The three-fer: How biosimilars reduce cost, expand access, and improve margin

Traditional Medicare Fee for Service (FFS) covers both reference biologics and biosimilars without requiring prior authorization. Biosimilars offer a safe and effective alternative to reference biologics at a lower cost.

This study aimed to reduce Medicare FFS patient use of reference biologics in oncology and oncology-supportive care by 50%, lower Mayo Clinic Community Accountable Care Organization (MCC ACO) spending, achieve institutional cost savings, and improve revenue by increasing biosimilar use.

Using the quality improvement (QI) framework, we expanded upon Mayo Clinic's biosimilar-first strategy through the use of targeted electronic health record (EHR) reports to identify Medicare patients using reference biologics when biosimilars were available. We requested pharmacists or physicians to convert these patients to less costly, formulary-preferred biosimilars.

We developed custom EHR reports to pinpoint Medicare patients still on reference biologics despite biosimilar availability and leveraged cost and margin data to promote change. Providers and pharmacists received targeted outreach and education, and pharmacists facilitated transitions to lower-cost biosimilars.

EHR reports tracked Medicare patients treated with reference biologics (trastuzumab, rituximab, bevacizumab, pegfilgrastim prefilled syringe, filgrastim) and their biosimilars during baseline and postintervention periods using the QI framework. MCC ACO spend impacts were analyzed using EHR data for Medicare beneficiaries treated at a MCC ACO location. Medication margin impact was extrapolated from internal data using the average sales price minus the contracted acquisition cost for each medication.

Reference biologic use among Medicare patients dropped 47%. MCC ACO spending decreased by $2.62 million, patient count rose by 4.3%, and per-utilizer-per-month spending fell by 13.9% from fiscal year 2022-2023. Medication margin improved by more than $2.2 million for a modeled patient volume of 1000 per drug category.

QI efforts largely reduced reference biologic use in Medicare patients, lowered spending, increased patient access, and improved margins by shifting to biosimilars.