Biologics are often used to treat a range of life-threatening and debilitating conditions such as cancers, autoimmune diseases, and kidney diseases. They are made from living cells, structurally complex, and most often handled and administered to patients via IV infusion or injection by a health care professional in a hospital outpatient department (HOPD) or physician office (PO).
The original biologic, known as the innovator biologic, sometimes has substitutes, which are known as biosimilars. Biosimilars are exactly as their name implies: highly similar versions of the medicine with no clinically meaningful difference in effectiveness or safety from the innovator biologic. In recent years, a robust biosimilar marketplace has emerged, driving substantial savings for patients, employers, and insurers. As of February 2023, there are 29 biosimilars on the market competing against 11 innovator biologics.
Competition in the evolving market suggests innovator biologics and biosimilars both are competing on price to retain or gain market share. However, as HOPDs continue to mark up the price of biologics — and at rates that are higher and faster than those for biosimilars — and consolidation drives care away from POs into HOPDs, employers will continue to see costs go up, and the savings potential from biosimilars may not be fully realized.
In this Issue Brief, we focus on waste caused by pricing failure related to the cost of biosimilars. We conduct an analysis of site-of-treatment price differentials for innovator biologics and biosimilars. Specifically, we examine whether the potential cost savings from biosimilars is impacted by whether patients seek care from POs or higher cost HOPDs, as the trend towards HOPDs might be impacting potential savings.
Key Findings:
- Use of biosimilars among individuals with employment-based health benefits in the United States is growing as more biosimilars enter the market. Among the nine innovator biologics with available biosimilars as of October 2022, most of the biosimilars were launched in the United States in 2019 and 2020.
- With the exception of biosimilars for Neupogen, the market share for the innovator biologics was between 65 percent and 87 percent in 2020.
- HOPDs were sometimes more likely and sometimes less likely than POs to use innovator biologics over biosimilars. HOPDs were more likely than POs to use Neupogen, Herceptin, and Rituxan over their biosimilars. However, POs were more likely than HOPDs to use Remicade and Avastin. HOPDs and POs were about equally likely to use Neulasta and Epogen/Procrit.
- For all seven innovator biologics examined, allowed charges were higher in HOPDs than in POs. HOPD markups on innovator biologics are roughly doubling costs for employers and minimizing savings that could be achieved through biosimilar competition. Allowed charges were about double in 2019, averaging 98 percent higher. In 2020, allowed charges were more than twice as high in HOPDs, averaging 121 percent.
- In 2020, the HOPD markup ranged from 75 percent to 183 percent. The HOPD markup increased between 2019 and 2020 for all innovator biologics examined.
- Allowed charges for biosimilars were higher in HOPDs than in POs. However, the markups for biosimilars were lower than the markups for innovator biologics. Biosimilar markups in HOPDs averaged 87 percent in 2019 and 101 percent in 2020. In 2022, HOPD markups ranged from 59 percent to 141 percent. The HOPD markup increased for 7 of the 9 biosimilars examined.
Figure 1 Figure 13 Figure Figure 1 9 1 Employer Opinion on Most Effective Tactics to Control Health Care Costs Figure 7 HO HO PD/PO PD/PO Markup Markup , Rem , Avas icad tin e an an d d Bio Bio sim sim ilars, ilars, 2019 2019 –2020 –2020 HOPD/PO Markup, Epogen/Procrit and Biosimilars, 2019 –2020 Fi gure 10, HOPD/PO Markup, Neula sta and Biosimilars, 2019–2020......................................................................... 13 w Using Da Ce o rnc e t a and M m the lus or thr ec le ion oug lik aens ly h b s e e td ha t iosi ho cn HOP lam im ds ila s d r D c as t om tao , pw us ee tit e c io a Re n. lcm ula Aic llow ta ed de e t d he a nd c ha av A re v gra e ast s ge in. w e uni rH eOP t apbD ro ic s a ut e nd b dy oub spe POs lec in 201 ifi wc e rinn e a 9, a ov boaut v tor e e r a q bg ua iolog ing lly 98 ic lik or e ply e b rtc iosi o ent us m e highe ila N re d ula rru . g st In , a Market Paul Fr Shar onst ein is Director of Health Benefits Research at the Employee Benefit Research Institute (EBRI). M. Location, Location, Location: Spending Differences for HOPD/PO Markup Most E , fIn fecti no ve vatSor econ Bio d-Mos lo t E gi ffecs ctiveand Thi Bio rd-Mos sim t Effe ilars, ctive 2019 –2020 2 