Shared Savings, Add-on Payments Could Save Medicare Billions, Biosimilars Forum Says

The Biosimilars Forum said this week that if Congress enacted certain changes, the federal government and beneficiaries could save billions of dollars in Medicare Part B.

The industry group said it commissioned a scoring analysis from Avalere Health examining options that could potentially reduce out-of-pocket costs (OOP) and federal spending in the range of $1.9 billion to $5.2 billion between 2020 and 2029, and cut beneficiary costs by $2.2 billion to $3.3 billion.

These actions could propel market share for biosimilars to 26% to 46% of the market. The group said their proposal follows the administration’s 2020 budget proposal that calls for “harnessing payment and cost-sharing incentives to increase biosimilar adoption.”

“It’s clear that incentivizing biosimilars will lower health care costs for patients and taxpayers,” said Juliana Reed, president of the Biosimilars Forum, in a statement. “Today’s scoring analysis proves that biosimilars need to be part of the solution to lower healthcare costs, but it will require proactive policy action to unlock these savings.”

The Avalere analysis was based on a range of assumptions. For instance, Congress could require CMS to use the Center for Medicare and Medicaid Innovation (CMMI) to create models designed to increase access to biosimilars, including a shared savings model. Medicare savings stemming from prescribing a biosimilar, as compared to a reference biologic, would be shared with providers.

Using 3 assumptions of a low, medium, and high provider-induced demand assumption, the shared savings program for providers in Medicare Part B would result in a budget-neutral outcome of $0 billion to a $3 billion decrease over the fiscal year 2020-2029 budget window. Average biosimilar market share is projected to reach 27% to 54% of the market, depending on the scenario.

Another option could involve using an additional add-on payment. This could save $8.2 billion in health costs over the time frame. This policy would incentivize doctors to prescribe biosimilars by increasing the amount they are paid in Medicare Part B.

Current proposals under consideration in Congress include a measure in the Senate to improve the Purple Book, crack down on patent abuses, and increase the amount of biosimilar education.