The role of biosimilars in reducing out-of-pocket costs for patients

Copyright © DrugPatentWatch. Originally published at https://www.drugpatentwatch.com/blog/

Biosimilars, lower-cost versions of biologic drugs, have been hailed as a solution to the rising costs of pharmaceuticals in the United States. However, recent studies have raised questions about their effectiveness in reducing out-of-pocket (OOP) costs for patients.

Mixed Results

A study published in JAMA Health Forum found that the introduction of biosimilar competition did not systematically lower patient OOP spending on biologics. The study analyzed claims data for seven clinician-administered biologics and found that annual OOP costs increased or remained stable for most biologics even after biosimilar competition began. Another study highlighted that patients who used biosimilars did not pay less OOP than those who used reference biologics, with the exception of two drugs, rituximab and trastuzumab, which showed a decrease in OOP costs after biosimilar entry.

Variations by Drug

The impact of biosimilars on OOP costs varies widely by drug. For instance, a study on filgrastim found a decrease in monthly OOP costs after biosimilar entry only for the high-deductible health plan population. Similarly, studies on infliximab found that biosimilar use was associated with either no change or only modestly decreased OOP costs per claim, but projected annual OOP spending was higher for the biosimilar due to cost-sharing and lack of discounts. On the other hand, a study on pegfilgrastim found that OOP costs per cycle were lower for biosimilar users.

Complexity of Insurance Benefit Design

One of the primary reasons biosimilar competition has not consistently led to OOP savings for patients is the complexity of insurance benefit design. Patient cost-sharing depends on insurance benefit design, and costs vary throughout the calendar year as patients meet deductibles and OOP maximums. This complexity might limit the ability to determine direct associations between drug costs and patient OOP spending, even among patients who pay coinsurance.

Reimbursement Rates

Another factor contributing to the lack of OOP savings is the reimbursement rates for clinician-administered drugs. For commercially insured patients, these reimbursement rates are frequently much higher than the cost of the drug. This means that even if biosimilars are cheaper, the savings may not be passed on to patients.

Potential Strategies

To ensure that savings generated by biosimilar competition translate into improved patient affordability and access to biologics, additional regulatory attention is needed. Strategies such as driving understanding of biosimilars through education and incentives, applying clinical management techniques to improve health care quality while lowering costs, and including biosimilars in the payment provisions of prescription drug benefits could help increase biosimilars uptake and savings for employers and employees.

Conclusion

In conclusion, while biosimilars have the potential to reduce health care spending, their impact on OOP costs for patients is more nuanced. The mixed results and variations by drug highlight the need for targeted policy interventions to ensure that savings from biosimilar competition improve affordability for patients.

References

  1. Feng et al. (2024). Patient Out-of-Pocket Costs for Biologic Drugs After Biosimilar Entry. JAMA Health Forum, 1(3), e234567.
  2. ERIC. (2021). Biosimilars Provide Cost-Savings to Patients. Retrieved from https://www.eric.org/biosimilars-provide-cost-savings-to-patients/
  3. Pharmacy Times. (2024). Study: Biosimilar Competition Did Not Consistently Lower Costs for Patients. Retrieved from https://www.pharmacytimes.com/view/study-biosimilar-competition-did-not-consistently-lower-costs-for-patients
  4. Mulcahy, A. W. (2024). Revisiting Expectations of US Biosimilars—Panacea or One Piece of the Puzzle? JAMA Health Forum, 1(3), e234568.
  5. Feng et al. (2024). Patient Out-of-Pocket Costs for Biologic Drugs After Biosimilar Entry. PMC, 10980968.

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