At Viatris, we believe that the benefits of off-patent competition should always be available to patients. When a lower-priced generic or biosimilar competitor launches, health plans should give patients access to these medicines, instead of continuing to prefer the branded originator drug.

Historically, generic drugs were almost always included in tiers reserved for preferred and non-preferred generic drugs, typically with very low cost sharing to ensure patients received immediate out-of-pocket benefit from the advent of off-patent competition. Increasingly, however, insurance companies are choosing not to cover generics on formularies at all or are placing them on the same or higher tiers than their brand-name equivalents, despite generic prices continuing to decline. This means that patients cannot take full advantage of lower-cost medicines coming to market.

Generics On Generics Tiers
In just nine years, Part D formularies have gone from including 71% of generic drugs on the preferred generic tier in 2011 to only 10% in 2020.

Avalere Analysis: Seniors Pay More for Medicare Part D Generics Despite Stable Prices

Avalere Analysis: Effect of Potential Policy Change to Part D Generic Tiering on Patient Cost Sharing and Part D Plan Costs

Avalere Analysis: For the First Time, a Majority of Generic Drugs Are on Non-Generic Tiers in Part D

Avalere Analysis: Generic Drug Placement on Part D Generic Tiers Declines Again in 2021

While health plans may truthfully claim that their preference for branded medicines over generics and biosimilars is based on lower net prices to the plan because of discounts or rebates, this system is short-sighted and undermines sustainable access to affordable medicine for American patients. If off-patent competition is only used as a tool to secure price concessions from brands, without expectation for utilization of the off-patent competitors themselves, there will be no incentive for companies to bring lower-cost medicines to market, and branded monopolies will continue unabated. Further, preferring higher list prices often leaves patients on high-deductible, and leaves patients with percentage-based cost-sharing stuck footing a disproportionate share of the bill.