Out of Pocket Costs for Biosimilars - No Savings So Far Save

JAMA has published an analysis showing that under Medicare Part D, RA biosimilar infliximab-dyyb was only moderately less expensive (18% less) than the biologic infliximab and, owing to differences in gap discounts, the out of pocket costs for the biosimilar was nearly $1700 more than infliximab in 2017.

Biologic specialty drugs represent approximately 2% of prescriptions but accounted for 38% of US drug spending in 2015 and 70% of drug spending growth between 2010 and 2015. Biosimilars were introduced to yield substantial savings, but the promise of cost savings with the biosimilars has not yet been realized.

Medicare's Part D program consists of a deductible, coverage phase, coverage gap, and catastrophic coverage.  When beneficiaries’ total drug costs exceed a set threshold, they enter the coverage gap and cost-sharing increases.

Currently, Medicare beneficiaries receive a 50% manufacturer discount during the gap for biologics, but not for biosimilars. Although the recent Bipartisan Budget Act requires gap discounts for biosimilars starting in 2019, patients’ out-of-pocket costs will continue to depend on whether biosimilars differ from biologics in drug pricing and plan cost-sharing requirements.

Researchers studied the coverage and cost-sharing for the first RA biosimilar "Infectra" (infliximab-dyyb) released in 2016 and compared this to its biologic (infliximab) under a standard 2017 Part D benefit. This includes a $400 deductible, coverage phase (out-of-pocket costs based on calculated national means), coverage gap starting at $3700 in total drug costs, and catastrophic coverage once out-of-pocket costs exceed $4950 (beneficiaries pay 5% for biologics or biosimilars thereafter).

During the gap, beneficiaries pay 40% for biologics (plans pay 10%, manufacturer discounts 50%) and 51% for biosimilars (plans pay 49%).

In the over 2500 plans studied only 10% covered infliximab-dyyb compared with 96% for infliximab (96%).

Eight weeks of Infliximab-dyyb therapy was modestly lower in cost compared to the originator drug ($2185 vs $2667) and the same was true for annual costs ($14 202 vs $17 335).

While coinsurance cost-sharing for infliximab-dyyb were similar to infliximab (26.6% vs 28.4% of drug cost), discounts for the originator resulted in higher annual out-of-pocket costs for the biosimilar ($5118 vs $3432).

New legislatoin in 2019, may alleviate this discrepancy some, the current low level discounts and high price appears to negate or limit the affordability of biosimilar specialty drugs.