2019 2020 See https://www.fda.gov/news-events/press-announceme 20 20 nt 19 19 s/re20 20 ma 20 20rks-fda-commissioner-scott-gottlieb-md-prepared- si and te of Epser og 20 e vn ic 20 /P e, , roc a allow nd rit.y eeda rc ha byr g de ivs w iding er et he mor tot e a tha l allow n twic ede a a m s high ount b in HOP y the tD ot s, a al nu vem rab ge ing r of 12 u1 p nits. er c The ent. H OPD over PO markup Christopher Roebuck is President and CEO of RxEconomics, LLC. This Issue Brief was written with assistance from While HOPDs tend to charge higher prices for all medicines relative to the PO, higher HOPD markups on biologic For Biolog Figur ee a c11 h o , f th Hic OP eD seve /P aO n nM d d arr B ug kup, sios e t Es, w pogim e e n/ de Pil treoc ra m ritr ine M and d the e Biosi d prm i oc p ila ora rts, ion o t2019 ion f ut –s 2020 iliza by tion t ................................ Si hat t we as c of apt Tr ured ................................ e bya the tme innovn ator t 14 2019 2020 14 140% 0% 200% S de tli ud very y S -ba romp oking les -institution-release-fdas. was derived as (1 - HOPD/PO). medt ic he ine P ha Is ns rma are tit cu y M r te ou an ’s r a gge hly em sea en dtoub r Tec ch a hn lin ind qu 133% g es ceost to dit M s for or ania age l st e Sm p aec ff pis. A loy alty Me eny rs a di c vat nd ie ion wm ss e ini xm prie zin ssg e d sa in t vings th his rea pto r ctoul ard e b tho e a se chie of vte he d tahr utoug horh b and iosi sh m ould ilar biologics compared with each of its biosimilars. Both medical and pharmacy claims were included in the analysis. 140% • In 2020, the HOPD markup ranged from 75 percent to 183 percent. The HOPD markup increased between Fi By gur Pea 12 ul Fro , HOPns D/P tin, P O Mah.D., rkup, E Hemplo rceptin a yend e Ben Biosie m fiila t R rs, 2 ®es01 ea 9rch I –2020ns ................................ titute, and M. Chris ................................ topher Roebuck, ....... 14 3 not b Oe ffe a ring sc r Cons ibed um ter- o Di the rec te offic d Hee alr th P s, t larns us (t ee ith eer as s, or a n o otphe tion o r sponsor r full s of EBRI, Employee Benefit Research Institute-Education c For om tp his eti tst ion. udy , we analyzed the Merative™ MarketScan Commercial Database, which includes member enrollment See https://www.amerisourcebergen.com 177% /-/media/assets/amerisourcebergen/biosimilars-page/sgs-biosimilars- D ispensed prescriptions were converted into doses for equivalence to medical infusions/injections. The innovator 180% June 29, 2023 • No. 585 replacement) 2019 and 2020 for all innovator biologics examined. Ph.D., RxEconomics, LLC and Research Fund (EBRI-ERF), or t117% heir staffs. Neither EBRI nor EBRI-ERF lobbies or takes positions on specific information and paid claims on nearly 25 million people with private health insurance. For each year from 2013 through usma 1 1rk 2 20 0e % % tlandscape-020623---copy.pdf. 121% Fi biolog gureic 13 s m , H aOP rkeD t /P shO arM e a w ra kup, s ca A lcv ula ast te in a d for nd e Baiosi ch ye mila arr s, 201 during 9 – the 2020 study p ................................ eriod. ........................................... 15 Figure 6 Pharmacy Management Techniques to Manage Traditional Medications Findings Biosimilars can offer patients a more affordable treatment option than innovator biologics. Though uptake of biosimilars 120% policy proposals. EBRI invites comment on this research. 2020 (i.e., the study period), we subset all available data to the cohort of full-time active employees and their 160% 108% 4 • Allowed charges for In no biosi vm atila or rs w Bio erlo e highe gics rMarket in HOPDShare, HO s than in POs PD . How vs. evPO er, , the 2020 markups for biosimilars were High-Touch Health Concierge or Navigator Services (i.e., program that See https://www.medpac.gov/wp-content/uploads/2022/07/July2022_MedPAC_DataBook_Sec10_v2_SEC.pdf. 148% Use is gr ow of b ing, iosim use ilarof s a bm iosi ong mila ind rsiv aidua mong ls w indiv ith e idua mpls loy w m ite h e nt-m ba psed loym he ent alt -b h b ased ene he fits alt in t h b he ene Unit fits in t ed St he at e Unit s ise g dr ow Staing tes is as m vaor rieed . Figure 14, HOPD/PO Markup, Rituxan and Biosimilars, 2020 ................................................................................... 15 d Sim epila end rly e, nt for s, le ea ss ch o tha f th he n 65 ye lpse e mp seve loy ar ee n s of sd nrav ug a ig g ate e sets , he w, aho lth the ) w e sh re a rce ont of inu usousl e byy si etnr e olle of ser d w vic ithin e w a es a ach ls c o ad leenda riverd y . eSp are in a cific a non lly, -w caep itated Location, Location, Location: Spending Differences for lower than the markups for innovator biologics. Biosimilar markups in HOPDs averaged 87 percent in 2019 and 139% PO HOPD Intr 10o 0% duction 100% 101% A 5 mong the seven innovator biologics with available biosimilars examined in this paper, most of the biosimilars were c ontinue to enter the market. 