Growing the biosimilar market could lead to significant healthcare cost savings, according to a new report, with the opportunity for billions in cost reductions.
An analysis (PDF) from the Pacific Research Institute, a free market think tank, shows today the limited biosimilar market share saved about $253.8 million per year in spending.
If biosimilars gained a 25% market share, those savings would increase to $2.5 billion, they said. If the market share increased further, the savings could be substantial—a 50% share could save $4.8 billion in healthcare spending; a 75% share could save $7.2 billion.
Wayne Winegarden, director of the institute’s Center for Medical Economics and Research and the report’s author, told FierceHealthcare that if there’s room to develop a strong generic drug market, the same can be said for biosimilar products.
“That is probably one of the most exciting ways that we’re not talking about to control drug costs,” Winegarden said.
Over a decade, a 25% market share for biosimilars could save $24.7 billion in healthcare spending, according to the report. The number increases to $48 billion in a decade for a 50% market share and $71.7 billion for a 75% market share.
Growing the number of biosimilars available on the market was a key goal of the Food and Drug Administration under former Commissioner Scott Gottlieb, M.D., who left his post at the agency in March.
Winegarden said that one of the key policy solutions to boost access to biosimilars is to make interchangeability guidelines as clear as possible and ensure prescribers have access to them when they’re selecting drugs for patients.
It’s crucial to be careful in making these determinations, as a biosimilar may not be a one-to-one swap for an existing drug, but guidance shouldn’t make it substantially harder for providers or pharmacists to offer these products.
Winegarden’s report notes that these data are pulled only from the nine drug classes where biosimilars currently exist—if they were introduced in further drug classes, the savings would compound.
He said Europe is an example of what a robust biosimilar market could look like. In a number of cases overseas, a biosimilar product is the dominant one in a particular class.
Making that happen stateside would require incentivizing researchers to develop new products to challenge existing biosimilars and brand-name drugs.
“That would be an amazing market development if we could make that happen,” Winegarden said.