Biosimilar Drugs Often Translate to Lower Provider Profits, Says Navigant Analysis

One of the main culprits is the "buy-and-bill" reimbursement model for infused therapies, according to Healthcare Finance

Biosimilar drugs have the potential to reduce the cost of treatment with expensive biologic medications, but to date that hasn't promised savings for most providers. One of the main culprits, according to a new Navigant analysis, is the "buy-and-bill" reimbursement model for infused therapies. 

While the Centers for Medicare and Medicaid Services incentivizes the use of biosimilars through differential reimbursement, private payers generally don't, so adopting low-cost biosimilars typically leads to a reduction in profits for most providers. 

This is illustrated using a hypothetical scenario: In an infused innovator product costs $1,000 per unit dose, and a corresponding biosimilar is priced at a 15 percent discount, adopting that biosimilar could lead the average physician office to lose $9 in gross profit per dose, per Navigant's calculations. Outpatient hospitals could lose $43 per dose and 340B or disproportionate share hospitals could lose as much as $79 per dose. 

 

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