Employers Could Reap Substantial Savings Through Biosimilars, but Not Without Targeted Effort

A new report from Matrix Global Advisors and the National Business Group on Health, sponsored by Boehringer Ingelheim, shows that employers could see substantial savings from biosimilars, but those savings won’t come without a concerted effort to encourage biosimilar use.
Kelly Davio
August 23, 2019
A new report from Matrix Global Advisors and the National Business Group on Health, sponsored by Boehringer Ingelheim, shows that employers could see substantial savings from biosimilars, but those savings won’t come without a concerted effort to encourage biosimilar use.

The report uses real-world claims data provided by a large manufacturing company with a high-deductible plan covering more than 80,000 members. It offers a base-case, an optimistic-case, and a best-case scenario for biosimilar savings depending on varying levels of utilization and price discounts for biosimilars of the 17 biologics in the medical benefit that face or are likely to face biosimilar competition.

The employer’s data show that, in 2017, 392 patients used these 17 biologics. Some of these biologics have currently available biosimilars (trastuzumab, bevacizumab, epoetin alfa, pegfilgrastim, filgrastim, and infliximab all have biosimilars launched in the United States), and others are expected to have biosimilar competitors in the near future (biosimilars of ranibizumab, aflibercept, and eculizumab, for example are under development by multiple drug makers) or in the coming years as patents expire.

The report presents 3 possible cases:
  • The base case assumes that a biosimilar will be used in 30% of cases, and that it will be priced 30% below the reference. In this scenario, the employer would save $837,866 ($10 per member per year [PMPY]), and patients would save $47,380 in out-of-pocket (OOP) costs ($121 average per patient [PP]).
  • In the optimistic case, which assumes a biosimilar will be used 50% of the time at a 40% discount, the employer would save $1,861,925 ($23 PMPY), and patients would save $105,289 in OOP costs ($269 PP).
  • Finally, in the best case, which also assumes a 40% discount and a 75% rate of use, the employer would save $2,792,888 ($34 PMPY), and patients would save $157,933 in OOP costs ($403 PP).

The report’s authors note, however, that “the mere existence of biosimilars in the US marketplace does not guarantee robust competition or the savings that follow.” They emphasize that employers who hope to capture substantial biosimilar savings will need to encourage biosimilar use through plan design, as well as through incentives and education for both providers and plan members.

The report proposes that savings from biosimilar use could be shared with members, and that plans could incentivize physicians to use biosimilars in appropriate contexts, for example.

In a statement on the report, Juliana Reed, president of the Biosimilars Forum, said that “Multi-stakeholder engagement—from Congress and the White House to physicians and payers—is crucial to overcoming barriers that inhibit [the] US biosimilars market from taking hold. Given their unique positioning to negotiate health plan designs with providers, employers are integral to this effort. This new analysis confirms that employers can also help patients and the health care system realize the savings potential of biosimilars, if they actively invest in promoting biosimilars utilization.”


 

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