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during the same time period in 2015-2019, according to an analysis published in Arthritis and Rheumatology.
The use of the biosimilars also was associated with cost savings at the VAMC, but not at the academic medical center, which illustrates that insufficient financial incentives can delay the adoption of biosimilars and the health care system’s realization of cost savings, according to the authors.
Medicare, which is not allowed to negotiate drug prices, is one of the largest payers for infused therapies. Medicare reimbursement for infused therapies is based on the latter’s average selling price (ASP) during the previous quarter. Institutions may negotiate purchase prices with drug manufacturers and receive Medicare reimbursement. Biosimilars generally have lower ASPs than their corresponding reference therapies, and biosimilar manufacturers may have less room to negotiate prices than reference therapy manufacturers. Consequently, a given institution might have a greater incentive to use reference products than to use biosimilars.
An examination of pharmacy data
The VA negotiates drug prices for all of its medical centers and has mandated that clinicians prefer biosimilars to their corresponding reference therapies, so Joshua F. Baker, MD, of the University of Pennsylvania and the Corporal Michael J. Crescenz VAMC, both in Philadelphia, and his colleagues hypothesized that the adoption of biosimilars had proceeded more quickly at a VAMC than at a nearby academic medical center.
The investigators examined pharmacy data from the University of Pennsylvania Health System (UPHS) electronic medical record and the Corporal Michael J. Crescenz VAMC to compare the frequency of prescribing biosimilars at these sites between Jan. 1, 2015, and May 31, 2019. Dr. Baker and his associates focused specifically on reference infliximab (Remicade) and the reference noninfusion therapies filgrastim (Neupogen) and pegfilgrastim (Neulasta) and on biosimilars of these therapies (infliximab-dyyb [Inflectra], infliximab-abda [Renflexis], filgrastim-sndz [Zarxio], and pegfilgrastim-jmdb [Fulphila]).
Because Medicare was the predominant payer, the researchers estimated reimbursement for reference and biosimilar infliximabs according to the Medicare Part B reimbursement policy. They defined an institution’s incentive to use a given therapy as the difference between the reimbursement and acquisition cost for that therapy. Dr. Baker and colleagues compared the incentives for UPHS with those for the VAMC.
VAMC saved 81% of reference product cost
The researchers identified 15,761 infusions of infliximab at UPHS and 446 at the VAMC during the study period. The proportion of infusions that used the reference product was 99% at UPHS and 62% at the VAMC. ASPs for biosimilar infliximab have been consistently lower than those for the reference product since July 2017. In December 2017, the VAMC switched to the biosimilar infliximab.
Institutional incentives based on Medicare Part B reimbursement and acquisitions costs for reference and biosimilar infliximab have been similar since 2018. In 2019, the institutional incentive favored the reference product by $49-$64 per 100-mg vial. But at the VAMC, the cost per 100-mg vial was $623.48 for the reference product and $115.58 for the biosimilar Renflexis. Purchasing the biosimilar thus yielded a savings of 81%. The current costs for the therapies are $546 and $116, respectively.
In addition, Dr. Baker and colleagues identified 46,683 orders for filgrastim or pegfilgrastim at UPHS. Approximately 90% of the orders were for either of the two reference products despite the ASP of biosimilar filgrastim being approximately 40% lower than that of its reference product. At the VAMC, about 88% of orders were for the reference products. Biosimilars became available in 2016. UPHS began using them at a modest rate, but their adoption was greater at the VAMC, which designated them as preferred products.
Tendering and a nationwide policy mandating use of biosimilars have resulted in financial savings for the VAMC, wrote Dr. Baker and colleagues. “These data suggest that, with current Medicare Part B reimbursement policy, the absence of financial incentives to encourage use of infliximab biosimilars has resulted in slower uptake of biosimilar use at institutions outside of the VA system. The implications of this are a slower reduction in costs to the health care system, since decreases in ASP over time are predicated on negotiations at the institutional level, which have been gradual and stepwise. ...
“Although some of our results may not be applicable to other geographical regions of the U.S., the comparison of two affiliated institutions in geographical proximity and with shared health care providers is a strength,” they continued. “Our findings should be replicated using national VAMC data or data from other health care systems.”
