Frequently Asked Questions
In 2020. The US healthcare industry spent nearly $350 billion dollars on prescription medicines. In 2029, approximately 43% of all US medication costs was spent on biologic drugs alone. In terms of developmental costs, a biologic reference product can cost over $800 million currently in the US, whereas a biosimilar product can range from $75-$250 million dollars in developmental costs.
After marketing approval and launch, the reimbursement for biosimilars is the next largest barrier to overcome in the adoption and use of a biosimilar. Medicare, Medicaid and commercial payers have all approached biosimilar reimbursement differently. For example, the revenue landscape is dynamically changing and laden with new and greatly varying reimbursement models, margin declines and cuts from payer and governmental agencies, which may result in a yield of lower net revenue relative to the reference product. This may have an multi-million dollar net revenue impact for some agents.
Pharmacists and administrators must take several key factors in how to approach the reimbursement and therefore cost savings/net revenue determinations for an approved biosimilar to be used. Since payers will vary from patient to patient, key factors will include product utilization by site-of-care, wholesale acquisition cost, average selling price, reference product costs vs. biosimilar costs, rebates, 340b status, rebates, payer mix (federal and commercial) status, etc.