&J Settle Remicade Antitrust Litigation" - Generics Bulletin, 22 Jul, 2021.)

Head-To-Head Studies May Help Positioning

Yoo noted that the preferred formulary status of established brands for IBD, including Humira and Stelara, does make it difficult for new products to get on formularies as first-line advanced therapies for UC and CD even when a drug’s label allows use in earlier treatment settings, like Bristol’s Zeposia. The S1P receptor modulator from BMS may have a bit of a leg up, however, because it was on payer formularies already as a multiple sclerosis treatment when it was approved for UC.

“In the future, if we're able to see updates in guidelines or more head-to-head studies that do indicate a preference for one drug over the other, I do think that these formularies, first and foremost, need to be clinically sound,” Yoo said. “They can't do anything that is at the detriment to the patients that's not clinically supported.… So we believe that if there's any changes in guidelines or more head-to-head studies are conducted and then they favor one product over the other, we may see these formulas shift a little bit in order to be more consistent with that evidence.”

Entyvio was boosted by the Phase IIIb VARSITY study versus Humira in ulcerative colitis, in which Takeda’s integrin inhibitor bested the AbbVie anti-TNF. (Also see "Takeda's Entyvio Beats Humira In Head-To-Head Ulcerative Colitis Trial" - Scrip, 13 Mar, 2019.) However, while treatment guidelines were updated to note Entyvio’s superior performance, they also noted that physicians could use more convenient – i.e. not intravenously administered –therapies instead, Yoo noted.

AbbVie is running the Phase III SEQUENCE trial testing its IL-23 inhibitor against Stelara in Crohn’s disease, which has the potential to make Skyrizi the preferred interleukin inhibitor for CD, boosting AbbVie’s rebate bundling capabilities, he said.

Biosimilar Launch Impacts May Be Limited

So far, it does not appear that Humira and Stelara biosimilars in 2023 and 2024, respectively, will impact new drug launches. Consensus opinion seems to be that the biosimilars primarily will cause greater competition among the anti-TNF therapies. Pfizer’s former global president of inflammation and immunology Michael Gladstone told Scrip that he does not anticipate a big impact from Humira biosimilars on drugs with novel mechanisms, even though three-quarters of Pfizer’s Inflectra revenue comes from its UC and CD indications. Those diseases are expected to be revenue drivers for the company’s Humira biosimilar Abrilada as well, he noted, since they are important indications for AbbVie’s product.

“As biosimilars grow, payers are going to be funneling more patients to those TNF inhibitors, but the reality is most of the patients start off with a TNF inhibitor anyway, so the introduction of biosimilars helps bring down the overall cost of care,” Gladstone said. “We don't think that the introduction of biosimilars would impact a product like etrasimod to any degree because we would be looking for, ideally, for patients before they would even go to a TNF. And for those patients where TNFs didn't provide the relief that they need, then of course etrasimod is still yet another great option.”

Patrik Jonsson, president of Lilly Immunology and Lilly USA, said the company also sees anti-TNF biosimilars primarily as changing the dynamics within the TNF class in the eyes of pharmacy benefit managers (PBMs).

“Most likely a PBM will be selecting one or a maximum of two TNFs, but we don't see an impact on the new, more innovative treatments, such as our mirikizumab, in the treatment of IBD,” Jonsson said.

Yoo also predicted that anti-TNF biosimilars will have an impact on overall costs of IBD treatment, but likely will not impact individual therapies outside the TNF class.

“Either the originator brand is going to offer even more discounts to lower the net cost to payers or, the second scenario being more likely is that the increasing competition of all of the biosimilars that are coming out are going to drive the prices down considerably,” he noted. “So plans could potentially keep their clinical criteria in place by having adalimumab or Stelara being their preferred agents but simply just replace the originator brands with a lower cost biosimilar agent.”

Rebates, Value-Based Contracts And Patient Demand

The best way for companies with new IBD therapies to compete is by launching therapies at competitive list prices or with aggressive rebates, including bundled rebates, if possible, Yoo said. He pointed out that value-based agreements also are an option, where payers get even bigger rebates if a drug does not work or if patient adherence to treatment is reduced due to lack of efficacy or adverse events.

For a manufacturer that doesn't have a large presence in this space, Yoo said, offering “a pretty significant and impactful value-based care agreement could potentially really improve the incentives for plans because there's so much spend in this space,” Yoo said.

He noted that patient and prescriber demand also may get payers to consider having a drug on formulary, “because one thing that you don't want as a payer is to be blocking a drug that is very popular and that both patients and prescribers keep asking for.” New oral therapies could fall into that category, he explained, because in addition to the convenience of an oral therapy, younger patients with a chronic disease like UC or CD feel like they have a less serious disease when they take a daily pill rather than frequent injections or infusions.

IBD drug developers agree that market dynamics generally are the same regardless of geography, but payer dynamics may be slightly different in countries or regions with universal, government-funded health care.

The prevalence of UC in Europe is pretty much consistent with the US, for instance, Lilly’s Jonsson noted, with similar clinical challenges in terms of many patients being unable to achieve or maintain remission and struggling with bowel urgency.

“I think the big difference is that you have universal health care systems, and the Europeans particularly have been much faster in adopting biosimilars overall,” he said. “So I think it's probably likely that the biosimilars will be a step therapy – that's my guess – in most of the European markets through biosimilars prior to having access to a medicine like mirikizumab. Japan is probably … somewhere in between Europe and the US when it comes to biosimilar adoption.”

Pfizer’s Gladstone noted that the number of conventional therapies that patients have to go through to get to advanced therapies is different in different countries. “We think some things are the same in terms of the unmet need – how we get there varies a little bit by market, how they look at the order of medications, and that's always an individual difference by country, but it's a big opportunity globally,” he said.


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