Biosimilar Competition Linked to Lower Out-of-Pocket Costs for Medicare Patients

Biosimilar competition was associated with meaningful reductions in out-of-pocket spending for patients with Medicare coverage receiving clinician-administered biologics, according to a new analysis of national claims data.¹ The findings suggested that, unlike trends seen in commercially insured populations, lower biologic prices following biosimilar entry were more likely to translate into direct savings for Medicare beneficiaries.

Biosimilar competition significantly reduces out-of-pocket costs for Medicare patients, enhancing affordability for biologic therapies and improving access. | Image credit: digicomphoto - stock.adobe.com

The cross-sectional event study, published in JAMA Network Open, evaluated changes in annual out-of-pocket spending among Medicare Advantage enrollees who received 1 of 7 biologic drugs that later faced biosimilar competition. The analysis included filgrastim, infliximab, epoetin alfa, pegfilgrastim, bevacizumab, rituximab, and trastuzumab, which first encountered biosimilar competitors between 2013 and 2019.²

The study was conducted amid ongoing questions about whether biosimilar-related price reductions meaningfully benefit patients. Prior research among commercially insured populations found that out-of-pocket costs did not consistently decline after biosimilar entry, largely because patient cost sharing is often based on negotiated reimbursement rates rather than drug prices.³ In contrast, Medicare reimbursement for clinician-administered biologics is closely tied to average sales prices, raising the possibility that biosimilar competition could more directly reduce patient spending.¹

Using Optum’s deidentified Clinformatics Data Mart Database, the investigators identified 273,774 patient-years from 2009 through 2022. Patients had a mean age of 76 years, 57.6% were female, and more than half received biologic therapies as part of cancer care. Nearly half of administrations occurred in outpatient clinics, and 13.0% of patient-years involved receipt of a biosimilar. Patients receiving low-income subsidies or who were dually eligible for Medicare and Medicaid were excluded because of their substantially lower cost-sharing requirements.

Across all 7 biologics, mean annual out-of-pocket spending declined after biosimilar competition began. In the composite analysis, adjusted mean annual spending decreased by $94, from $233 in the year before biosimilar entry to $165 by 4 years after competition. Declines were observed for each drug, although the magnitude varied. Rituximab was associated with the largest reduction, while filgrastim showed the smallest change.

The proportion of patient-years with zero out-of-pocket costs remained stable at approximately 41% before and after biosimilar entry, indicating that savings were concentrated among patients who already incurred cost sharing. Among patient-years with nonzero out-of-pocket spending, mean annual costs declined by $163 over the 4-year postcompetition period.

Reductions were most pronounced among patients who paid coinsurance or deductibles, whose cost sharing is directly tied to drug prices. In this group, mean annual out-of-pocket spending decreased by nearly $200 after biosimilar competition. By contrast, patients who paid only flat copayments did not experience significant changes in out-of-pocket costs, a finding consistent with the structure of fixed-fee cost sharing.

Sensitivity analyses showed that reductions in out-of-pocket spending occurred across most of the spending distribution, with the largest absolute decreases among patients with higher baseline costs. Trends in Medicare average sales prices mirrored these findings, with prices for originator biologics generally declining after biosimilar entry while biosimilar prices remained lower and continued to decrease over time.

The authors noted several limitations. Claims data did not capture manufacturer assistance programs, which may have led to overestimation of patient spending. The analysis was limited to Medicare Advantage enrollees and may not generalize to patients in traditional fee-for-service Medicare. Changes in plan design over time could also have influenced out-of-pocket costs independently of biosimilar competition. Additionally, the findings were specific to clinician-administered biologics and do not apply to pharmacy-dispensed biologics covered under Medicare Part D.

Overall, the results suggested that biosimilar competition was associated with lower out-of-pocket spending for Medicare patients, particularly for those whose cost sharing reflected drug prices. The findings highlighted the potential for timely biosimilar entry and sustained competition to improve affordability and access to biologic therapies for older adults.

References

1. Riegler JS, Kesselheim AS, Rome BN. Out-of-pocket spending for biologic drugs after biosimilar competition for Medicare patients. JAMA Netw Open. 2026;9(1):e2554235. doi:10.1001/jamanetworkopen.2025.54235
2. Biosimilar approvals. The Center for Biosimilars^®️. Updated December 22, 2025. Accessed January 21, 2026. https://www.centerforbiosimilars.com/biosimilar-approvals
3. Feng K, Russo M, Maini L, et al. Patient out-of-pocket costs for biologic drugs after biosimilar competition. JAMA Health Forum. 2024;5(3):e235429. doi:10.1001/jamahealthforum.2023.5429