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Economic Impact of Biosimilars in Oncology


Bruce Feinberg, DO: Kathy set us up beautifully on the issue of economic impact. There are so many layers of the economic impact. We’ve touched on them. I want to focus our thoughts on them. It’s no longer about the operational aspect. It’s not about the efficacy. It’s not about the way in which biosimilars are approved.

Let’s talk numbers. I want a brief response, and then I want to dig in. You’ve all described that there’s effort involved in the adoption of biosimilars, and it raises the question, on an economics argument alone, is the juice worth the squeeze? Who is going first?

Michael Diaz, MD: I can go first. I have to say that in value-based contracts, it will definitely accelerate your ability to get to your goal, and therefore it provides incentives. With that in mind, we’re seeing that it’s definitely beneficial.

Bruce Feinberg, DO: All right.

Bhavesh Shah, RPh, BCOP: I think you need to look at it from a global perspective, right? If we don’t adopt biosimilars, how do you actually make room for more innovative therapies? There have been a lot of great models out there that basically show what happens to our cost of medications and biologics for the next 3 or 4 years if we don’t adopt biosimilars. It’s going to go up by $100 billion.

That should be the biggest reason, but I also think that there are so many different factors that play a role. It all depends on what type of model your institution uses. If you’re a risk-based model, and that’s how you practice, then you’re the provider and the payer, so you’re going to be using more biosimilars.

If you’re in a revenue-generating model, then that is going to drive your decision to use more costly drugs. As Kathy mentioned, ASP [average selling price] is important, and this is what also influences some of the biosimilar companies not to have aggressive pricing. They don’t want to dilute the ASP so much because it doesn’t make it appealing for providers to use an ASP they’re eventually going to lose money on.

There are a lot of economic factors, but we need to think about the global picture of the price we’re going to pay for adopting the bigger and more costly innovations we’re seeing, especially in oncology with CAR [chimeric antigen receptor] T-cell therapy and the combination of immunotherapies that are coming out.

Bruce Feinberg, DO: Kathy, is the juice worth the squeeze?

Kathy W. Oubre, MS: Yes. I think we can all agree that health care costs are too high.

Bruce Feinberg, DO: When you look at it at a practice level and a prescriber level, and you look at your contracts, rebates, and drug costs, I’m hearing that differences to the bottom line are 10% or less. Are they greater than that? For the most part, I’m not hearing that patients are seeing a lot of the impact. In the current modeling or current benefit design, if they’ve got a $5000 deductible, they’ve already hit it by the time they’re getting on a drug that’s a biosimilar. They have surgery or whatever else, and whether their deductible is $5000 or $10,000, they’ve consumed it.

Kathy W. Oubre, MS: Right.

Bruce Feinberg, DO: They don’t have a drug coinsurance, at that point, for infusional therapy. Most do not in design, so nothing is happening at the patient level. From an economic preference, it is happening at the practice level. If that difference is only 10%, is the juice worth the squeeze?

If you’re telling me it’s 20% or 30%, I’m going to be all ears. But what is that difference?

Kathy W. Oubre, MS: I think it’s a little more complicated than that. Yes, it’s worth the squeeze. I believe in the innovation. I believe in the science. The cost of health care is too high. When we talk about cost to the patient, yes, there is a $5000 deductible. I’m not going to argue that. But at times it’s like buying a car for people who are already in a financially toxic situation. Whether that’s $5000 within 60 days or because of a biosimilar, I can make that not due for 120 or 180 days, it allows them some flexibility. Therefore, it decreases a bit of that financial stress on them. Margins are tight in practices. As for the 10%, we see more. I see closer to 20%, but even 10% is better than 5%.

Again, it’s not just that 1 thing I’m looking at. I’m looking at the whole larger picture. As long as we can keep the biosimilar market open and can continue to increase physician confidence and adoption, that the market will continue to grow, and those advantages will continue to grow as well.

Bruce Feinberg, DO: Karina, is the juice worth the squeeze at the payer level?

Karina Abdallah, PharmD: Year 1, no, the juice is not worth the squeeze. In the short game, no. That’s a general statement. You’ve got some drugs that are worth the squeeze right away. Most are not. It’s really the long game at this point. We’re looking at a 3- to 5-year strategy on our end, which is how we work anyway. I’ll give you an example. I won’t mention any names, but we’ve had to take several year-1 losses to be able to make a biosimilar work in year 2 and beyond.

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