Biosimilar Proposal for Medicare Will Depend on the Details

Last month, the Biosimilars Forum released a proposal that it said could save the United States and taxpayers billions of dollars in Medicare Part B, depending on which changes Congress decided to make, such as creating new innovation models, using a shared savings program, or upping add-on payments.

The industry group said it commissioned a scoring analysis from Avalere Health examining options that could potentially reduce out-of-pocket costs (OOP) and federal spending in the range of $1.9 billion to $5.2 billion between 2020 and 2029, and cut beneficiary costs by $2.2 billion to $3.3 billion.

The estimates vary based on the underlying assumptions used, and they vary widely. In that sense, it is similar to other reports that have strategized ways to increase the uptake of biosimilars in the United States, where they have about 2% of the total biologics market, and outcomes depends on a lot of other factors, said one observer.

“Do I think these numbers are reasonable and achievable? Potentially,” said Christina Corridon, MPH, MBA, a principal with the consulting firm ZS, where she heads the firm’s biosimilars practice. She noted that the US market is “not as friendly as it could be.”

However, it is still unknown how may biosimilars will launch in the next few years, she noted, with a lot of “what ifs” that are as yet unanswered.

Sometimes these reports may be construed as a public relations effort to keep encouraging manufacturers to stay in the game, as well as to keep biosimilars in the public eye as a trustworthy cost-savings alternative to name-brand reference products, Corridon said.

There are other details that would be worth knowing, she said, such as, what’s the proportion in these savings in federal spending versus out-of-pocket costs, which can be highly variable? What’s the makeup of the population?

“In some ways I think the [Biosimilars] Forum is giving non-Medicare payers some ideas to wrestle with,” if they really want to help increase competition and lower costs, she noted, since sometimes commercial payers follow whatever CMS decides for Medicare.

There are other questions that have yet to be answered, such as whether payment proposals would look different for a patient who is switched from a reference product versus someone who is naïve to biologics.

“There’s different levels of comfort in switching stable patients,” versus using biosimilars to treat naïve patients, she said.

Additionally, if savings is the goal, some can be achieved without a legislative mandate, depending on how a company outlines the terms of any discounts and through the contracting process, she said.

A Biosimilars Forum board member, Sheila Frame, vice president, Marketing, Market Access and Patient Services at Sandoz, said the proposal lines up with the request for lower pharmaceutical spending from the Trump administration.

“They’re looking for system savings, they’re looking for patient savings, and they’re looking for overall improvement, said Frame. Sandoz, maker of the filgrastim biosimilar Zarxio, remains optimistic about the US biosimilar market, she said.

In addition, increasing patient access and removing financial toxicity through lower costs could help improve patient adherence, Corridon said.