Whereas generic medication steadily substitute their branded counterparts after the latter lose their market exclusivity, the uptake of biosimilar merchandise is commonly slower. Additional, biosimilars are comparatively dearer in comparison with generic small molecule medication. A key query then is how a lot might payers save by switching to biosimilars after lack of exclusivity.

The is the query {that a} paper by Dickson and Kent (2021) purpose to reply. The authors study how costs differ for branded, physician-administered medication which had generic or biosimilar variations launched earlier than 2005. They use 5 knowledge sources to judge these value modifications:

  • Medicare Half B Common Gross sales Value (ASP) reimbursement recordsdata from Q1 2005 to Q2 2021, to find out reimbursement by HCPCS code;
  • Related ASP crosswalk recordsdata, to find out which drug formulations are reimbursed beneath every HCPCS code;
  • Medicare Half B drug spending dashboard (2010-2019), was used to measure annual utilization of Medicare Half B medication, each model and generic
  • FDA Orange Ebook, used to find out the variety of drug producers that marketed formulations beneath every HCPCS code
  • FDA Purple Ebook, used to establish the variety of producers of biosimilar formulations

Utilizing these knowledge, the authors implement a linear, fixed-effects time collection regression mannequin to estimate how value change after the introduction of a generic/biosimilar rivals (i.e., sure/no) and the variety of generic/biosimilar rivals that had been current out there. With this strategy, they discover:

After excluding the outliers amongst all medication within the examine, the presence of 1 generic competitor was related to a 14.9% imply value discount within the bundled ASP, 2 generic rivals had been related to a 32.7% imply value discount, and three generic rivals had been related to a 52.0% imply value discount. Further rivals had been related to a imply complete value lower of 68.6%; all estimated reductions had been from the worth of the brand-name drug within the quarter earlier than generic competitors and never from the worth with fewer generic rivals

The paper reveals that Medicare might have saved extra money with a faster transition to biosimilar merchandise.

Through the modeling interval of 2015 to 2019 and for these years with reported Medicare spending on each biologics and their related biosimilars, Medicare and its beneficiaries spent $6.5 billion on these 6 biologics with their biosimilar variations: Neupogen (filgrastim), Remicade (infliximab), Neulasta (pegfilgrastim), Avastin (bevacizumab), Herceptin (trastuzumab), and Epogen (epoetin alfa)…We estimated that the bundled biosimilar reimbursement mannequin would have been related to diminished spending on these therapies of $1.6 billion, or 26.6%


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