Biologic Drug Prices in Medicare Part B After Entry of Biosimilars to the Market.

Importance: Price reductions for originator biologics with biosimilar competitors have been modest in the US. This may be due to the US reimbursement model, where clinicians or their employing medical institution receive payment based on the percentage of the cost billed, incentivizing the highest-cost product. Currently, US policymakers are debating changing this policy. However, a clear understanding of price reductions achieved by the current system is needed to inform future reform efforts. Objective: To assess the associations of biosimilar entry with the prices of originator biologics under Medicare Part B reimbursement. Design, Setting, and Participants: This cohort study used bayesian structural time series models to analyze Medicare Part B Drug average sales price (ASP) data from quarter 1 of 2005 to quarter 1 of 2025, including 7 biologics with biosimilars available for at least 3 years (bevacizumab, epoetin, filgrastim, infliximab, pegfilgrastim, rituximab, and trastuzumab). Exposure: Biosimilar entry. Main Outcomes and Measures: Relative differences in observed ASPs for originators and biosimilars vs the bayesian structural time series-estimated counterfactual ASPs for originators had biosimilars not entered the market. Results: Analysis included 7 originator biologics that entered the market between 1989 and 2024. The number of biosimilars marketed during the study period ranged between 1 and 6 for originator biologics studied. Biosimilar entry was associated with changes in the ASP of the originator biologic of -7.4% (95% prediction interval, -10.5% to -4.3%) at 1 year, -31.7% (95% prediction interval, -41.6% to -21.9%) at 3 years, and -43.1% (95% prediction interval, -61.3% to -24.8%) at 5 years. Savings varied by drug, with the largest price reductions observed with pegfilgrastim and infliximab, with 5-year price reductions of -82.0% (95% prediction interval, -95.2% to -54.0%) for pegfilgrastim and -62.3% (95% prediction interval, -73.4% to -45.2%) for infliximab. Biosimilar prices were generally lower than the originator biologics at all postentry periods and decreased over time. Conclusions and Relevance: In this cohort study, counterfactual analysis found that price reductions from biosimilar entry were more substantial than suggested by simpler pre-post comparisons. However, these savings remained less than those achieved by small-molecule generics, highlighting the need for policy reforms to enhance market competition and realize greater savings.