Projected 2023 cost reduction from TNF-alpha inhibitor biosimilars in dermatology: a national Medicare analysis

doi:10.21203/rs.3.rs-2631468/v1

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Projected 2023 cost reduction from TNF-alpha inhibitor biosimilars in dermatology: a national Medicare analysis

https://doi.org/10.21203/rs.3.rs-2631468/v1

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The introduction of biosimilars for adalimumab and etanercept may yield a reduction in healthcare costs associated with biologics. With the influx of biosimilars into dermatology, it is important to recognize how utilization among dermatologists may impact costs. In this study, we referenced recent pricing and utilization trends for existing biosimilars and prescribing patterns for branded adalimumab (Humira) and etanercept (Enbrel) to estimate how utilization of biosimilars in dermatology may reduce healthcare costs. The findings suggest that these biosimilars could reduce Medicare Part D spending on biologics by $57–131 million in 2023, depending on utilization and pricing.

Biologics

Biosimilars

Trends

Cost

Medicare

Although biologics offer substantial therapeutic benefits, they are among the most expensive medications. From 2012 to 2018, Medicare and Medicaid spending of biologics for dermatologic conditions increased by 320% and cost $10.6 billion in 2018.¹ The Federal Drug Administration (FDA) approved biosimilars for adalimumab and etanercept, which could significantly reduce healthcare spending in 2023. To better appreciate the impact of these biosimilars and understand how utilization rates among dermatologists will alter costs, we conducted a national cross-sectional review of Medicare data.

To model 2023 utilization and cost reduction from biosimilars, we analyzed Medicare Part D data from 2020 on existing biosimilars, including granulocyte colony-stimulating factors, erythropoiesis-stimulating agents, and TNF-alpha inhibitors.³ For each class, we calculated the 2020 distribution of biosimilar and originator drug claims as well as biosimilar cost reduction per 30-day claim. We utilized 2018–2020 annual growth rates for branded adalimumab and etanercept to estimate 2023 30-day claims and the cost of these branded agents in the absence of biosimilars. The hypothetical 2023 cost reduction from adalimumab and etanercept biosimilars was estimated by assuming 2020 biosimilar utilization rates and mean cost reduction per claim.

In 2020, biosimilar utilization proportions ranged from 6.4% (TNF-alpha Inhibitors) to 82.7% (granulocyte colony-stimulating factors), with a mean across all classes of 35.7%. On average, the cost per 30-day claim of biosimilars was 66.8% of originator agents (Table 1). In 2020, we identified 57,436 30-day claims for branded adalimumab and etanercept submitted by dermatologists, with claims totaling $391 million. From 2018 to 2020, 30-day branded adalimumab claims increased by 0.07% annually (cost + 10.03% annually), while claims for branded etanercept decreased by 13.3% annually (cost + 5.6% annually). Assuming these trends, the cost of branded adalimumab and etanercept was estimated at $483 million in 2023. Applying the aforementioned 35.7% utilization, the introduction of biosimilars in dermatology would yield approximately $57 million (11.9%) cost reduction. A high utilization rate (82.7%) of biosimilars among dermatologists would increase cost savings to $131 million (27.2%) (Table 2).

Table 1

Medicare Part D 30-day claims, associated costs, and utilization proportions for existing biosimilars and originator drugs, 2020.
Biosimilar or Originator Drug	Medicare Part D 30-Day Claims (Proportion of Total Class)	Cost per 30-Day Claim, $ (Proportion of Originator)	Total Annual Cost, $ (Proportion of Total Class)
Granulocyte Colony-Stimulating Factors
Biosimilars (Ziextenzo, Nivestym, Granix, Zarxio)	13,030 (82.7)	2,037 (78.9)	26,538,777 (21.0)
Originator (Neupogen)	2,723 (17.3)	2,580	7,024,891 (79.0)
TNF-alpha Inhibitors
Biosimilars (Inflectra, Renflexis)	618 (6.4)	3,249 (58.9)	2,007,371 (3.8)
Originator (Remicade)	9,106 (93.6)	5,512	50,191,011 (96.1)
Granulocyte Colony-Stimulating Factors (PEGylated)
Biosimilars (Fulphila, Udenyca)	854 (12.1)	4,803 (65.3)	4,098,866 (8.2)
Originator (Neulasta Onpro/Neulasta)	6,218 (87.9)	7,351	45,710,100 (91.8)
Erythropoiesis-Stimulating Agents
Biosimilars (Retacrit, Aranesp)	39,943 (33.0)	1,136 (84.1)	45,361,697 (29.6)
Originator (Epogen/Procrit)	79,924 (66.0)	1,350	107,897.400 (70.4)
All Classes
Biosimilars	54,445 (35.7)	11,225 (66.8)	78,006,711 (27.0)
Originators	97,971 (64.3)	16,793	210,823,402 (72.9)

Table 1: Total drug cost is a sum of ingredient cost, dispensing fee, sales tax, and vaccine administration fees and is covered by the patient, Part D plan, or the government. The cost per 30-day claim was estimated by dividing the total annual cost by the total annual 30-day claims.

