More biosimilar use could've saved Medicare and beneficiaries $84M in 2019, HHS OIG says
In the nearly 7 years since biosimilars were first approved in the US, the story has been one of lackluster uptake, amid a growing familiarity with the way the patent “dance” works, and how the FDA approval process plays out.
But the biosimilar side of the biologics equation is going to need to carry more of the weight moving forward as biologics are estimated to cost CMS’ Part D program upwards of $12 billion annually, and that number has been going up in recent years.
What’s more: much of this total right now is spent on two biologics — AbbVie’s Humira and Amgen’s Enbrel accounted for more than $5 billion in Part D spending and nearly half of Part D spending on biologics in 2019 — even as biosimilar competition for both drugs are already FDA-approved but will not be marketed until next year in the case of Humira, and Enbrel biosimilars will wait until 2029.
In a new report released earlier this week, HHS’ Office of the Inspector General explains how in 2019, when the biosimilar US market was in its relative infancy with just eight biosimilars for four reference products covered under Part D, brand-name biologics with biosimilar competition were still being prescribed about five times more frequently than their biosimilars in Part D.
“We estimated that with increased use of biosimilars instead of reference products, Part D and beneficiary spending could have been considerably reduced in 2019. Specifically, Part D spending on biologics with available biosimilars could have decreased by $84 million, or 18 percent, if all biosimilars had been used as frequently as the most used biosimilars,” the report says, explaining:
Part D gross spending on biosimilars and their reference products could have decreased $84 million in 2019 if all available biosimilars had been used at the same 60-percent utilization rate as filgrastim biosimilars. This amounts to 18 percent of the $466 million that Part D spent on all biosimilars and their reference products in 2019. We estimated utilization for all biosimilars at 60 percent because filgrastim biosimilars had achieved this utilization rate after nearly 5 years on the market. Furthermore, if biosimilars had been used at a 90-percent utilization rate—the utilization rate of generic, nonbiologic drugs—Part D gross spending on these drugs could have decreased by $143 million, or 31 percent of actual 2019 gross spending.
Out-of-pocket costs could have similarly declined with the use of more biosimilars by 12%, or $1.8 million.
“Although these amounts are modest in the context of overall Part D spending, far greater spending reductions will be possible as additional biosimilars become available,” OIG says.
Currently, 32 biosimilars have been approved, and 21 have hit the market, with more coming soon.
As far as suggestions moving forward, OIG calls on CMS to encourage health plans to increase access to and use of biosimilars in Part D, as well as to better monitor biosimilar coverage on formularies to identify “concerning trends.”
