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It is True: Biosimilars Save Cash for Medicare

Biosimilars had been touted as an essential reply to the issue of hovering drug prices, however whether or not they’ve…

By Staff , in Medicare , at September 17, 2021

Biosimilars had been touted as an essential reply to the issue of hovering drug prices, however whether or not they’ve had a real, measurable affect within the U.S. hasn’t been apparent. Now, two researchers analyzing Medicare Half B spending on biologic medicine have provide you with proof, or no less than some laborious greenback figures approaching it.

After biosimilar rivals got here available on the market in 4 product classes — infliximab, filgrastim, pegfilgrastim, and epoetin alfa — monies paid to suppliers for standardized doses had all declined as of 2019, in response to Emma Boswell Dean, PhD, of the College of Miami, and Amelia M. Bond, PhD, of Weill Cornell Medical School in New York Metropolis, writing in JAMA Well being Discussion board.

Particularly, they calculated the next annual common declines in Medicare Half B spending following introduction of biosimilars:

  • Infliximab: -7%
  • Filgrastim: -13%
  • Pegfilgrastim: -1%
  • Epoetin alfa: -13%

Though costs for biosimilars had been decrease than for originator medicine in these classes, that was solely partly answerable for the general impact. “Declines in Medicare spending after biosimilar entry got here from a variety of sources: biosimilar costs and market share drove filgrastim declines, originator costs drove infliximab and epoetin alfa declines, and biosimilar market share drove pegfilgrastim declines,” Dean and Bond wrote.

In every case, their information confirmed that Half B spending per dose was rising within the years previous to biosimilar product launches, however then both stabilized or declined. (In some circumstances, general spending on originators was already in decline as a result of gross sales volumes had been falling.)

By 2019, biosimilars owned the marketplace for filgrastim, accounting for about 75% of gross sales. For the opposite three product sorts, nonetheless, originators had been nonetheless dominant; general market share for his or her biosimilar competitors hadn’t but reached 20%.

Simply the actual fact of competitors impelled producers of originator biologics to reasonable their pricing habits, it seems.

That this is able to happen — and the brand new examine comes with a number of limitations — wasn’t a slam dunk.

In 2017, 2 years after the primary infliximab biosimilar (Inflectra) was accepted, one outstanding rheumatologist predicted it might haven’t any affect on general costs.

Talking throughout an American School of Rheumatology convention debate, Roy Fleischmann, MD, of the College of Texas Southwestern Medical Heart in Dallas, argued that pharmacy profit managers and built-in well being methods would stop biosimilars from making critical inroads, as a result of that might harm their backside traces.

And, in reality, the examine by Dean and Bond, specializing in Medicare Half B spending, does not contradict his level. Medicare reimbursement for Half B is tied to checklist costs and there’s no formulary that units most well-liked merchandise.

That does not imply there’s zero incentive, nonetheless. Medicare Half B pays for medicine administered in a doctor’s workplace or hospital outpatient clinic — usually those who require infusion, which is the case for a lot of biologics, together with the 4 coated within the new examine. Medicare pays the doctor a hard and fast quantity primarily based on a drug’s common gross sales value plus 6%, meant to cowl administration prices. Thus, that additional proportion has been seen as an encouragement for physicians to desire higher-priced medicine.

Nonetheless, the brand new examine did not look at what has occurred out there for biologics reimbursed by personal insurance coverage.

Dean and Bond obtained Half B information information from the Facilities for Medicare & Medicaid Companies (CMS) for 2013 to 2019. “For every product, we transformed administration quantity to a constant dose (filgrastim, 1 μg; infliximab, 10 mg; epoetin alfa, 1,000 items; and pegfilgrastim, 6 mg) and calculated noticed costs by dividing Medicare spending by the standardized quantity,” the pair defined. They derived market shares for every product sort from the standardized dosing volumes. Notably, as a result of the CMS information consists of all Half B spending, no statistical exams or estimations had been wanted.

  • John Gever was Managing Editor from 2014 to 2021; he’s now a daily contributor.

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