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IQVIA: Rebates put Biosimilar Manufacturers at a Disadvantage


Rebates, falling prices, and rebate walls, where drug manufacturers agree to a certain price in exchange for an exclusive contract with payers, limit competition and create a dynamic of misaligned incentives.

Misaligned incentives around commercial payer rebates and rebate walls can slow the uptake of biosimilars. In fact, it took four years for the Remicade (infliximab) biosimilars to receive a formulary position to encourage use, finds IQVIA Institute for Human Data Science’s recent report on biosimilars.

Remicade is a biologic used to treat patients with rheumatoid arthritis, psoriatic arthritis, plaque psoriasis and Crohn’s disease and ulcerative colitis. There are four FDA-approved biosimilars: Avsola, Inflectra, Ixifi and Renflexis. Ixifi, however, is not available in the United States.

IQVIA found that even after the launch of infliximab biosimilars, most commercial plans preferred the originator. As formulary status improved for the infliximab biosimilars, market share increased over time, which was about four to five years for meaningful uptake. “This dynamic has been noted as being driven by rebating, however a lack of transparency around rebating makes it hard to ascertain the exact dynamics that took place,” IQVIA wrote in its report.

Payer dynamics and the declines in average sales price (ASP) of biosimilars after launch could threaten the long-term sustainability of biosimilars, the report suggests. Across all biosimilars, the average sales prices have declined about 50% within the first 13 quarters.

Ensuring a sustainable biosimilar system is crucial, IQVIA researchers said, for the overall healthcare system. Over the past decade, biosimilars of infused biologics have significantly reduced health care costs, particularly within Medicare, saving billions of dollars. Biosimilars have been associated with $56 billion in savings between 2013 and 2022, according to IQVIA. However, challenges persist in the reimbursement and procurement systems, threatening the long-term sustainability of biosimilars. Biosimilar development can cost between $100 million and $300 million, finds McKinsey.

But payer demand for rebates and discounts can put biosimilar manufacturers at a disadvantage. Rebate walls, where drug manufacturers agree to a certain price in exchange for an exclusive contract with payers, limit competition.

The report was intended to create a baseline of foundational data to better understand biosimilar dynamics with a particular focus on infused biosimilars that fall under the Medicare Part B buy and bill program. Using various case studies, the researchers wanted to gain understanding into the key issues that can result in suboptimal functioning for the U.S. biosimilar market.

The researchers suggested that CMS adjust its existing payment policies through regulatory actions to enhance add-on payments and address issues with lagging ASP and the impact of rebates.

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