The impact of biosimilar entry on drug costs-medical economist

Although generic drugs often replace branded drugs after they lose market exclusivity, the adoption rate of biosimilar products is usually slow. In addition, compared with generic small molecule drugs, biosimilars are relatively more expensive. Then a key question is how much payers can save by switching to biosimilars after losing exclusivity.

This is the question raised by a paper Dixon and Kent (2021) Designed to answer. The author studied how the prices of generic or biosimilar brands and doctor-managed drugs have changed before 2005. They use 5 data sources to evaluate these price changes:

Using these data, the authors implemented a linear, fixed-effect time series regression model to estimate the price changes (ie, yes/no) after the introduction of generic/biosimilar competitors and the number of generic/biosimilar competitors. market. In this way, they found:

After excluding the outliers of all drugs in the study, the existence of 1 generic drug competitor is related to an average price reduction of 14.9% in the bundled ASP, 2 generic drug competitors are related to an average price reduction of 32.7%, and 3 generic drug competitors are related The average price cut was 52.0%.The average total price of other competitors dropped by 68.6%; all estimated declines are from the price of brand-name drugs in the previous quarter of the generic drug competition, rather than the prices of fewer generic drug competitors

The paper shows that if the transition to biosimilar products was faster, Medicare could have saved more money.

During the modeling period from 2015 to 2019 and the years when medical insurance expenditures on biologics and related biosimilars were reported, medical insurance and its beneficiaries spent on these 6 biologics and their biosimilars $6.5 billion: Neuupogen (filgrastim), Remicade (infliximab), Neulasta (pegfilgrastim), Avastin (bevacizumab), Herceptin (trastuzumab) and Epogen (epoetin alfa)… we estimate bundled biosimilars The reimbursement model will be related to a $1.6 billion or 26.6% reduction in spending on these therapies

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