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A recent study projects that U.S. employers may see minimal savings to overall healthcare costs resulting from the introduction of biosimilars to the U.S. market.
Executives should monitor how quickly FDA is able to approve biosimilars and consider what the treatment outcomes are for patients using such drugs, according to a new study.
The study, “Understanding Biosimilars and Projecting the Cost-Savings to Employers,” projects that U.S. employers may see minimal savings to overall healthcare costs resulting from the introduction of biosimilars to the U.S. market. The study was commissioned by AbbVie, but independently developed by Milliman, an independent actuarial firm.
“Much of the discussion to date about biosimilars has focused on the potential impact on healthcare costs,” says study author Frank Kopenski Jr. ASA, MAAA, principal and consulting actuary, Milliman.
Biosimilars impact only about 5.2% of the total employer healthcare spend for a commercially active population, according to Kopenski. With the anticipated entry of biosimilars into the U.S. market, the study projects that in 2019:
• Total healthcare spending for employers covering active employees and retirees could be reduced by up to 1% (0.4% to 1.1%).
• Employers may see a reduction of between 2.6% and 7.6% of their total prescription drug spending for active employees.
“The savings will be incremental and increasing over the next six years as more biosimilars are approved by FDA,” he says. “A similar expected savings can be achieved by increasing the generic copayment by $1.”
The penetration rate and price difference are not known at this time and are the two main factors in determining savings, he explains.
“Benefit design may insulate the patient from any price difference and thus treatment choice may not be dictated by treatment cost,” Kopenski says.
“At this time, execs do not need to do anything except wait and see how biosimilars are received by physicians and patients, and monitor what the penetration rate and price difference is by product,” he continues. “At some point in the future, formularies and benefit design may change to steer more patients toward biosimilars, provided there are acceptable treatment outcomes.”