The researchers said that their findings may not apply to noninfused therapies, which are not covered under Medicare Part B, and they did not directly study the impact of pharmacy benefit managers. However, they noted that their data on filgrastim and pegfilgrastim support the hypothesis that pharmacy benefit managers receive “incentives that continue to promote the use of reference products that have higher manufacturer’s list prices, which likely will limit the uptake of both infused and injectable biosimilar therapies over time.” They said that “this finding has important implications for when noninfused biosimilars (e.g. etanercept and adalimumab) are eventually introduced to the U.S. market.”
European governments incentivize use of biosimilars
Government and institutional incentives have increased the adoption of biosimilars in Europe, wrote Guro Lovik Goll, MD, and Tore Kristian Kvien, MD, of the department of rheumatology at Diakonhjemmet Hospital in Oslo, in an accompanying editorial. Norway and Denmark have annual national tender systems in which biosimilars and reference products compete. The price of infliximab biosimilar was 39% lower than the reference product in 2014 and 69% lower in 2015. “Competition has caused dramatically lower prices both for biosimilars and also for the originator drugs competing with them,” wrote the authors.
In 2015, the government of Denmark mandated that patients on infliximab be switched to a biosimilar, and patients in Norway also have been switched to biosimilars. The use of etanercept in Norway increased by 40% from 2016 to 2019, and the use of infliximab has increased by more than threefold since 2015. “In Norway, the consequence of competition, national tenders, and availability of biosimilars have led to better access to therapy for more people in need of biologic drugs, while at the same time showing a total cost reduction of biologics for use in rheumatology, gastroenterology, and dermatology,” wrote the authors.
Health care costs $10,000 per capita in the United States, compared with $5,300 for other wealthy countries in the Organization for Economic Cooperation and Development. Low life expectancy and high infant mortality in the U.S. indicate that high costs are not associated with better outcomes. “As Americans seem to lose out on the cost-cutting potential of biosimilars, this missed opportunity is set to get even more expensive,” the authors concluded.
The U.S. Department of Veterans Affairs, the National Institutes of Health, and the American Diabetes Association contributed funding for the study. Dr. Baker reported receiving consulting fees from Bristol-Myers Squibb and Gilead, and another author reported receiving research support paid to his institution by Pfizer and UCB, as well as receiving consulting fees from nine pharmaceutical companies. Dr. Goll and Dr. Kvien both reported receiving fees for speaking and/or consulting from numerous pharmaceutical companies, including Pfizer.
SOURCES: Baker JF et al. Arthritis Rheumatol. 2020 Apr 6. doi: 10.1002/art.41277.
during the same time period in 2015-2019, according to an analysis published in Arthritis and Rheumatology.
The use of the biosimilars also was associated with cost savings at the VAMC, but not at the academic medical center, which illustrates that insufficient financial incentives can delay the adoption of biosimilars and the health care system’s realization of cost savings, according to the authors.
Medicare, which is not allowed to negotiate drug prices, is one of the largest payers for infused therapies. Medicare reimbursement for infused therapies is based on the latter’s average selling price (ASP) during the previous quarter. Institutions may negotiate purchase prices with drug manufacturers and receive Medicare reimbursement. Biosimilars generally have lower ASPs than their corresponding reference therapies, and biosimilar manufacturers may have less room to negotiate prices than reference therapy manufacturers. Consequently, a given institution might have a greater incentive to use reference products than to use biosimilars.
An examination of pharmacy data
The VA negotiates drug prices for all of its medical centers and has mandated that clinicians prefer biosimilars to their corresponding reference therapies, so Joshua F. Baker, MD, of the University of Pennsylvania and the Corporal Michael J. Crescenz VAMC, both in Philadelphia, and his colleagues hypothesized that the adoption of biosimilars had proceeded more quickly at a VAMC than at a nearby academic medical center.
