Cost savings through use of oncology biosimilars in the US
The cost of care is on everyone ’ s mind in the United States and the situation will likely move in the way of searching for cost-efficiency . As these forces reach out , there should be a greater demand for biosimilars
Shannon Ugarte MD Alameda Health Systems
Kevin Knopf MD MPH Alameda Health Systems ; Institute of Health Policy and Research , University of California San Francisco ; Department of Pharmacoeconomics , School of Pharmacy , University of South Carolina School of Pharmacy , SC , USA
What cost savings will be achieved through the use of oncology biosimilars in the US ? The real answer is , “ it depends ”. The RAND Corporation had projected a savings of $ 44.2 billion from 2014 to 2024 in the US . 1 This is likely an overestimation – but this would imply a near 100 % utilization of biosimilars as well as price savings that have not materialized . Although Europe and Japan have gone from 0 % utilization to almost 60 % of utilization in a relatively short time , the same uptake has not been seen in the US – and may not be seen in the current health care environment . 2 , 3 The reasons for this are multifactorial and complex .
Health economics is a zero sum game with a complex asset allocation problem . The US spends 17 % of gross domestic product or 3.6 trillion dollars a year on health care ($ 280 billion on cancer care alone ), but our health care system ranks 50th in the world in terms of global perspectives and outcomes . As the only industrialized nation without a single party payer system , health care in America is based on business principles , with ‘ market efficiency ’ and ‘ competition ’ as guiding principles for health care delivery . While wealthier patients with ‘ Cadillac ’ insurance plans can enjoy top-tier medical care , those in the middle and lower classes are increasingly left with more difficult access to medical care , a higher percentage payment of cost of care , and a larger fear of ‘ medical bankruptcy ’ and ongoing ‘ financial toxicity ’. 4 , 5 Indeed , 50 % of women with metastatic breast cancer in the US are being pursued by debt collectors .
The goal of health care organizations in the US is not only to provide high quality health care but also to maximize revenue / profit , as the business model necessitates . This is denoted as ‘ surplus ’ given that most US health care institutions are of a nonprofit status , apart from public and rural hospitals , which by their nature often run at a deficit . These economic approaches work well with consumer goods , but in health care this can be a fallacy . The purchaser of the product ( health care ) has no knowledge of what he / she is buying or how to price it , and there is no price transparency on which to base a rational decision . Payment in health care is provided by a third party ( private insurance for those of working age , which is tied to employment ) and as a work-related health benefit . Employees do not have the choice to ‘ shop competitively .’ Employees might have a limited number of health care options or can only change options annually . The ‘ customer ’ ( patient ) does not know exactly what it is he / she needs to restore their usual health and is typically not the payer – apart from co-pays and coinsurance . And , because many private insurers are allowed to profit as a percentage of their total spend , there is no downward pressure by the payer to lower the prices they pay .
Many of the hospital systems in the US have become bankrupt in 2019 / 2020 , particularly those in rural areas or those serving the poor . COVID-19 has exacerbated this problem dramatically by interrupting the usual revenue streams hospitals have used to stay financially healthy . Elective / surgical / imaging procedures are still down markedly at the time of writing . Many more hospitals are likely to close or merge to survive . Consolidation of health care systems has been the norm for the past several years and continues in the hopes of achieving either ‘ economies of scale ’ or sheer market power to negotiate with payers .
Now that we have a macroscopic view of US health care , we can return to the question of
hospitalpharmacyeurope . com | 2021 | 15