Researchers evaluating the cost benefits of biosimilars for the treatment of patients with rheumatoid arthritis (RA) have reported confounding results when comparing the total yearly drug costs and out-of-pocket patient costs for those receiving infliximab (Remicade; Janssen) versus its biosimilar, infliximab-dyyb (Inflectra; Celltrion). When examining cost estimates under Medicare Part D prescription drug coverage, the investigators found that the yearly annual prescription cost of the biosimilar drug was 18% less ($14,202 vs $17,335) than that of the brand name biologic. However, after applying Medicare Part D’s coverage formula, the out-of-pocket cost for the brand-name drug was substantially lower than its US Food and Drug Administration–approved biosimilar (Yazdany J, et al. JAMA. 2018;320:931-933).
“For the more than 43 million beneficiaries with Medicare Part D drug benefits, it is unclear whether biosimilars lower out-of-pocket costs given Part D’s complex cost-sharing structure….Currently, beneficiaries receive a 50% manufacturer discount during the gap for brand-name drugs and biologics, but not for biosimilars,” the researchers wrote.
Jinoos Yazdany, MD, MPH, Associate Professor of Medicine, Division of Rheumatology, University of California San Francisco, and colleagues used June 2017 Medicare Prescription Drug Plan Formulary, Pharmacy Network, and Pricing Information files to calculate mean total and out-of-pocket costs and found that the projected yearly out-of-pocket cost for infliximab under Medicare Part D was $3432 versus $5118 for infliximab-dyyb.
The reason why, as Dr Yazdany and colleagues predicted, came down to the benefit coverage extended during Medicare Part D’s Coverage Gap phase, which provides a 50% manufacturer discount to brand-name drugs. This is opposed to coverage of biosimiliars, where the plan pays 49% of the cost and the patient pays 51% during the Coverage Gap phase when nationwide average benefit levels are applied. This meant that patients’ out-of-pocket cost for infliximab-dyyb was $3642 during the Coverage Gap phase versus $1600 for brand-name infliximab.
In terms of study limitations, Yazdany and colleagues acknowledged that mean costs were calculated as unweighted costs by plan enrollment, and annual out-of-pocket costs were projected with the assumption that patients were using only 1 biologic or biosimilar and no other prescriptions. They also noted that Congress’ recent Bipartisan Budget Act of 2018 requires that gap discounts be applied to biosimilars beginning in 2019, which has the potential to drastically change the economic impact of biosimilars within the market.
This study estimated costs for the benefit year 2017, and will also apply to Medicare Part D benefits paid out in 2018, Dr Yazdany confirmed to Value-Based Care in Rheumatology via e-mail. He noted that he and his colleagues were “surprised to see the meager cost savings for the first RA biosimilar in the United States,” adding that an 18% cost reduction was below analysts’ estimates and was significantly less than the cost-savings for the biosimilar in Europe.
“The situation is the same in 2018, with paradoxically higher patient out-of-pocket costs for biosimilars. Realizing the flaw in the 2017 and 2018 coverage structure for biosimilars that left patients paying more out of pocket, Congress has made revisions that begin in 2019 so patients’ out-of-pocket costs will remain high but not be higher for biosimilars. While this is a step in the right direction, additional policies are needed if we hope to realize the potential cost savings for biosimilars and ensure patients can afford these drugs,” he said.
Dr Yazdany said he and his group will continue to monitor Medicare-related policies on biosimilars and cost trends as new biosimilars are approved within the US market.