Biosimilar adoption and provider performance in Medicare value-based payment models

To quantify the impact of biosimilar adoption on oncology provider financial risk under the Oncology Care Model (OCM) using real-world data.

Retrospective study of Medicare fee-for-service beneficiaries potentially eligible for an OCM episode of care initiating between January 2019 and June 2021.

Cancer treatment episodes were identified from the Medicare 5% Limited Data Set (LDS). The study sample consisted of episodes with use of any of the following agents or their biosimilars: bevacizumab, rituximab, trastuzumab, epoetin alfa, filgrastim, and pegfilgrastim. Financial risk was defined as the difference in observed total cost of care vs OCM benchmark episode cost. The primary outcome was the difference in financial risk (expressed in nominal US$) under observed use of reference agents and/or biosimilars vs hypothetical use of 100% reference product.

The sample included 8851 episodes. Biosimilar adoption resulted in a mean cost reduction of $1023 per 6-month episode vs hypothetical 100% use of reference agents. Biosimilar use increased markedly over the study horizon-with use in 65% of episodes initiating in half 1 (H1) of 2021. The mean cost of care reduction in episodes initiating in H1 2021 ($2060; 4.1% of mean episode benchmark price) improved nearly 10-fold vs H1 2019 ($201; 0.4% of mean episode benchmark price).

Rapid adoption of biosimilars for Medicare beneficiaries included in the LDS led to substantial cost savings for cancer episodes evaluated under the OCM methods-suggesting that adoption of biosimilars is a key strategy that providers should consider to manage financial risk in value-based payment models.