When it comes to biosimilars, physician offices are cheaper than hospital settings

A report from the Employee Benefit Research Institute found that physician offices offer better pricing for biosimilar treatments compared to hospital outpatient departments.

The higher hospital mark-ups on biologic medicines are roughly doubling the costs for employers and minimizing savings that could be achieved through biosimilar competition, according to the study.The research examined whether the potential cost savings from biosimilars is impacted by whether patients seek care from physician offices or hospital outpatient departments (HOPD), as the trend towards HOPDs might be impacting potential savings.

“Competition in the evolving market suggests innovator biologics and biosimilars both are competing on price to retain or gain market share. However, as HOPDs continue to markup the price of biologics at faster and higher rates than biosimilars and consolidation drives care away from physician offices into HOPDs, employers will continue to see costs go up. As a result, the savings potential from biosimilars may not be fully realized,” said Paul Fronstin, Ph.D., study co-author and director, Health Benefits Research, EBRI, in a statement.

Biosimilar markups in HOPDs averaged 87% in 2019, 101% in 2020, and 59%-141% in 2022. HOPDs were more likely than physician offices to use Neupogen, Herceptin, and Rituxan over their biosimilars. However, physician offices were more likely than HOPDs to use Remicade and Avastin. HOPDs and physician offices were about equally likely to use Neulasta and Epogen/Procrit.For all seven innovator biologics examined, allowed charges were higher in HOPDs than in physician offices.

“Our ongoing research findings continue to show that HOPD markups on physician-administered outpatient drugs result in costs that are, on average, twice as high as those in physician offices. This can significantly undermine the potential savings that could be achieved through biosimilar competition," said M. Christopher Roebuck, Ph.D., study co-author and founder & CEO of RxEconomics LLC, in a statement.

To view a report summary visit www.ebri.org/biologics-biosimilars.