POTENTIAL MEDICARE PART B SAVINGS FROM ACCELERATED BIOSIMILAR ADOPTION
Author(s)
Aaron N. Winn, MPP, PhD1, Ibrahim Warsi, BDS, MSc, MBA1, Abdullah Islam Abdelaziz, BPharm, MSc1, Stacie Dusetzina, PhD2, Aaron Mitchell, MD3.
1Department of Pharmacy Systems, Outcomes and Policy, Retzky College of Pharmacy, University of Illinois at Chicago, Chicago, IL, USA, 2Department of Health Policy, Vanderbilt University Medical Center, Nashville, TN, USA, 3Department of Epidemiology and Biostatistics, Memorial Sloan Kettering Cancer Center, New York, NY, USA.
1Department of Pharmacy Systems, Outcomes and Policy, Retzky College of Pharmacy, University of Illinois at Chicago, Chicago, IL, USA, 2Department of Health Policy, Vanderbilt University Medical Center, Nashville, TN, USA, 3Department of Epidemiology and Biostatistics, Memorial Sloan Kettering Cancer Center, New York, NY, USA.
OBJECTIVES: Biosimilar competition lowers healthcare spending through both price reductions and volume shifts, yet prior savings analyses have focused on price effects. We estimated the additional savings to Medicare if market share shifted from originator products to biosimilars more rapidly - mirroring market shifts observed for traditional generic drugs.
METHODS: This simulation study linked quarterly CMS Average Sales Price (ASP) data with Bloomberg sales volume for 6 drugs with biosimilar entry during 2015-2020 (bevacizumab, filgrastim, infliximab, pegfilgrastim, rituximab, and trastuzumab), followed for 3.75 years (15 quarters) post-biosimilar entry. We estimated a hypothetical adoption model based on faster historical uptake of generic drugs, in which originator's market share declines from approximately 46% at month 1 to 10% by 24 months post-competition. Holding inflation-adjusted ASP constant, we modeled the cost savings to Medicare if the remaining market share was allocated to biosimilars. We modeled two biosimilar volume allocation scenarios: 1) allocated across biosimilars proportional to observed market shares, and 2) allocated entirely to the lowest-priced product within each quarter (whether biosimilar or originator). Savings were the difference between observed and counterfactual cumulative expenditure, in 2025 US dollars.
RESULTS: Under scenario 1, accelerated adoption would have generated cumulative cost savings of $0.52 billion (6.6%) at 1 year and $1.91 billion (9.5%) at 3 years. Scenario 2, concentrating volume on the lowest-priced product, produced greater savings of $0.81 billion (10.3%) and $2.49 billion (12.3%) at 1 and 3 years, respectively.
CONCLUSIONS: Biosimilar drugs have achieved substantial cost savings. This scenario analysis suggests substantial additional savings could be achieved if biosimilar adoption increased at a similar rate to that observed among traditional generic drug products. Further, policies that reimburse biosimilars at the rate of the lowest-cost biosimilar drug (“least costly alternative” policies) have the potential to further increase savings.
METHODS: This simulation study linked quarterly CMS Average Sales Price (ASP) data with Bloomberg sales volume for 6 drugs with biosimilar entry during 2015-2020 (bevacizumab, filgrastim, infliximab, pegfilgrastim, rituximab, and trastuzumab), followed for 3.75 years (15 quarters) post-biosimilar entry. We estimated a hypothetical adoption model based on faster historical uptake of generic drugs, in which originator's market share declines from approximately 46% at month 1 to 10% by 24 months post-competition. Holding inflation-adjusted ASP constant, we modeled the cost savings to Medicare if the remaining market share was allocated to biosimilars. We modeled two biosimilar volume allocation scenarios: 1) allocated across biosimilars proportional to observed market shares, and 2) allocated entirely to the lowest-priced product within each quarter (whether biosimilar or originator). Savings were the difference between observed and counterfactual cumulative expenditure, in 2025 US dollars.
RESULTS: Under scenario 1, accelerated adoption would have generated cumulative cost savings of $0.52 billion (6.6%) at 1 year and $1.91 billion (9.5%) at 3 years. Scenario 2, concentrating volume on the lowest-priced product, produced greater savings of $0.81 billion (10.3%) and $2.49 billion (12.3%) at 1 and 3 years, respectively.
CONCLUSIONS: Biosimilar drugs have achieved substantial cost savings. This scenario analysis suggests substantial additional savings could be achieved if biosimilar adoption increased at a similar rate to that observed among traditional generic drug products. Further, policies that reimburse biosimilars at the rate of the lowest-cost biosimilar drug (“least costly alternative” policies) have the potential to further increase savings.
Conference/Value in Health Info
2026-11, ISPOR Europe 2026, Vienna, Austria
Value in Health, Volume 29, Issue 12S
Code
PT36
Topic
Economic Evaluation, Health Policy & Regulatory, Methodological & Statistical Research
Topic Subcategory
Pricing Policy & Schemes, Public Spending & National Health Expenditures, Reimbursement & Access Policy
Disease
Biologics & Biosimilars, Oncology, Systemic Disorders/Conditions (Anesthesia, Auto-Immune Disorders (n.e.c.), Hematological Disorders (non-oncologic), Pain)