Healthcare Providers Are Feeling the Burden of Rising Costs

Financial challenges remain the #1 concern of hospital executives, according to the 2018 American College of Healthcare Executives’ annual survey.1 Similarly, oncology practices face significant financial strain, which has resulted in over 1600 community oncology practice closures, hospital acquisitions, and corporate mergers in the past decade.2

One way to alleviate this burden is through utilizing opportunities to recognize cost savings. For example, hospitals may be able to leverage cost savings to reallocate funds for other important projects not funded by Medicare or commercial payers. In addition, this may lead to better management of hospital budgets to optimize care and a positive budget impact on drug spend for hospital inpatients.3

The Healthcare Industry Is Feeling the Effects of the Shift to Value-Based Care

In recent years, there has been a significant transition in focus from fee-for-service to value-based care. The goal of a value-based
care system is to encourage clinicians to provide quality and efficient care, as well as improved outcomes at a lower cost.4

There have been several actions in the marketplace to recognize this shift to value-based care. For example, the Centers for Medicare & Medicaid Services (CMS) has created value-based care programs that reward providers with incentives for lowering costs and improving the quality of care they provide to Medicare beneficiaries. An example of this type of market reform is the development of a voluntary pilot program called the Oncology Care Model (OCM), which is designed to test the effects of improved care coordination, greater access to practitioners, and appropriate clinical care on both health outcomes and the cost of care for patients receiving chemotherapy.5 Another type of market reform that was recently announced, the Patient-Centered Oncology Payment (PCOP) model, offers a way to expand on the OCM experience and represents an additional step toward innovation.6

This shift from fee-for-service to value-based care is playing a significant role in how practices and providers are viewing the cost of care.7

In light of these market trends


of community oncologists surveyed are thinking differently about drug choices as a result of value-based care.8

In order to manage appropriate utilization and take more risk, it will be crucial to assess the expense side of the equation as well.9

As the industry shifts to value-based reimbursement models, healthcare systems will continue to realize
the need for solutions that advance health initiatives and support quality care objectives in the future.10

Unlocking the Potential of Biosimilars

Given the growing costs of cancer care, delivering value while maintaining efficacy and safety is a pivotal issue in today’s healthcare environment. Biosimilars may help address this issue by providing additional treatment options, at a potentially lower cost, while providing highly similar safety and efficacy to their reference biologic.11-13 They may potentially better position providers for emerging value-based care initiatives from payers and employers through availability of lower-cost treatment options resulting in reduced drug spend. In addition, biosimilars may help meet established cost targets and position for future risk-sharing for OCM practices.13-14

Volume-based care

(Population Health management)

Biosimilars May Prove Fundamental to the Future of Oncology Care
as We Shift to Value-Based Care as a Solution to Contain Costs15-17

  • By potentially reducing costs and helping decrease financial risk in an emerging value-based environment, biosimilars may be able to unlock resources that can be reinvested in improving patient care
  • Biosimilars offer additional treatment options at potentially lower costs, which could create savings and efficiencies for the healthcare system
  • Demonstrating the ability to lower costs for high-volume, costly therapies may prove beneficial with practice discussions with payers

Introduction to Biosimilars

  • A biosimilar is a biologic medicine that is highly similar to a reference biologic, with no clinically meaningful differences in terms of safety, purity, and potency18
  • As potential alternatives to reference biologics, biosimilars may potentially expand treatment options and lower costs to meet the growing demand for biologic therapies

Development and Approval of Biosimilars

Extensive analytical, clinical, and nonclinical studies are part of biosimilar development.18

The FDA approval process evaluates the totality of evidence to help ensure biosimilar quality, efficacy, and safety.18

  • A comparative clinical study is typically required to confirm no clinically meaningful differences between the 2 products
  • Comparative human pharmacokinetic/pharmacodynamic (PK/PD) studies and clinical immunogenicity assessment are expected
  • Nonclinical testing to evaluate the toxicity and safety profiles of the biosimilar is required
  • Robust analytical testing, including comparative structural and functional characterization, is performed


1. American College of Healthcare Executives. Top issues confronting hospitals in 2018. Accessed November 1, 2019. 2. Chartis Oncology Solutions. Optimizing your oncology practice: real-world approaches that produce results. Published May 14, 2019. Accessed November 1, 2019. 3. Data on file. Pfizer Inc., New York, NY. 4. Bean M. Two-sided risk is coming – here’s how healthcare providers can prepare. Published October 2, 2017. Accessed November 1, 2019. 5. Centers for Medicare & Medicaid Services. OCM performance-based payment methodology. Published December 17, 2018. Accessed December 1, 2019. 6. ASCO. ASCO launches new payment reform model to transform cancer care delivery and enhance the quality of patient care. Published November 26, 2019. Accessed December 5, 2019. 7. The Deloitte Center for Health Solutions. The great consolidation: the potential for rapid consolidation of health systems. Published 2014. Accessed November 1, 2019. 8. IntegraConnect. How is value-based care changing cancer treatment decisions? Accessed December 1, 2019. 9. HealthLeaders. Value-based care is ripping into health system profits. Accessed December 2, 2019. 10. Walker T. The future of value-based care. Managed Healthcare Executive. Published November 1, 2019. Accessed December 5, 2019. 11. Centers for Disease Control and Prevention. Understanding value-based insurance design. Accessed July 15, 2019. 12. NEJM Catalyst. New Marketplace Survey. Transitioning payment models: fee-for-service to value-based care. Accessed December 3, 2019. 13. Community Oncology Alliance. COA biosimilars position statement. Accessed on December 3, 2019. 14. Patel KB, Arantes LH Jr, Tang WY, et al. The role of biosimilars in value-based oncology care. Cancer Manag Res. 2018;10:4591-4602. 15. Strober BE, Armour K, Romiti R, et al. Biopharmaceuticals and biosimilars in psoriasis: what the dermatologist needs to know. J Am Acad Dermatol. 2012;66(2):317-322. 16. Scheinberg MA, Kay J. The advent of biosimilar therapies in rheumatology—“O brave new world.” Nat Rev Rheumatol. 2012;8(7):430-436. 17. Henry D, Taylor C. Pharmacoeconomics of cancer therapies: considerations with the introduction of biosimilars. Semin Oncol. 2014;41(suppl 3):S13-S20. 18. US Food and Drug Administration (FDA). Guidance for Industry: Scientific Considerations in Demonstrating Biosimilarity to a Reference Product. Silver Spring, MD: FDA; April 2015.

Transitioning to value-based care? Learn How Biosimilars may help

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