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Biosimilars Projected to Yield $54 Billion in Savings

A primary projected advantage to biosimilar drugs development has been cost savings. A new study from the RAND Corporation suggests biosimilars could cut health care spending in the United States by $54 billion over the next decade. This number is nearly 20 percent greater than a similar study conducted three years ago by the same researchers. (Citation Source: https://buff.ly/2yLfgd8)

Biologics are pivotal in the treatment of many conditions, including rheumatoid arthritis, psoriatic and inflammatory bowel diseases. While 1 percent to 2 percent of the population is treated with a biologic each year, these drugs accounted for 38 percent of prescription drug spending in 2015. In addition, biologics accounted for 70 percent of the growth in prescription drug spending in the U.S. between 2010 and 2015.

Although there are 4 anti-TNF biosimilars that are FDA approved and each is proven to be equivalent to the approved "reference" biologics in terms of potency, safety and efficacy, the growth and utilization of these agents since 2016 has been slow.

RAND researchers developed their estimate of savings from biosimilars by examining other studies that have examined the issue, reviewing the sales history of more than 100 biologic drugs and examining the brief experience of the one biosimilar drug that has been marketed in the U.S.

RAND researchers estimate that that biosimilars will cut spending on biologics by about 3 percent over the next decade. The range of the new savings estimate given reasonable ranges of key assumptions -- like the price of biosimilars versus reference biologics and biosimilar market share -- varied from $24 billion to $150 billion from 2018 through 2027.

Overall it is thought that the introduction of biosimilars into the U.S. marketplace is expected to increase competition and drive down prices, resulting in savings for patients, health care payers and taxpayers. Lower costs also could improve access to biologic drugs, which may lead to overall greater spending; unless these treatments lower hospitalizations or other costs of care.

 

Disclosures: 
The author has received research/grant financial support on this subject
The author has received compensation as an advisor or consultant on this subject

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