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Sample means for 2020 are shown in Figure 2. 60 60% % b a t bhe d iosi iolog m m c ini m op a ic ila st rs y ke r, e d rt m p e e r for d liv a int rte k o , r e ee p a or td c a is h b tin HOP d ie st ow nt rill as v nloa nd in it D ia b d s siIolog v V infu tinf his ara ie ic nc rs fr e . si y p Ot on .o om rhe t or solely for r6 p w inj ise e er, c cte tion b he nt p t m eo ry a sona 58 ra k e he p tl a esh arlt c na e h drnt e c nonc a for (rFi e gom p tur he rofe e m inn 4 e ss ). rov c iona ia For a l use tor l in ne b , aa iol rp ly hospit rog ov all of ic ide s a d w l o t a he tha s ut b inn tp ea a tll ha w tov ie ent a etn r or d d65 e cb p op iolog a prie e tr m s cic e e re nt nt st a in 8 71% HCPCS 80%is a collection of s Mo tarnd e Foc ard usiz ed e S d trc ao teg de ys o n Hi thagh t re -Co psre t Cl se aint msmedical procedures, supplies, products, and services. The codes 71% 60% 69% Figure 2 69% 49% A T A G L A N C E (HOPD) or physician office (PO). Some of the benefits of biologics include the reduction of the number relapses, e and xam a 87 ine 70 ny % p d a e, nd rc HeOP a nt ll c D in 202 op and yright 0 P, Oa a nd ac nd count t he ot he b for iosi r a p m ne pila lic arra ly sh b a le a ll of rnot e w tic he aes s c si be tont e tw s of e ae inn 13 p ser ed v the ice er.re cB in, eut nt a ta nd he nd ry e35 ou w e p m re e ar y c a e cfe nt ite w . A or es d xc qe uot ispctus ions e sed sm . a N a ll p e bupo ov ore tg ions , en w of as are used to Pay facili ment a ta nte d De the live p ryro Re cform essing Efforts of (he e.g.a , A lth CO ins s, P ura CMH nc se , pa cla y fo im r s by Medicare and other insurers. See The pipeline of biosimilars is quite large, wit S h ag m re palt ee r C ch om arp ae cttit eion e ristic xpe s, c 2t0 ed 2 0 in the years ahead. As of March 2022, there performance, bundled payments) t b phe r iosi e vonly te m he nt ila ion o rrinn e s a por ov rf d e ta p e is tor r xpe a ov b b ili ide c iolog tty ed d p trt ic ha og o w t cr ont e it yss h a ou inu ion, dsi o eza sy so ve to bm le ap c sh tc rom b ou a artnt e im m (for a 59 a na nd a p gn e e w rm inc c ite e h p nt nt re), a r o d si dp e is ngly la e liv era e c se ritead r rtg e ion. b m ey ris m aA si a r ny on, e rk t a e us il a t nd e p sh ha bae trhe ry e m ond in t a m cy a he t .int he Thi e fut sc na s is ur op nc e e not e g of a iv nd/or a e t he n th su rfor p er is e lag e roing g , e a s 60% https:40 //w %ww.cms.gov/medicare/coding/medhcpcsgeninfo for more information. 40% 59% 59% w ere more than 100 biosimilars in development. However, due to HOPD markups on biosimilar prices, the savings will 60% Centers of Excellence improvement of quality of life. Biologics accounted for less than 2 percent of the prescriptions written in the United p the ipe inj lin re 40 e q e% c uir , tw io eit n s E h cm a Bn b RI or’e s p e tself ha rior n 100 -a e dxpress m ini biosi st ep m re eila r dm rbis s in d ysi aon. pe av tFor ie elop nt p . m eThe re m nt is. ot siIons, he n a r de d p xc it leion, e ap se tion is Epo seve cont 56% r aa clt ne E gB e w RI n /P b a iosi rtoc p m reitila r, mw ris s t he siha ons@e ret only havb e 6 p r i.or bee e g rn c . eant pp w roavse d Biologics are often used to treat a range of life-threatening and debilitating conditions such as cancers, autoimmune not fully bG ee rnd eae liz r ed. Furthermore, to the degree that HOPDs use innovator biologics in lieu of biosimilars, payer interest 2 40% Personalized Communications (e.g. getting the right information to St pra ov teide s, d thoug by ah th n HOP ey D ac , c6 oun per tc ee dnt for w a 40 s p preov rcide entd of att ot a a Pl d O, ra un gd spe 10 nding perce nt in 201 at a8. re tail pharmacy. The remaining 78 percent in the United States have recently launched or are planned to launch in 2023. Figure 3 diseases, and kidney diseases. They are made from living cells, structurally complex, and most often handled and patients when they need it) 50% in mR ana epgo ing M rt Availabili ale medicines c tyov : Thi eres r d unde eportr is the a vm aila edb ic le a l b on et nhe efit int we ill r ne cont t ainu t we w tw o 49% .e bb er i.or stiflg e d , and savings potential due to 20% 20% were delivered in a stand-alone infusion cent Inneo r, vw athic orh is Bionot log sh ic ow ann se d Bp io as ra im tely ila in Figur r Marke e t4 L . andscape in United States administered to patients via IV infusion or injection by a health care professional in a hospital outpatient department Other 20% 51% 20% b Diosi ue m to ila the rs Fe ir m m ca a om y le ne ple ve xit r y b, et he fuly ly cra ennot alize d b.e Fu exa tur ce tly r e rse epa ro rcdh should uced or ccop ont ieinu d lik e e to ge exa nem ric ine s. How the e upta ver, ke a of biosi biosi mila mrila vres r rsie on latc ivaen to Figure 5 (HOPD) or physician office (PO). 