The investigators examined pharmacy data from the University of Pennsylvania Health System (UPHS) electronic medical record and the Corporal Michael J. Crescenz VAMC to compare the frequency of prescribing biosimilars at these sites between Jan. 1, 2015, and May 31, 2019. Dr. Baker and his associates focused specifically on reference infliximab (Remicade) and the reference noninfusion therapies filgrastim (Neupogen) and pegfilgrastim (Neulasta) and on biosimilars of these therapies (infliximab-dyyb [Inflectra], infliximab-abda [Renflexis], filgrastim-sndz [Zarxio], and pegfilgrastim-jmdb [Fulphila]).
Because Medicare was the predominant payer, the researchers estimated reimbursement for reference and biosimilar infliximabs according to the Medicare Part B reimbursement policy. They defined an institution’s incentive to use a given therapy as the difference between the reimbursement and acquisition cost for that therapy. Dr. Baker and colleagues compared the incentives for UPHS with those for the VAMC.
VAMC saved 81% of reference product cost
The researchers identified 15,761 infusions of infliximab at UPHS and 446 at the VAMC during the study period. The proportion of infusions that used the reference product was 99% at UPHS and 62% at the VAMC. ASPs for biosimilar infliximab have been consistently lower than those for the reference product since July 2017. In December 2017, the VAMC switched to the biosimilar infliximab.
Institutional incentives based on Medicare Part B reimbursement and acquisitions costs for reference and biosimilar infliximab have been similar since 2018. In 2019, the institutional incentive favored the reference product by $49-$64 per 100-mg vial. But at the VAMC, the cost per 100-mg vial was $623.48 for the reference product and $115.58 for the biosimilar Renflexis. Purchasing the biosimilar thus yielded a savings of 81%. The current costs for the therapies are $546 and $116, respectively.
In addition, Dr. Baker and colleagues identified 46,683 orders for filgrastim or pegfilgrastim at UPHS. Approximately 90% of the orders were for either of the two reference products despite the ASP of biosimilar filgrastim being approximately 40% lower than that of its reference product. At the VAMC, about 88% of orders were for the reference products. Biosimilars became available in 2016. UPHS began using them at a modest rate, but their adoption was greater at the VAMC, which designated them as preferred products.
Tendering and a nationwide policy mandating use of biosimilars have resulted in financial savings for the VAMC, wrote Dr. Baker and colleagues. “These data suggest that, with current Medicare Part B reimbursement policy, the absence of financial incentives to encourage use of infliximab biosimilars has resulted in slower uptake of biosimilar use at institutions outside of the VA system. The implications of this are a slower reduction in costs to the health care system, since decreases in ASP over time are predicated on negotiations at the institutional level, which have been gradual and stepwise. ...
“Although some of our results may not be applicable to other geographical regions of the U.S., the comparison of two affiliated institutions in geographical proximity and with shared health care providers is a strength,” they continued. “Our findings should be replicated using national VAMC data or data from other health care systems.”
The researchers said that their findings may not apply to noninfused therapies, which are not covered under Medicare Part B, and they did not directly study the impact of pharmacy benefit managers. However, they noted that their data on filgrastim and pegfilgrastim support the hypothesis that pharmacy benefit managers receive “incentives that continue to promote the use of reference products that have higher manufacturer’s list prices, which likely will limit the uptake of both infused and injectable biosimilar therapies over time.” They said that “this finding has important implications for when noninfused biosimilars (e.g. etanercept and adalimumab) are eventually introduced to the U.S. market.”
European governments incentivize use of biosimilars
Government and institutional incentives have increased the adoption of biosimilars in Europe, wrote Guro Lovik Goll, MD, and Tore Kristian Kvien, MD, of the department of rheumatology at Diakonhjemmet Hospital in Oslo, in an accompanying editorial. Norway and Denmark have annual national tender systems in which biosimilars and reference products compete. The price of infliximab biosimilar was 39% lower than the reference product in 2014 and 69% lower in 2015. “Competition has caused dramatically lower prices both for biosimilars and also for the originator drugs competing with them,” wrote the authors.
