Trends in List Prices, Net Prices, and Discounts for Originator Biologics Facing Biosimilar Competition

Introduction Biosimilars hold promise for reducing spending on biologics.1 Biosimilar prices are estimated to be 15% to 16% lower than originator products,2 but it is unclear how list prices, net prices, and discounts for the originator products change with biosimilar competition. We selected filgrastim, pegfilgrastim, infliximab, and insulin glargine as case studies because these were the only originator biologics that, by December 2018, faced competition from biosimilars (filgrastim-sndz, filgrastim-aafi, pegfilgrastim-jmdb, infliximab-dyyb, and infliximab-abda) or from other within-molecule substitutes (tbo-filgrastim and insulin glargine [Basaglar; Lilly]).3


Introduction
Biosimilars hold promise for reducing spending on biologics. 1 Biosimilar prices are estimated to be 15% to 16% lower than originator products, 2 but it is unclear how list prices, net prices, and discounts for the originator products change with biosimilar competition.

Methods
We obtained pricing data from January 2007 to June 2018 from SSR Health, 4 which provides quarterly estimates of list prices, net prices, Medicaid discounts, and discounts in other payers for branded products with US sales reported by publicly traded companies. Quarterly net prices are calculated as the ratio between sales and number of units sold. Discounts are calculated as the ratio between the difference in list and net prices (numerator) and the list prices (denominator). Net prices and discounts capture all manufacturer concessions and not solely rebates. 4 For each drug and year, we calculated the mean list and net prices and the mean discounts in Medicaid and other payers. 5 We conducted our analyses from August 12 to October 7, 2019. This study was approved by the institutional review board at the University of Pittsburgh as exempt from informed consent procedures because of the use of unidentifiable data. We followed the Strengthening the Reporting of Observational Studies in Epidemiology (STROBE) reporting guideline for cohort studies.

Discussion
In 4 case studies, we observed that the net prices of originator biologics decreased following the entry of biosimilars or other substitutes. For infliximab and insulin glargine, decreases in net prices in panels B and D, represent the entry of biosimilar competitors, whereas the blue dotted line (tbo-filgrastim) in panels A and C represents the entry of a competitor approved through a pathway other than the abbreviated biosimilar licensure pathway. Tbo-filgrastim was not approved through the biosimilar pathway; however, it constitutes a substitute for originator filgrastim because it presents the same molecule and formulation. Estimates of net prices and discounts comprise all concessions made by manufacturers, including rebates, coupon cards, 340B discounts, prompt pay discounts, returns provisions, and any other deductions accounted for in the reporting of net sales. 4 SSR Health estimated Medicaid discounts as the sum of the 23.1% rebate and the inflation rebate for price increases above the consumer price index. 5 Discounts in payers other than Medicaid were estimated by subtracting Medicaid discounts from total discounts and the number of units reimbursed by Medicaid from total US sales. Thus, supplemental Medicaid rebates negotiated by states or managed care organizations are captured by estimates of discounts in payers other than Medicaid rather than by estimates of Medicaid discounts. had commenced 2 to 3 years before the commercialization of competitors; however, decreases further accelerated following competitor entry. Decreases in net prices were primarily due to increases in manufacturer discounts, specifically in payers other than Medicaid.
While the decreasing net prices of infliximab and filgrastim had been previously described, 6 our study is the first, to our knowledge, to examine pegfilgrastim and insulin glargine and the contribution of non-Medicaid discounts toward lowering net prices.
Our study is subject to several limitations. First, estimates of Medicaid discounts only reflect the statutory rebates. Second, our analyses cannot determine whether net price decreases were associated with the entry of biosimilars or with other factors. Third, there are important differences in the market of each of the agents included in our study; for instance, insulin glargine is not considered a specialty drug, and infliximab is mostly administered in physician's offices. Fourth, it is not possible to establish whether larger discounts were due to increases in rebates or to other manufacturer concessions. Nevertheless, our findings show that biologics that faced biosimilar Insulin glargine (Basaglar) was not approved through the biosimilar pathway; however, it constitutes a substitute for originator insulin glargine because it presents the same molecule and formulation. Estimates of net prices and discounts comprise all concessions made by manufacturers, including rebates, coupon cards, 340B discounts, prompt pay discounts, returns provisions, and any other deductions accounted for in the reporting of net sales. 4 SSR Health estimated Medicaid discounts as the sum of the 23.1% rebate and the inflation rebate for price increases above the consumer price index. 5 Discounts in payers other than Medicaid were estimated by subtracting Medicaid discounts from total discounts and the number of units reimbursed by Medicaid from total US sales. Thus, supplemental Medicaid rebates negotiated by states or managed care organizations are captured by estimates of discounts in payers other than Medicaid rather than by estimates of Medicaid discounts.