Biologics and Medical Specialty Drugs Can Create Substantial Cost for Patients
A 2019 payer survey of US health plans representing 105 million lives shows that 50% of commercial payers require a coinsurance for specialty drugs covered under medical benefit that can be as high as one-quarter of the drug cost. The annual costs for biologic therapy for Medicare patients too may be substantial.
High cost-sharing requirements may impact medication adherence. With increased out-of-pocket costs, patients are less likely to initiate therapy and more likely to discontinue existing therapy.
Biosimilars in oncology may help to reduce costs for the over 300,000 oncology patients treated with therapies with biosimilar alternatives.
Healthcare Providers Are Feeling the Pressure and Burden of Rising Costs
Total spending on US cancer care is projected to rise 34% from 2015-2030 and financial management remains the #1 concern of hospital CEOs surveyed. Over 1600 community oncology clinics and/or practices have either closed, been acquired by hospitals, undergone corporate mergers, or reported that they are struggling financially in the past decade.
“The transition [to
Increasing numbers of healthcare providers are now working in accountable care organizations
(ACOs) and “narrow networks.” This shift from fee-for-service to
Importance of Cost Savings Increases as Providers Assume More Risk
Biosimilars Have the Potential to Be a Lower-cost Treatment Option
EXAMPLE CONSIDERATIONS
Volume-based Care
(FEE-FOR-SERVICE)
Net Cost Recovery
Lower Acquisition Cost
Patient Point-of-service Focus
NO/LOW PROVIDER RISK
87%
OF COMMUNITY ONCOLOGISTS SURVEYED ARE THINKING DIFFERENTLY ABOUT DRUG CHOICES IN LIGHT OF
Value-based Care
(POPULATION HEALTH MANAGEMENT)
Improved Quality
Lower Total Cost of Care
SHARED/FULL RISK
Case Study
The Oncology Care Model (OCM) originated from the 2-sided risk payment model and will potentially disrupt the market. Goal is to provide higher quality, more highly coordinated oncology care at the same or lower cost to Medicare.
Biosimilars May Help Bridge the Transition From Volume-based to Value-based Care
POTENTIAL COST SAVINGS WITH BIOSIMILARS
Potential Financial Flexibility
Reduced drug spend on biologics may lead
to the potential for cost saving
Savings may provide reallocation of funds for other important projects not funded by Medicare or commercial payers
Increases cost efficiency through improved access
Potential to Reduce Provider Risk in an Emerging Value-based Care Environment
Better positions providers for emerging value-based care initiatives from payers and employers
Helps meet cost targets and position for future risk-sharing for OCM practice
Reduces the cost of biologics and may provide improved access through a lower drug cost
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