'Biosimilar' drugs are gaining market share, Tufts researchers find
Competition does lower the cost of the expensive, hard-to-make drugs, according to Tufts University researchers.
The market for the new, expensive biologic drugs created by living drugs may be normal. A team of researchers led by Molly Beinfeld, a public health researcher at Tufts Medical Center, has published evidence for that possibility in a new paper on what happens when “biosimilar,” or competitors to biologics, show up.
Economists sometimes argue that the health care market is so different from other markets that price transparency or adding competition might backfire and increase the cost of care.
Beinfeld ‘s team found no evidence that increased competition from biosimilars pushed up drug spending.
Employer plays, insurers and other payers tend to take a few years to begin covering biosimilars, but, once the commercial payers add biosimilars to their “formularies,” or covered drug lists, use of biosimilars takes off.
After a biosimilar was on the market for an average of three years, it attracted about as much of the market as the original innovative drug, and, after an average of four years, it pushed the price of the original, innovative drug down by 91%, the researchers found.
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Team members based their results on an analysis of Tufts Medical Center data on seven innovative biologics and 20 biosimilars along with commercial payer claims data from IQVIA and the drug sales price data from the Centers for Medicare and Medicaid Services.
The paper appeared in Health Affairs, an academic journal that focuses on health care delivery and health care finance arrangements.
“Taken together, these findings provide evidence of a functioning, competitive market,” the researchers concluded.