Data Snapshot: Biosimilar Cost and Use Trends in Medicare Part B

Why OIG Did This Review

• Biologic drugs—some of the most expensive drugs available—are estimated to cost Medicare Part B and its enrollees upwards of $32 billion annually. A biosimilar is highly similar to and has no clinically meaningful difference from an existing Food and Drug Administration approved biologic drug (i.e., the biosimilar’s “reference product”), and biosimilars are often less expensive.
• In September 2023, OIG issued Biosimilars Have Lowered Costs for Medicare Part B and Enrollees, but Opportunities for Substantial Spending Reductions Still Exist (OEI-05-22-00140). For that report, we analyzed quarterly biosimilar and reference product Average Sales Prices; use; and program and enrollee costs in Medicare Part B from 2015 to 2021.
• We found that after biosimilar competition, both reference product and biosimilar prices fell, leading to lower costs for the Medicare Part B Program and enrollees. Furthermore, while use of biosimilars in Medicare Part B has grown significantly, we found that opportunities exist to further reduce Part B and enrollee spending through increased use of more affordable biosimilars or with the implementation of different payment policies. OIG recommended that CMS pursue one or more payment changes that could further realize savings from biosimilars for Part B and enrollees.
• This data snapshot is a companion to that report. It presents additional data points for each biosimilar and reference product from our analysis to give readers greater understanding of how biosimilar use and costs have developed in the Part B program