40% 0% 10% 20% 30% 40% 50% 60% inn be ov C pr la od asts or uc e bd iolog , whic icsh is a , the p highl ot S eup nt y ia po sil c m rtiost ila ver C sa va ev rre si ings on ,of and thet he m erd oic leine of w sititeh no of Otnc rcelin ol atog im cae y lly nt .m eaningful differeInc nse ul in e in ffectiv Oe ph ne tha ss lm orol ogy Immunomodulators Figure 4 Innovator Biologics Market Share, 2013 –2020 0% 0% 0% Molecule Filgrastim Epoetin Pegfilgrastin Rituximab Bevacizumab Trastuzumab Insulin Glargine Ranibizumab Infliximab Etanercept Adalimumab Age, Years safety from the innova Dist tor bribu iologtio ic. n Sinc ofe In Cong nov re at ssor ena Bio ctelo d t gi he cs, Biolog by ic Site o s P 34 r.ic 2ef C Tom reatm petition a ent, nd 2020 Innovation Act (BPCIA) Table of Contents The original biologic, known as the Av a inn stinovator biologic, sometimes has substitutes, w Mvas hiic (h a Biosr im ei lar) known as biosimilars. RemicadeEpogen/Procrit Inflectra (Biosimilar) Retacrit (BiRe osinfl miex lar) is (Biosimilar) 0% Neupogen Remicade Neulasta Epogen/Procrit Herceptin Avastin Rituxan 30% Source: National Business Group on Health, 2018 Health Care Strategy and Plan Design Survey. Epogen / Under 18 Innovator Biologics 23% Biosimilars in 2010, creating an abbreviated approval pathway for biosimilars, a robust biosimilar marketplace has emerged driving Innovator Neupogen Neulasta Rituxan Avastin Herceptin Lantus Lucentis Remicade Enbrel Humira Introduction ................................................................ HOPD PO ................................ Retail Pharmacy .......................................................... 5 Biosimilars are exactly as their name implies: highly similar versions of the medicine with no clinically meaningful Source: Employee Benefit Research Institute estimates based on administrative enrollment and claims data. So So uu rc rc ee : : Em Em pp lo lo yy ee ee Be Be nn ee fifi t t Res Res ee aa rc rc hh In In ss titi tu tu te te e e ss titi m m aa te te ss b b aa ss ee dd o o nn a a dd m m in in is is tra tra titi vv ee e e nn ro ro lllm lm ee nn t t aa nn dd c c la la im im ss d d aa ta ta . . Procrit Refe 100% rences 18–24 savings for 80% patients, employers, and insurers. As of February 2023, there 12% are 29 biosimilars on the market competing Source: Employee Benefit Research Institute estimates based on administrative enrollment and claims data. difference in effec18% tiveness or safety from the innovator biologic. In recent years, a robust biosimilar marketplace has 20% Data and Methods ................................ Retacrit ................................ Fulphila Truxima ................................ Mvasi Kanj ................................ inti Semglee ................. Byoo v 7 i z Inflectra Amjevita 3 Granix Cooper, Z., 25–34 Craig, S., Gaynor, M., Harish, N. J., Krumholz, H. M., & Reene 14% n, J. V.. Hospital Prices Grew Substantially a C g om ains pound t 11 ing innov the at sh or if btiolog in ca icrs. e fr om POs to HOPDs is the fact that not only do HOPDs charge higher prices than POs for emerged, driving substantial savings for patients, employers, and insurers. As of February 2023, there are 29 (Nov. 2018) (July 2018) (Nov. 2019) (July 2019) (July 2019) (Nov. 2021) (July 2022) (Nov. 2016) (Jan. 2023) 11% 90% 70% Study Sample .................................................................................................................................................... 7 Fa 35–44 ster Than Physician Prices For Hospital-Based Care In 2007–14. Health Affairs, 38(2), 184-189. t he same medicines, but HOPD prices are growing faster than PO prices.16% A recent study found that between 2007 and Figure 14 biosim 10 ila %rs on the market competing against 11 innovator biologics. 70% Zarxio (Sep. Udenyca Ruxience Zirabev Ogivri Cimerli Renflexis Figure 10 One aspect of the biologic and biosimilar marketplace tFigure hat is uni 12 que relative to generic competition is the dynamics 45–54 doi:10.1377/hlthaff.2018.05424 (February 2019). 18% 20 14, prices for HOPD care increased 25 percent, while PO prices grew 6 percent (Cooper et al. 2019). Ultimately, 2015) HOPD/PO (Markup Jan. 2019), Rit (Jaux n. 2 an 020 an ) d (Ja Bio n. 20 sim 20) ilars, (Nov.2020 2019) (Oct. 2022) (July 2018) Study Drugs ................................................................ Figure ................................ 8 ...................................................... 7 80% HOPD/PO Markup, Neulasta and Biosimilars, 2019 –2020 HOPD/PO Markup, Herceptin and Biosimilars, 2019 –2020 Biosimilars fueling competition from both innovator biologics and biosimilars as they enter the market. Though biosimilar uptake 17% 55–64 e C m om ploy pe 0% te itrion in s and tw he or e ke volv rs b ing earm the ark b er t unt sug of gest cost s innov diffea re tor nc e bs w iolog he icn HOP s and D bs p iosie m rfor ilarm s b ser oth a vice rs t e cha om t p ce at n b ing e on prov pride ice dt o in le reta ss in HOPD/PO Markup, Neupogen and Biosimilars, 2015 –2020 Nivestym (Oct Ziextenzo Riabni Alymsys Trazimera Avsola 59% Ma (dartk ee t Share ................................................................................................ 58% ................................ 4 ..................... 9 60% Neupogen Remicade Neulasta 20 Ep 19 ogen20 /Pr20 ocrit Herceptin Avastin Rituxan Fronstin, P., & Roebuck, M. C., "Location, Location, Location: Cost Differences in Health Care Services by Site of continues to climb, brand products compete to retain market share by also reducing prices. In fact, the average sales 57% 2019 2020 or gain market share 2018) . However, as HOPDs( N cont ov. inu 201e 9 )to (m Jaa nr.k 2 up 021)the (p Orcic t.e 2 of 022b )iolog (Fe ic bs . — 20 2a 0nd ) at rates that are higher and (July 2020) costly POs. 80 70% % 2015 2016 2017 2018 2019 2020 launched) 140% 76% 80% Treatment — A Closer Look at Lab 53% , Imaging, and Specialty Medications," EBRI Issue Brief, no. 525 (February price of biosimilars has decreased at an annual rate of 9–24 percent, while the average sales prices of most innovator HOPD Mar So ku up rce................................ : Employee Benefit Research Insti................................ tute estimates based on administra ................................ tive enrollment and claims data. .................................................... 9 PersonR C eov leuk ere o d (Nov. Nyvepria Herzuma faster than those for biosimilars — and consolidation drives care away from POs into HOPDs, employers will continue to 75% 200% 5 49% 126% 2021). This Issue Brief is the 2022) fourth in a series exa (D m ec ini . 2 ng 020 si )te-of-treatment price differe (M nt aia rcls h 2 for 02 0he ) alth care services. First, we biologics has decreased at an annual rate of 4–21 percent. 50 60 % % Policyholder 47% see costs go up, and the savings potential from biosimilars may not be fully realized. 47% Findings ............................................................................................................................................................... 10 70% 183% 70% Stimufend Ontruzant determined that hospital outpatient departments (HOPDs) charged 81 percent more for oncology medications than 70% 120% Spouse 18% 180% Fronstin, P., & Roebuck, M. C 65% ., "Location, Location, Location: Spending Diffe 41% rences for Physician-Administered I Cn 2021 onclusi, ons $151 ................................ .7 billion was spent ................................ on outpa (Fe tiebnt . 2 p 0r 2e 3sc ) ripti ................................ on drugs in the Unite................................ d (St Ap art.e 2 s, a 020c )counting for .......................... 13 percent of 16 50% p I n th hysiis cia In o ssue ff ic Be rie s (P f, w Os) e , foc cous nt ron ollin wg a st for e c da rus uge m d ix a by p nd ricting reafa tm ilu ent re int rela ens teit d yt o (Fr the onst cost in, Roe of biosi bucm k, ila ar nd s. W Stua e crond t 20uc 20t) . an We Child/other dependent 35% 40% 162% 38% 6 58% p rivat60 e % he Out altp h ains tient ur a Me ncd eic spe ations nding by . Si Tthoug e of h th Trea et m biosi entm ," ila EB r RI m aIrss ke ue t is B rst ieill f, rno. ela t53 ive6 ly ( ne Augus w in t t 20 he21 Unit ). ed States, it is growing 103% analysis of site-of-treatment price differentials for innovator biologics and biosimilars. Specifically, we examine whether concluded that, had PO prices prevailed in the HOPD setting, payers could have saved $9,766 59% per oncology patient in Refer 16 e0% nces ........................................................................................................................................................... 