New Report by IQVIA Institute for Human Data Science Outlines ASP Policies to Support Prescription Drug Affordability and Lower-Cost Biosimilars
Report reviews the challenge of ASP erosion in Medicare Part B and policy solutions that could ensure patients have access to biosimilars, including an ASP floor for provider reimbursements
The IQVIA Institute for Human Data Science released a report finding that biosimilars manufacturers and providers (hospitals, clinics, and other medical institutions providing these medicines) may be disincentivized to prescribe or switch patients to biosimilars due to dynamics present in the current Average Sales Price (ASP) and reimbursement system.
The report, Modeling Policy Proposals for Medical Benefit Biosimilar Reimbursement in the U.S., assesses five policy approaches designed to address these challenges through modifications to ASP-based reimbursement for medical benefit biosimilars, including:
- Smoothing ASP calculations across quarters
- Extending WAC-based reimbursement at launch
- Increasing add-on payment percentages
- Establishing minimum reimbursement floors
- Redefining ASP to exclude certain discounts
“Many industry stakeholders have highlighted that the current ASP and reimbursement system for biosimilars has created unsustainable dynamics for savings to continue in the long term,” said Murray Aitken, executive director of IQVIA Institute for Human Data Science. “The core issues lie with the current ASP and reimbursement system. As biosimilars have entered these markets, ASPs sharply declined, generating savings for payers and the healthcare system, but also creating scenarios where providers may not even be reimbursed for the full amount they paid to acquire the drugs, and in turn they may be incentivized to acquire the more expensive products in order to receive higher reimbursements.”
The report suggests that implementation of ASP floors for reimbursement and the removal non-provider discounts from the ASP calculation may support more long-term sustainability for the industry.
A reimbursement floor will maintain market viability for manufacturers and ensure hospitals and clinics aren’t penalized for choosing lower-cost medicines.
According to the study, spending on biologic medicines in the United States has grown rapidly, reaching $262 billion in 2024 and representing more than half of total medicine spending.
“Biosimilars are the commonsense, bipartisan solution to lowering prescription drug prices for Americans,” said Juliana M. Reed, executive director for the Biosimilars Forum. “Congress must prioritize policies that support biosimilars so that patients have access to the lower-cost medicines they need.”
Biosimilars have saved the U.S. healthcare system $56 billion. With more availability, the next five years could result in an increase in savings up to $181 billion.
The industry is facing a looming ‘biosimilars void.’ Over the next decade, 118 biologics are expected to lose patent protection, and biosimilars could offer significant cost-savings for each of these. Unfortunately, only 10 percent currently have biosimilars in development, while 90 percent have no biosimilar in the pipeline. This void further emphasizes the need for urgent policy reforms to ensure the marketplace is viable immediately and for the long-term.
“At some point, manufacturers may decide that the discounts being provided do not cover their costs of R&D or commercialization, especially if they do not gain market share, and they may consequently decide to withdraw from the market or stop pursuing clinical development for these biosimilars altogether,” Aitken said.
Read the full report from the IQVIA Institute for Human Data Science here. This research was supported by the Biosimilars Forum.
For more information on the Biosimilars Forum’s work to increase access to lower-cost biosimilars, visit biosimilarsforum.org.
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