Commercial Payer Coverage of Biosimilars: Market Share, Pricing, and Policy Shifts

Biosimilars have gained success in recent years, with increased payer preference and market share, leading to significant price reductions and evidence of a competitive market from 2017 to 2022, according to a recent study.¹

The study, published in Pharmaceuticals and Medical Technology, explored payer preferences, market share trends, and pricing dynamics between originators and biosimilars.

“Our research shows that payers are embracing lower cost biosimilars, but it may take more time than hoped or expected for the markets to shift. In our study, it took an average of about 3 years for biosimilar utilization to overtake that of the originator products…. Payer coverage policies are a leading indicator of how utilization of biosimilars may change over time,” wrote Molly T. Beinfeld, MPH, lead study author and project director of the Specialty Drug Evidence and Coverage database team at Tufts Medical Center Center for the Evaluation of Value and Risk in Health, in a statement to The Center for Biosimliars^®.

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The Biologics Price Competition and Innovation Act of 2009 established a pathway for biosimilars, aiming to increase competition and make biologics more affordable and accessible.² However, biosimilar market share has been higher in other countries than in the US, where payers have often required patients to try originator products first. Studies show that payers tend to prefer certain biosimilars, but it's unclear how these preferences have evolved and how biosimilar introduction has impacted the price and market share of originator products.

The study analyzed coverage, market share, and pricing data for 7 originator products and 20 corresponding biosimilars, considering each FDA-approved indication separately. Coverage data came from the Tufts Medical Center Specialty Drug Evidence and Coverage database, covering policies from 17 large US commercial payers from 2017 to 2022, representing approximately 161 million lives.

Market share data were sourced from IQVIA’s Longitudinal Access and Adjudicated Data Set, supplemented with data from the IQVIA PharMetrics Plus database for nephrology drugs. Pricing data, including average sales price and wholesale acquisition cost, was obtained from CMS and AnalySource databases.

The analysis involved 3 main steps: quantifying payer coverage preferences, tracking market share changes for originators and biosimilars, and assessing price trends over time, with a focus on rebates and discounts.

Between August 2017 and August 2022, there was a significant shift in payer coverage preferences. The proportion of policies with sole preferred coverage of 1 product (either an originator or biosimilar) dropped from 70% to 24%, and sole preferred coverage of the originator product decreased sharply from 55% to 8%. Meanwhile, the percentage of policies covering multiple products as first-line treatments increased dramatically from 30% to 76%. By 2022, the frequency with which payers covered originator products as preferred varied widely, from 3% to 89%, and nearly all payers (except for 3) included multiple products as co-preferred in the majority of their coverage policies. Specifically, 24% of policies listed only 1 preferred product, 55% listed 2 co-preferred products, and 21% listed 3 or more products as first-line options.

In terms of market share, after the introduction of biosimilars, the combined biosimilar market share exceeded the originator market share on average 3 years after the first biosimilar launch. However, individual biosimilars experienced slower growth in market share due to the competition generated by multiple biosimilar entrants.

Regarding pricing, the introduction of biosimilars resulted in a decrease in the originator-biosimilar market prices. The mean average sales price of the originator-biosimilar market dropped to 63% of its initial value 4 years after the first biosimilar launch, while the mean wholesale acquisition cost decreased to 91% of its initial value during the same period. This indicates that the biosimilars' entry into the market significantly impacted pricing dynamics, leading to cost reductions in both the average sales price and the wholesale acquisition cost.

According to the authors, the introduction of biosimilars has allowed payers to negotiate better terms with both originator and biosimilar manufacturers, offering multiple first-line treatments and securing larger rebates and discounts, contributing to health system savings. While net prices (average sales prices) have shown more responsiveness than wholesale acquisition costs, reflecting savings through discounts rather than list price changes, payer behavior has shifted to favor biosimilars with the best terms. However, the impact of the Inflation Reduction Act on future biosimilar incentives remains uncertain.

The study had several limitations, including potential lack of generalizability to other payers, the exclusion of formulary management tools, bias in coverage data for biosimilars with multiple indications, differences between average sales prices and actual commercial-market prices, and limitations in market share data from noncommercial payers.

References

1. Beinfeld MT, LaMountain F, Wong W, Kim E, Chambers JD. US commercial plans increase choice of biosimilar and originator products; market net prices decrease. Health Aff (Millwood). 2024;43(9):1290-129. doi:10.1377/hlthaff.2023.01532

2. Implementation of the Biologics Price Competition and Innovation Act of 2009. FDA. Updated February 12, 2026. Accessed November 2, 2024. https://www.fda.gov/drugs/guidance-compliance-regulatory-information/implementation-biologics-price-competition-and-innovation-act-2009