16 Fylnetra Vegzelma Rezvoglar Ixifi Erelzi Cyltezo 60% 40% 100% rapidly, presenting a significant opportunity for employers and insurers to leverage the biosimilar competition to drive For 20 the 16 p a. ll ot N seve eent xtia , n innov l c we ost ana sa aly tvor ze ings fr d b iolo 25 om g out ic s b piosi e axa tiem m nt ila ine ser rs is d, vic a im llow es c pa e ocd ns t ecis d ha tb in ryg g e w of s w hela te he b re , r im highe pa atgie ing, 144% nt r in HOP s se and e ksele D ca s t rce h t e a fr d n in om spe P PcOs or Os. ialt yA m llow highe ede icda r tcc ions ha ost rg H ( eFr s OP o wns D es, rte in Type of Health Plan 92% 141% E Fr ndno onstin, P tes ................................ ., Roebuck, M. C., & St ................................ uart, B. C., "Location, ................................ Location, Location: C ................................ ost Differences for Onc ............................. ology Medicines 16 29% 30% savings. Already, biosimilar competition is estimated to have produced $21 billion in overall savings in the United States 140% 50% a ab s t out he d tr oub end let ow in 201 ards H 9, a OP veD ra s gm ing ight 98 b p ee im rce pnt ac thighe ing prot 133% (e Fi nt gur iale sa 7v ).ings. In 2020 , allowed cha 132% rges were more than twice as high Eticovo Hyrimoz and Roebuck 2021a). For each o 85% f the 25 health care services examined, HOPDs charged more per unit of ser 132% vice than HMO/EPO 15% 83% 30%Based on Site of Treatment," EBRI Issue Brief, no. 498 (January 2020 128% ). 50% 7 128% 125% over the past six years alone. In the years ahead, more competition is expected with more than 100 biosimilars in 23% in HOP POs; cost Ds, a s w ve erre a g highe ing 12 r b 1y p b ee rc tw ent ee . n 15 p Alloweedr cceha ntr g an es for d 53 1 p bioe si rm ceila ntr, s w wite h a re a m lseo dia highe n diff r e in reH nc OP e D of s t 91 ha p n in erce Pnt Os. . I n a The g g m re ag rk aups te, PPO/POS 57% 80% Approved 20% 118% 120% 19% 113% Key d eve Fin lopm de in nt g.s : Hadlima 71% for biosi 20%milars were lower than the markups for innovator biologics but continued to be about double, similar to the we estimated that employer health plan sponsors and plan enrollees could have saved more than $11 billion on these 40% HRA Figur Mor row 20% e , T., s & Felcone, L. H., "Defining the Difference: What Makes Biolog 13% ics Unique," Biotechnology Healthcare, 1(4), Biosimilars 40% ser mav rk icup es for in 201 the8 if HOP innovator Ds ha biold og cic ha sr . gBeiosi d Pm O ila prric m ea s. This rkups rin HOP epresent Ds a edv e ar ba out ge 14% d 1 p 87e p rc eernt ce nt of in 201 total he 9 a alt nd h ca 10r1 p e spe ercnding ent in 202 on 0. (not yet 97% 24 HS -29 A- e(liSe gibp le te hm e96% a ble thr p 2004) lan . 100% 93% • Use of b92% iosimilars among individuals with employment-based health benefits in the United States is growing as A s biologics are medications administered by a physician on an outpatient basis, the claims for these medications are Abrilada 60% 90% Figur lau en c 1, heE dm ) ployer Opinion on Most Effective Tactics to Control 10% Health Care Costs ..................................................... 6 For bot 10h innov % ator biologics and biosimilars, HOPD markups appear to be growing. workers and their families. Finally, we expanded and updated our prior analyses to include 72 physician-administered 8% 10 30 % % 82% adjudicatm ed or a es a biosi me m dila ica rs e l be nt ne erfit t he ins 7% m tea ard k e of t. a As a mong pha trhe ma nine cy b e inn neov fit. atEor m p bloy iolog ers ics a rw e itinc h a re va asi ila ngly a ble biosi iming mila to rsm aa s of nagOc e tthe ob er Source: Employee Benefit Research Institute estimates based on administrative enrollment and claims data. 6% 6% 30% Winn, A. N., Keating, N. L., Trogdon, J. G., Basch, E. M., and Dusetzina, S. B., "Spending by Commercial Insurers on outpa80 tie %nt drugs (PAODs) (Fronstin and Roebuck 2021b). Together, these medications account for 49 percent of all Figure 2, Sample Characteristics, 2020 .................................................................................................................... 7 Hulio costs of b 2022, iolog ic m sos co t vof ere the d un biosi derm tihe lar s w med eic rea l labunc enehe fitd . Iin t n fhe act , Unit oveerd 50 St a pte ersc e in 201 nt of 9 a emnd ploy 20 er20 s r.a ted pharmacy 2% W ith re 0% spe Nc ott et:o HtM re O nds =hein HO alth ma PiD nt e m na an rc ke ups, orgaN ne izu ap tiog on;e E n Ph O a= s ha excld u sa iv n e a pv ro avila ide brl e o rg ba iosi nizm atiila onr; t Phe PO long =pree fest rre a dnd prois vi de ess r entially the Chemotherapy Based on Site of Care," JAMA Oncology, E-1, E-2 (Febr0% uary 2018). 