Hospitals across the United States are increasingly adopting oncology biosimilars as cost-effective alternatives to originator biologics, yet pricing strategies and uptake patterns reveal complex dynamics influenced by reimbursement models and institutional formularies. A recent observational study published in JAMA Oncology analyzed trends in hospital adoption and pricing of physician-administered oncology biosimilars for patients with private health insurance, shedding light on how financial incentives may shape prescribing behavior. The research, conducted by investigators from the University of Chicago and Harvard Medical School, examined claims data from 2018 to 2022 for biosimilars targeting trastuzumab, bevacizumab, and rituximab in outpatient oncology settings.
Findings indicated that while biosimilar use grew steadily over the study period, hospitals often priced these products near parity with reference biologics rather than offering significant discounts, a trend the researchers linked to potential implicit gainsharing arrangements. Under such models, healthcare providers may retain a portion of savings generated from lower-cost prescribing, creating a financial incentive to adopt biosimilars without necessarily passing full cost reductions to patients or insurers. The study’s authors noted that this pricing behavior could blunt the intended cost-saving benefits of biosimilars for the broader healthcare system.
Dr. Erin Fox, senior director of drug information and support services at University of Utah Health, explained that hospital formularies frequently prioritize net acquisition cost over list price when evaluating biosimilars. “What matters most is what the hospital actually pays after rebates and fees, not the sticker price,” she said in a 2023 interview with ASHP. “If a biosimilar offers a better net cost due to manufacturer contracts or purchasing group agreements, it’s more likely to be adopted—even if the headline price looks similar to the originator.”
The U.S. Food and Drug Administration has approved over 40 biosimilars as of 2024, with nearly a quarter designated for oncology indications. Among the most widely used are trastuzumab-dkst (Ogivri), bevacizumab-awwb (Mvasi), and rituximab-abbs (Truxima), all of which have demonstrated comparable safety and efficacy to their reference products in clinical trials. Despite this, uptake remains uneven across institutions, with academic medical centers and large health systems showing higher adoption rates than smaller community hospitals.
Reimbursement structures under private insurance play a significant role in shaping hospital incentives. Under the average sales price (ASP) model used by Medicare Part B, reimbursement is based on a percentage of the drug’s ASP, which can create margin compression for hospitals when drug prices fall. Though, private payers often use different methodologies, such as wholesale acquisition cost (WAC) minus a discount or fee-for-service models, which may alter financial outcomes for providers. These variations contribute to inconsistent biosimilar adoption nationwide.
A 2023 report from the IQVIA Institute for Human Data Science found that biosimilars had generated over $15 billion in cumulative savings in the U.S. Since 2015, with oncology biosimilars accounting for approximately 40% of that total. The report projected that continued market penetration could yield an additional $100 billion in savings by 2030 if uptake accelerates and pricing differentials widen.
Regulatory efforts to promote biosimilar competition have included the FDA’s Biosimilars Action Plan and the Biologics Price Competition and Innovation Act (BPCIA), which established an abbreviated approval pathway for biosimilars. In 2023, the Federal Trade Commission held a workshop examining barriers to biosimilar entry, including concerns about switching stability, prescriber awareness, and payer formulary placement.
Patient advocacy groups have generally supported biosimilar use when safety and efficacy are assured, emphasizing that reduced drug costs can improve access to life-extending therapies. The American Cancer Society Cancer Action Network (ACS CAN) has advocated for policies that encourage biosimilar adoption while maintaining rigorous post-market monitoring.
Looking ahead, experts suggest that greater transparency in hospital pricing and contracting practices could facilitate align incentives with broader cost-containment goals. Dr. Stacie Dusetzina, professor of health policy at Vanderbilt University Medical Center, noted that “without clear data on what hospitals actually pay and how savings are distributed, it’s difficult to assess whether biosimilars are delivering value where it’s needed most.”
The next update on biosimilar market trends is expected from the IQVIA Institute in mid-2024, with a comprehensive report on oncology biosimilar uptake and savings projections. Readers interested in tracking developments can follow updates from the FDA’s Biosimilars page or the Agency for Healthcare Research and Quality’s Effective Health Care Program.
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