Variation in Provider Reimbursement for Biosimilars and Reference Biologics by Commercial Payers
Author(s)
Michael Barna, MA1, Jelena Zurovac, MS, PhD2, Shiven Bhardwaj, PharmD, MAS3, Evelyn Li, PhD4;
1Mathematica, Ann Arbor, MI, USA, 2Mathematica, Washington, DC, USA, 3University of Washington, The Comparative Health Outcomes, Policy, and Economics (CHOICE) Institute, Seattle, WA, USA, 4Mathematica, Princeton, NJ, USA
1Mathematica, Ann Arbor, MI, USA, 2Mathematica, Washington, DC, USA, 3University of Washington, The Comparative Health Outcomes, Policy, and Economics (CHOICE) Institute, Seattle, WA, USA, 4Mathematica, Princeton, NJ, USA
Presentation Documents
OBJECTIVES: In 2022, CMS regulation mandated commercial payers to disclose prices of procedures and provider-administered drugs. Using price data published by payers, we explored the variation in reimbursement across large payers for two biologic drugs and their biosimilars in two large metropolitan areas.
METHODS: We used price data from Q1 2024 for three largest payers in San Francisco and Chicago areas, each for Herceptin (trastuzumab) and its biosimilars (Ontruzant, Herzuma, Ogivri, Trazimera, and Kanjinti). We examined variation in reimbursement rates across providers within and across payers. We define providers by a combination of tax identification number (TIN) and location.
RESULTS: In the Bay area, median reimbursement for trastuzumab products exceeded average sales price (ASP), from 149% of ASP for Herceptin to 1,246% for Trazimera. Relative to Herceptin, biosimilars were nearly always less expensive, from 54% of ASP for Ontruzant by Anthem to 91% for Ogivri by Kaiser, and more expensive only for Trazimera by Kaiser. Reimbursement for Herceptin varied greatly across providers per payer, with the most variation for Anthem (IQR [134% of ASP, 344%]) and least for Blue Shield (IQR [132%, 155%]). Relative to Herceptin reimbursement, across-provider variation in biosimilar prices differed greatly by drug: Ontruzant (least variation), Kanjinti, Herzuma, Ogivri, Trazimera (most variation). The largest differences in across-provider variation were for Kaiser.
CONCLUSIONS: Drivers of reimbursement rates include terms of confidential contracts between manufacturers, payers, and providers, and incentives for providers to use less expensive biosimilars. Payer price transparency data offer a unique opportunity to understand how reimbursement incentivizes providers. It may be used to explore the impact of biosimilar competition on spending on trastuzumab products across commercial markets. Further, understanding reimbursement variation across commercial health payors and providers can inform manufacturers’ pricing and strategies.
METHODS: We used price data from Q1 2024 for three largest payers in San Francisco and Chicago areas, each for Herceptin (trastuzumab) and its biosimilars (Ontruzant, Herzuma, Ogivri, Trazimera, and Kanjinti). We examined variation in reimbursement rates across providers within and across payers. We define providers by a combination of tax identification number (TIN) and location.
RESULTS: In the Bay area, median reimbursement for trastuzumab products exceeded average sales price (ASP), from 149% of ASP for Herceptin to 1,246% for Trazimera. Relative to Herceptin, biosimilars were nearly always less expensive, from 54% of ASP for Ontruzant by Anthem to 91% for Ogivri by Kaiser, and more expensive only for Trazimera by Kaiser. Reimbursement for Herceptin varied greatly across providers per payer, with the most variation for Anthem (IQR [134% of ASP, 344%]) and least for Blue Shield (IQR [132%, 155%]). Relative to Herceptin reimbursement, across-provider variation in biosimilar prices differed greatly by drug: Ontruzant (least variation), Kanjinti, Herzuma, Ogivri, Trazimera (most variation). The largest differences in across-provider variation were for Kaiser.
CONCLUSIONS: Drivers of reimbursement rates include terms of confidential contracts between manufacturers, payers, and providers, and incentives for providers to use less expensive biosimilars. Payer price transparency data offer a unique opportunity to understand how reimbursement incentivizes providers. It may be used to explore the impact of biosimilar competition on spending on trastuzumab products across commercial markets. Further, understanding reimbursement variation across commercial health payors and providers can inform manufacturers’ pricing and strategies.
Conference/Value in Health Info
2025-05, ISPOR 2025, Montréal, Quebec, CA
Value in Health, Volume 28, Issue S1
Code
RWD83
Topic
Real World Data & Information Systems
Topic Subcategory
Health & Insurance Records Systems
Disease
No Additional Disease & Conditions/Specialized Treatment Areas, SDC: Oncology, STA: Biologics & Biosimilars