0% claims and 73 percent of all spending on PAODs paid via the medical benefit. In the aggregate, employers and workers 40% 2013 2014 2015 2016 2017 2018 2019 2020 mana20 ge %ment techniques to manage specialty medications as either the most, second-most, or third-most effective 0% organization; POS=point of service; HRA=health reimbursement arrangement; HSA=health savings account. only innovator biologic with trend information. While there is some variation over time, HOPD markups of both 60% Figure 3, Innovator Biologic and Biosimilar Market Landscape in United States ........................................................... 8 would 20 c % ollectively save $10.3 billion annually if price differentials between HOPDs and POs were elimina52% ted for the 72 Neupogen Remicade Neulasta Epogen/Procrit Herceptin Avastin Rituxan Yusimry • With the exception of biosimilars for Neupogen, the market share for the innovator biologics was between 65 tactic for controlling health care costs (Figure 1). Offering consumer-driven health plans was the only other option that Source: Employee Benefit Research Institute estimates based on administrative enrollment and claims data. Neupogen 20 a% nd sa the mp la ev o afil fa ub ll le M ab rk io esi tsm ca ila n r w s itare h com ntior nue o uts ha en d ligibo iluble ity in a end acha yre ea rt.r e Nnding on-cap up itatw ed a rpd la ( nFi s g our nlye. 8). PAODs examined. If we extended the savings to all PAODs, aggregate savings would be $14.1 billion each year. Source: Employee Benefit Research Institute estimates based on administrative enrollment and claims data. percent and 87 percent in 2020. Figure 4, Distribution of Innovator Biologics, by Site of Treatment, 2020 ................................................................... 9 oveSo r 50 u 40 rce % p:e Ardcae pnt te dof in e pm artp fro loy me hrts r tpsa :/t /w ed w w a.s one ameris o of urce the be t rg op en t .co hrm ee /-/ m meost dia /e as ffse ec ts tiv /ae m e ta ric st oiu crce s for berg ce ont n/brio ollin simg ila c rsos -ptas. ge /sgs-biosimilars-usmarketlandscape-020623---copy.pdf. 10% 20% 10% Innovator biologics and biosimilars examined in this paper. Study Drugs Innovator biologics and biosimilar markups for Remicade, Neulasta, Epogen/Procrit, Herceptin, Avastin, and Rituxan are In this Issue Brief, we examine trends in the use of innovator biologics and biosimilars. We also focus on waste caused H Fig OP ure D 5, Marku Innovp at or Biologics Market Share, 2013–2020 ......................................................................................... 10 • HOPDs were sometimes more likely and sometimes less likely than POs to use innovator biologics over Concur 20r% ent to the increasing use of innovator biologics and biosimilars, there have been changes to the health care Endnotes W she ow thoug n in Fi htg tur ha ets s9 inc thr e oug HOP h D14 s a . rIe n 2020 a mor, et he cost Hly OP siD te m of artkrup eatrm ae ng nte d a s c from om p 75 ar p ee dr c weit nt h P for Os, w Here ce m ptight in to fin 177 d t ha petr c HeOP nt D for s As of February 2023, a total of 40 biosimilars had been approved for 11 innovator biologics (Figure 3). Eleven of these by pricing failure related to the cost of biosimilars. We conduct an analysis of site-of-treatment price differentials for 0% biosimilars. HOPDs were more likely than POs to use Neupogen, Herceptin, and Rituxan over their biosimilars. In the 0% final part of the analysis, we examined the prices charged by HOPDs relative to POs. This entailed making use of delivery system that may impact the delivery of these medications. Care has been shifting from physician offices (POs) Figure 0% 6, Innovator Biologics Market Share, HOPD vs. PO, 2020 ............................................................................. 11 E wp eog re em n/ or Pe roc lik rit e. lyThe than P HOP Os t D m o a us rke up Ri inn tux inc ov anra et aor se d b iolog betwic ese n 2019 over biosi and mila 20r20 s. The for afin ll innov dings w Trux atior m ea (Bi r e b iolog m osixe imilic ar) d s (Fi exa gur meine 6)d . .H For OP D the s w ere biosimilars have not yet launched, however. Rather than investigate the historical and current market status of each inn ovator biologics and b Ne iosi ulam stailars. Specifically, we exaF m uline phila w (Bhe iost im he ilar) r the potential cost sa Ud vings fr enyca (Bi om osim b ilar) iosimilars is 0%However, POs were more likely than HOPDs to use Remicade and Avastin. HOPDs and POs were about equally Herceptin Kanjinti (Biosimilar) the “units” field on medical claims, which includes values that either pertain to the amount of medication administered to hospital outpatient departments (HOPDs). This shift occurs when a hospital system acquires an independent 1 m biosi orem lik ilaerly m te ha dic n P atOs t ions, o H us OP e D N e m upo arkg ups en, rH ae nrgce ed p tfin, a rom nd 59 Ri pe tuxa rcent