Table 2

Projected 2023 Medicare Part D cost reduction from TNF-alpha inhibitor biosimilars assuming 2018–2020 utilization and cost trends.
	Adalimumab	Etanercept	Total
2020 Part D 30-Day Claims	46,944	10,492	57,436
2018–2020 30-Day Claim Growth Rate, %	+ 0.07	-13.3	-
2023 Projected Part D 30-Day Claims	47,037	6,835	53,872
2018–2020 30-Day Claim Cost Growth Rate, %	+ 10.03	+ 5.63	-
2023 Projected Cost–No Biosimilars, $	428,805,313	54,007,081	482,812,394
2023 Projected Cost–Base Case Biosimilar Use, $	377,981,593	47,605,946	425,587,539
2023 Cost Reduction–Base Case, $ (%)	50.823.720 (11.9%)	6,401,135 (11.9%)	57.224.855 (11.9%)
2023 Projected Cost–High Biosimilar Use, $	312,134,677	39,312,672	351,447,350
2023 Cost Reduction–High Use, $ (%)	116,670,636 (27.2%)	14,694,408 (27.2%)	131,365,044 (27.2%)

Table 2: 2020 Medicare Part D 30-day claims include those submitted by dermatologists. The 2020 30-day claims and cost, and 2018–2020 growth rates were used to estimate claims and cost in 2023. Projected 2023 cost (base case biosimilar use) is estimated by modeling biosimilar utilization as 35.7% of total class utilization and 30-day claim cost as 66.8% of the originator drug. Projected 2023 cost (high biosimilar use) estimated by modeling biosimilar utilization as 82.7% of total class utilization and 30-day claim cost as 66.8% of the originator

High utilization of biosimilars among dermatologists may significantly reduce overall Medicare expenditures and improve patient costs. Utilization rates of biosimilars vary considerably, and it is important to understand the factors that influence these rates. The high utilization of filgrastim biosimilars (82.7%) may be due to their longevity. The limited uptake of biosimilars such as infliximab may be due to concerns regarding long-term safety and increased adverse events.^4,5 However, research has not substantiated these concerns, and increasing education on biosimilars' safety and approval processes may alleviate concerns and encourage adaptation.

This study is primarily limited by the sole assessment of Medicare data and estimates derived from existing (separate) biologic classes. It also does not account for potential expenditure shifts toward newer biologic agents (e.g., IL-12/17/23 inhibitors). Nevertheless, it indicates significant financial savings from new biosimilar agents in dermatology, which, along with their compelling efficacy and safety profiles, should bring substantial benefits to patients and the healthcare system.

Patient Consent Forms: Not applicable

Funding Sources: None

Conflicts of Interest:

Hao Feng: Consultant, Cytrellis Biosystems, Inc; Consultant, Soliton, Inc
Other authors: no relevant conflicts to declare

IRB Approval Status: This study utilized publicly-available or aggregate summary data (not attributable to specific patients) and did not qualify as human subject research; therefore, institutional review board approval was not required at the University of Connecticut Health Center.

Price, K.N., Atluri, S., Hsiao, J.L., & Shi, V.Y. (2020). Medicare and medicaid spending trends for immunomodulators prescribed for dermatologic conditions. Journal of Dermatological Treatment, 33, 575 - 579.
U.S. Department of Health and Human Services. Medicare Part D and Beneficiaries Could Realize Significant Spending Reductions With Increased Biosimilar Use. Accessed January 10, 2023. https://oig.hhs.gov/oei/reports/OEI-05-20-00480.pdf
Centers for Medicare and Medicaid Services. Medicare Part D Prescribers - by Provider and Drug. Accessed January 22, 2023. https://data.cms.gov/provider-summary-by-type-of-service/medicare-part-d-prescribers/medicare-part-d-prescribers-by-provider-and-drug/data
Lebwohl M. Biosimilars in Dermatology. JAMA Dermatology. 2021;157(6):641-642. doi:10.1001/jamadermatol.2021.0219
García-Beloso N, Altabás-González I, Samartín-Ucha M, et al. Switching between reference adalimumab and biosimilars in chronic immune-mediated inflammatory diseases: A systematic literature review. Br J Clin Pharmacol. Feb 2022;88(4):1529-1550. doi:10.1111/bcp.15101

No competing interests reported.

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Projected 2023 cost reduction from TNF-alpha inhibitor biosimilars in dermatology: a national Medicare analysis

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