Biosimilars: Considerations for Payers

Cost and savings will ultimately play a key role in determining the acceptance of biosimilars, and in coming years, biosimilars are expected to increase market competition, thereby diminishing health care costs. In this review, published in Pharmacy & Therapeutics, authors examined key considerations about biosimilars that U.S. payers should take into consideration, exploring the uptake of biosimilars, the current U.S. inexperience with biosimilars, cost consideration, and value beyond price.

The main uptake of biosimilars is likely due to acquisition costs. These projected reductions in acquisition costs in the United States range from 10% to 20%. Although this is lower than the reduction seen over time with generic drugs, the significance in terms of absolute savings may be similar, owing to the higher cost of reference products. However, there are other factors to consider for buyers deciding to select a biosimilar over the biologic originator or over another biosimilar of the same reference. For all stakeholders, the quality, efficacy, and safety of the biosimilar is paramount, while factors to consider for health care professionals, and payers include manufacturer reliability, reimbursement rates (set by either Medicare of commercial payers), and any support services made available for both patients and physicians alike. Patients are heavily influenced by their providers, whom they trust to supply accurate information of the efficacy and safety of their medications, while also striving to mitigate any out-of-pocket expenses they may incur. The impact of patient expenses often correlates to adherence, which can potentially affect clinical outcomes.

Payers should also be aware that despite the expected differences in unit cost between biosimilars and their original references, they may still need to negotiate with manufacturers to push the projected savings beyond the original. For patients enrolled in Medicare Part B, recipients are reimbursed the value of a biosimilar based on the sum of the drug’s average selling price plus a fixed percentage, currently 6%, of the originator’s price. This stipulation is intended to put Medicare payments for biosimilars on a level playing field with the refence products. The decreased acquisition costs of biosimilars compared to originators stand to affect patients with high-deductible plans or coinsurance where their expenses are calculated as a percentage rather than a fixed copay. Such patients may drive their providers to prescribe biosimilars over the reference product to mitigate expenditures.

One obstacle standing in the way of further biosimilar uptake is the relative inexperience of stakeholders in the US in dealing with these drugs. The major considerations payers should consider include provider and patient education and gaining an understanding of the regulatory approval process. This includes learning about differences in state and regional adoption practices and laws, administration strategies, and insurance coverage barriers. The authors noted vthat “educational opportunities for physicians, patients, and payers are needed to facilitate the incorporation of biosimilars into formulary decision-making.”

Overall, there are many important factors that payers should evaluate when considering biosimilars. The authors concluded by urging payers to “consider the impact of state laws regarding substitution, including how interchangeable biosimilars may be used.” They added that when it comes to the U.S., “further real-world experience with biosimilars is needed to more fully appreciate their broader value and potential for increasing patient access to life-saving biologics.”