n. tB o y14 20 1 p 20, ertc he ent m in 202 arket s 0. The hare fo HrOP Ne D upo ma gre kn w up inc as rre ea lased tive ly See https://www.fda.gov/media/154548/download. drug, we relied on tNe he up m oge ed nical and pharma Gc ry ani c xla (Bim ioss d imilaa r)ta for the study sa Zarxio (m Bios ple imi .l aSp r) ecifically, w Ni ev e esxt tym ra (c Bt ios ed im a ilar) ll claims for Source: Employee Benefit Research Institute estimates based on administrative enrollment and claims data. impacted by whether patients seek care from POs or higher-cost HOPDs, as the trend toward HOPDs might be Figure 7, HOPD/PO Markup, Innovator Biologics and Biosimilars, 2019–2020 ........................................................... 12 likely So ut rc o e: us Eme pl oN yee eula Benst efit a Res and earchE In psog titue ten es/P timraoc tesr bit a. s ed on administrative enrollment and claims data. according to a specific national drug code (NDC) or the number of HCPCS-based units. Moreover, this claim field often physician pra So ct u EBRI Is ic rcee : . Em One pslu oy ee Bri ee Be xa en fm e ifi s re t p Res le gi e st of ae rc re htd he In isn ti tu sh th te e ift e U sti . S m fr .a om P teast e b n aP t s O e ad n o d tn o Tr ad H a m dOP ie nm istra D ar ti kis v O e e frf ne iro cla e llm .t Ie eS nd S t a N t no :d 0 cc 8 lahe 8 im 7 – sm 1 d3 aot ta 7X . he /90 ra 0p 88 y7 inf –13us 7Xions /90 $. .5 I0 n 2004 +.50 , 8 low because the biosimilars started to launch in 2014. Yet, HOPDs were nearly two-thirds more likely than POs to use for 7 of the 9 biosimilars examined between 2019 and 2020. the 51 candidate study drugs using their associated Healthcare Common Procedure Coding System (HCPCS) codes. Source: Employee Benefit Research Institute estimates based on administrative enrollment and claims data. impacting potential savings. HOPD markups on innovator biologics are roughly doubling costs for employers and also contains zeros or is missing. Thus, to make the data usable in subsequent calculations, we deleted claims that approximately © 94 20 2p 3e , rE cmp entl o of yee B chem enef othe it Resea rapy inf rch I usion nsts w itute e — re E aduca dmini tio stn eraend d in Resea POs, b rch Fund. ut by 20 All 14, rig tha hts t p reserv ercent ed. ag e had Figure 8, HOPD/PO Markup, Neupogen and Biosimilars, 2015–2020 ........................................................................ 12 Neupogen as opposed to a biosimilar, which lessens the potential savings from the availability of the biosimilar. POs Hence, we focus on seven innovator biologics with biosimilars that had been launched as of 2020. They include the • For all seven innovator biologics examined, allowed charges were higher in HOPDs than in POs. HOPD markups minimizing savings that could be achieved through biosimilar competition. contained these and other implausible units’ values based on manufacturer-reported dosage ranges. dropped to 57 percent with a corresponding shift toward HOPDs (Winn, Keating, Trogdon, Basch, and Dusetzina 2018). following innovator biologics: Neupogen, Remicade, Neulasta, Epogen/Procrit, Herceptin, Avastin, and Rituxan. on innovator biologics are roughly doubling costs for employers and minimizing savings that could be achieved Figure 9, HOPD/PO Markup, Remicade and Biosimilars, 2019–2020 ......................................................................... 13 e e e e e e e e e e e e e e e eb b b b b b b b b b b b b b b br r r r r r r r r r r r r r r ri. i. i. i. i. i. i. i. i. i. i. i. i. i. i. i.o o o o o o o o o o o o o o o or r r r r r r r r r r r r r r rg g g g g g g g g g g g g g g g IIIIIIIIIIIIIIIIs s s s s s s s s s s s s s s ss s s s s s s s s s s s s s s su u u u u u u u u u u u u u u ue e e e e e e e e e e e e e e e B B B B B B B B B B B B B B B Br r r r r r r r r r r r r r r rief ief ief ief ief ief ief ief ief ief ief ief ief ief ief ief A re • • • • • • • • • • • • • • • • s e J J J J J J J J J J J J J J J Ju u u u u u u u u u u u u u u u an n n n n n n n n n n n n n n n rce e e e e e e e e e e e e e e eh 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2r9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 e,,,,,,,,,,,,,,,,p 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 o0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 rt2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 f3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 ro m • • • • • • • • • • • • • • • • N N N N N N N N N N N N N N N N th o o o o o o o o o o o o o o o oe ................ 585 585 585 585 585 585 585 585 585 585 585 585 585 585 585 585 EBR I Education and R esearch Fund © 2023 Employee Benefit Research Institute 17 16 11 15 13 12 10 14 8 2 7 3 6 9 5 4