The United States has missed out on almost $20 billion in savings as a result of not having a competitive biosimilar market, according to findings from the Pacific Research Institute.
An analysis conducted by the Pacific Research Institute (PRI) found that the United States lost out on nearly $20 billion in potential savings since 2018 by not having access to a stronger, more competitive biosimilars market. PRI is a think tank with an emphasis on promoting free market economics.
Additionally, in 2020 alone, the United States could miss out on potential savings of as much as $10.3 billion, looking at the savings if biosimilars were to obtain 75% of the market share in their respective drug classes, PRI said. Savings could have amounted to $6 billion in 2020 if biosimilars represented 25% of the market for the 9 biosimilar groups.
Currently, with the exception of filgrastim biosimilars, biosimilars represent less than one-fifth of the market for their respective drug types in the United States, said the analysis’ author Wayne Winegarden, PhD, senior fellow in business and economics at PRI and director of PRI’s Center for Medical Economics and Innovation, in a recent interview with The Center for Biosimilars®.
The analysis found that if biosimilars overall had a 75% market share for their biologic groups, the US government could save as much as $7 billion annually, state Medicaid programs could save $1.2 billion annually, and commercial payers could save $3.3 billion annually.
If biosimilars attained 75% market share, individual states could see savings ranging from $8.7 million in Wyoming to $734 million in California, the report said.
Why the United States Missed Out
“However, without effective policy and market reforms, it will be difficult for the health care system to realize these large potential savings that biosimilars offer,” Winegarden said.
The United States has faced considerable barriers to biosimilar uptake, including prior authorization requirements, lack of interchangeability designations, anticompetitive practices from originator manufacturers, patent disputes, and lack of education among patients and health care providers.
These barriers lead to patients, employers, and the government paying for higher-cost originator biologics instead of less expensive biosimilars.
“Now more than ever, Americans need cost-savings solutions that give patients greater access to safe and effective treatment options. This analysis proves what we already know: The longer we wait to access and use biosimilars, the more money the government, states, businesses, and patients will lose,” said Juliana Reed, MS, president of the Biosimilars Forum, in a statement about Winegarden’s report. Reed also serves as a vice president and Global Corporate Affairs lead for Pfizer.
Potential Legislative Solutions
Currently, 8 policy solutions have been introduced in Congress that would help make up for lost savings by encouraging competition, increasing access to biosimilars, and providing direct cost savings to employers and taxpayers, according to the Biosimilars Forum, a subgroup within the Association for Accessible Medicines, which represents large biosimilars manufacturers.
“As Congress looks toward rebuilding the economy in the years to come, biosimilars are a bipartisan cost-saving solution,” Reed said.
Companion bills in both the House and the Senate aimed at establishing shared savings models have been introduced and referred to committees in their respective congressional chambers. Additionally, a Senate bill was introduced to waive out-of-pocket expenses for biosimilars within Medicare Part B.