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Illustration: Lazaro Gamio/Axios

There are only a handful of biosimilars available in the U.S. And one of the country’s biggest insurers is about to start disadvantaging one of them, in favor of its more expensive competitor.

Why it matters: Deals like this are part of the reason biosimilars — envisioned, roughly, as generic versions of complex and pricy biologic drugs — aren’t gaining a foothold. And that’s keeping prices high throughout the system.

Details: Udenyca is a biosimilar version of the cancer drug Neulasta. Its list price is 33% lower than Neulasta’s.

  • UnitedHealthcare will soon be redesigning its drug coverage so that it will only cover Udenyca after patients try Neulasta, and only if it doesn’t work for them.
  • "In some instances, like Neulasta, the original biologic product may be the lowest cost option as a result of our ability to drive down pharmaceutical manufacturers’ prices," United said in a statement.

That’s a big reversal from the way things work with traditional generics, when you have to fail on the generic before you can get the brand-name drug. Instead, patients will have to use the more expensive drug first.

How it works: United will give preferential treatment to Neulasta because Amgen, which makes Neulasta, offered a bigger rebate than Coherus, which makes Udenyca, a source familiar said.

  • Pharmacy benefit managers negotiate discounts in the form of rebates — part of which they keep as profits.
  • "The process highlights the cost savings that are being generated as prices decrease due to the increased competition created by biosimilar entry," Amgen said in a statement.

“Amgen will pursue any avenue they have to block out the competition and extend this monopoly,” said Denny Lanfear, the chairman, president, and CEO of Coherus.

  • Lanfear suspects that Amgen offered United bigger rebates across its entire portfolio of drugs to gain a competitive advantage. Udenyca is Coherus' only product, so it simply can't match the scale of such an offer.
  • Amgen says this is not the case and that the negotiation didn't involve any other products in its portfolio. The agreement "was the result of a competitive bidding process based on the price and value of Neulasta versus its competitors," Amgen said.

Between the lines: United is able to pass savings from this discount on to the insurers and employers it works for — which is, essentially, the way the system is supposed to work.

  • But patients' out-of-pocket costs are often based on drugs' list prices, so some will be paying more because of this arrangement.

The bottom line: Because biosimilars are a new class of drugs, these kinds of arrangements not only disadvantage one drug, but are keeping the whole category from catching on, critics argue.

  • "This isn’t going to put me out of business, but the problem is it's going to put the biosimilar industry out of business if it goes on," Lanfear said. "People aren’t going to commercialize in biosimilars. They’re going to go somewhere else.”

Editor's note: This piece was updated around 6am Monday with comments provided by Amgen. It was updated again around 9am Monday with comments provided by United.

Go deeper

Acting Capitol Police chief: Phone logs show Jan. 6 National Guard approval was delayed

Pittman at a congressional tribute for fallen officer Brian Sicknick. Photo: Erin Schaff-Pool/Getty Images

Acting U.S. Capitol Police Chief Yogananda Pittman testified on Thursday that cell phone records show former USCP Chief Steven Sund requested National Guard support from the House sergeant at arms as early as 12:58 p.m. on Jan. 6, but did not receive approval until over an hour later.

Why it matters: Sund and former House Sergeant at Arms Paul Irving clashed at a Senate hearing on Tuesday over a dispute in the timeline for when Capitol Police requested the National Guard during the Capitol insurrection.

Manhattan prosecutors reportedly obtain millions of pages of Trump's tax records

Photo: Al Drago/Bloomberg via Getty Images

The Manhattan district attorney is now in possession of millions of pages of former President Trump's tax and financial records, CNN first reported, following a Supreme Court ruling that allowed prosecutors to enforce a subpoena after a lengthy legal battle.

Why it matters: Trump fought for years to keep his tax returns out of the public eye and away from prosecutors in New York, who are examining his business in a criminal investigation that was first sparked by hush-money payments made by Trump's former fixer Michael Cohen during the 2016 election.

Dion Rabouin, author of Markets
3 hours ago - Economy & Business

The digital dollar is now high priority for the Fed

Illustration: Aïda Amer/Axios

The U.S. is starting to get serious about a central-bank-backed digital currency, with recent comments from top officials laying out the strongest support yet.

Driving the news: On Tuesday Fed chair Jerome Powell told Congress that developing a digital dollar is a "high priority project for us," but added that there are "significant technical and policy questions."