In 2015, the government of Denmark mandated that patients on infliximab be switched to a biosimilar, and patients in Norway also have been switched to biosimilars. The use of etanercept in Norway increased by 40% from 2016 to 2019, and the use of infliximab has increased by more than threefold since 2015. “In Norway, the consequence of competition, national tenders, and availability of biosimilars have led to better access to therapy for more people in need of biologic drugs, while at the same time showing a total cost reduction of biologics for use in rheumatology, gastroenterology, and dermatology,” wrote the authors.
Health care costs $10,000 per capita in the United States, compared with $5,300 for other wealthy countries in the Organization for Economic Cooperation and Development. Low life expectancy and high infant mortality in the U.S. indicate that high costs are not associated with better outcomes. “As Americans seem to lose out on the cost-cutting potential of biosimilars, this missed opportunity is set to get even more expensive,” the authors concluded.
The U.S. Department of Veterans Affairs, the National Institutes of Health, and the American Diabetes Association contributed funding for the study. Dr. Baker reported receiving consulting fees from Bristol-Myers Squibb and Gilead, and another author reported receiving research support paid to his institution by Pfizer and UCB, as well as receiving consulting fees from nine pharmaceutical companies. Dr. Goll and Dr. Kvien both reported receiving fees for speaking and/or consulting from numerous pharmaceutical companies, including Pfizer.
SOURCES: Baker JF et al. Arthritis Rheumatol. 2020 Apr 6. doi: 10.1002/art.41277.
during the same time period in 2015-2019, according to an analysis published in Arthritis and Rheumatology.
The use of the biosimilars also was associated with cost savings at the VAMC, but not at the academic medical center, which illustrates that insufficient financial incentives can delay the adoption of biosimilars and the health care system’s realization of cost savings, according to the authors.
Medicare, which is not allowed to negotiate drug prices, is one of the largest payers for infused therapies. Medicare reimbursement for infused therapies is based on the latter’s average selling price (ASP) during the previous quarter. Institutions may negotiate purchase prices with drug manufacturers and receive Medicare reimbursement. Biosimilars generally have lower ASPs than their corresponding reference therapies, and biosimilar manufacturers may have less room to negotiate prices than reference therapy manufacturers. Consequently, a given institution might have a greater incentive to use reference products than to use biosimilars.
An examination of pharmacy data
The VA negotiates drug prices for all of its medical centers and has mandated that clinicians prefer biosimilars to their corresponding reference therapies, so Joshua F. Baker, MD, of the University of Pennsylvania and the Corporal Michael J. Crescenz VAMC, both in Philadelphia, and his colleagues hypothesized that the adoption of biosimilars had proceeded more quickly at a VAMC than at a nearby academic medical center.
The investigators examined pharmacy data from the University of Pennsylvania Health System (UPHS) electronic medical record and the Corporal Michael J. Crescenz VAMC to compare the frequency of prescribing biosimilars at these sites between Jan. 1, 2015, and May 31, 2019. Dr. Baker and his associates focused specifically on reference infliximab (Remicade) and the reference noninfusion therapies filgrastim (Neupogen) and pegfilgrastim (Neulasta) and on biosimilars of these therapies (infliximab-dyyb [Inflectra], infliximab-abda [Renflexis], filgrastim-sndz [Zarxio], and pegfilgrastim-jmdb [Fulphila]).
Because Medicare was the predominant payer, the researchers estimated reimbursement for reference and biosimilar infliximabs according to the Medicare Part B reimbursement policy. They defined an institution’s incentive to use a given therapy as the difference between the reimbursement and acquisition cost for that therapy. Dr. Baker and colleagues compared the incentives for UPHS with those for the VAMC.
VAMC saved 81% of reference product cost
The researchers identified 15,761 infusions of infliximab at UPHS and 446 at the VAMC during the study period. The proportion of infusions that used the reference product was 99% at UPHS and 62% at the VAMC. ASPs for biosimilar infliximab have been consistently lower than those for the reference product since July 2017. In December 2017, the VAMC switched to the biosimilar infliximab.
Institutional incentives based on Medicare Part B reimbursement and acquisitions costs for reference and biosimilar infliximab have been similar since 2018. In 2019, the institutional incentive favored the reference product by $49-$64 per 100-mg vial. But at the VAMC, the cost per 100-mg vial was $623.48 for the reference product and $115.58 for the biosimilar Renflexis. Purchasing the biosimilar thus yielded a savings of 81%. The current costs for the therapies are $546 and $116, respectively.
In addition, Dr. Baker and colleagues identified 46,683 orders for filgrastim or pegfilgrastim at UPHS. Approximately 90% of the orders were for either of the two reference products despite the ASP of biosimilar filgrastim being approximately 40% lower than that of its reference product. At the VAMC, about 88% of orders were for the reference products. Biosimilars became available in 2016. UPHS began using them at a modest rate, but their adoption was greater at the VAMC, which designated them as preferred products.
Tendering and a nationwide policy mandating use of biosimilars have resulted in financial savings for the VAMC, wrote Dr. Baker and colleagues. “These data suggest that, with current Medicare Part B reimbursement policy, the absence of financial incentives to encourage use of infliximab biosimilars has resulted in slower uptake of biosimilar use at institutions outside of the VA system. The implications of this are a slower reduction in costs to the health care system, since decreases in ASP over time are predicated on negotiations at the institutional level, which have been gradual and stepwise. ...
“Although some of our results may not be applicable to other geographical regions of the U.S., the comparison of two affiliated institutions in geographical proximity and with shared health care providers is a strength,” they continued. “Our findings should be replicated using national VAMC data or data from other health care systems.”
The researchers said that their findings may not apply to noninfused therapies, which are not covered under Medicare Part B, and they did not directly study the impact of pharmacy benefit managers. However, they noted that their data on filgrastim and pegfilgrastim support the hypothesis that pharmacy benefit managers receive “incentives that continue to promote the use of reference products that have higher manufacturer’s list prices, which likely will limit the uptake of both infused and injectable biosimilar therapies over time.” They said that “this finding has important implications for when noninfused biosimilars (e.g. etanercept and adalimumab) are eventually introduced to the U.S. market.”
European governments incentivize use of biosimilars
Government and institutional incentives have increased the adoption of biosimilars in Europe, wrote Guro Lovik Goll, MD, and Tore Kristian Kvien, MD, of the department of rheumatology at Diakonhjemmet Hospital in Oslo, in an accompanying editorial. Norway and Denmark have annual national tender systems in which biosimilars and reference products compete. The price of infliximab biosimilar was 39% lower than the reference product in 2014 and 69% lower in 2015. “Competition has caused dramatically lower prices both for biosimilars and also for the originator drugs competing with them,” wrote the authors.
In 2015, the government of Denmark mandated that patients on infliximab be switched to a biosimilar, and patients in Norway also have been switched to biosimilars. The use of etanercept in Norway increased by 40% from 2016 to 2019, and the use of infliximab has increased by more than threefold since 2015. “In Norway, the consequence of competition, national tenders, and availability of biosimilars have led to better access to therapy for more people in need of biologic drugs, while at the same time showing a total cost reduction of biologics for use in rheumatology, gastroenterology, and dermatology,” wrote the authors.
Health care costs $10,000 per capita in the United States, compared with $5,300 for other wealthy countries in the Organization for Economic Cooperation and Development. Low life expectancy and high infant mortality in the U.S. indicate that high costs are not associated with better outcomes. “As Americans seem to lose out on the cost-cutting potential of biosimilars, this missed opportunity is set to get even more expensive,” the authors concluded.
The U.S. Department of Veterans Affairs, the National Institutes of Health, and the American Diabetes Association contributed funding for the study. Dr. Baker reported receiving consulting fees from Bristol-Myers Squibb and Gilead, and another author reported receiving research support paid to his institution by Pfizer and UCB, as well as receiving consulting fees from nine pharmaceutical companies. Dr. Goll and Dr. Kvien both reported receiving fees for speaking and/or consulting from numerous pharmaceutical companies, including Pfizer.
SOURCES: Baker JF et al. Arthritis Rheumatol. 2020 Apr 6. doi: 10.1002/art.41277.
FROM ARTHRITIS & RHEUMATOLOGY