Site-Neutral Payment And Biosimilars Competition Are Complementary Purchaser Strategies For Cancer Biologics

Two policy strategies have been pursued to moderate spending on infused cancer biologics. The competition strategy seeks to stimulate market entry by biosimilars, under the principle that newer entrants will charge lower prices than current branded products and that branded products will offer price reductions to slow the loss of their market share. The site-neutral payment strategy seeks to reduce insurers' reimbursements to hospitals to the levels paid to physician practices, instead of having prices be determined by the hospitals' and physicians' relative market power. This study compared the potential savings from full implementation of the biosimilars competition and site-neutral payment strategies, respectively. Deidentified claims data for 2020-22 were obtained from national Blue Cross Blue Shield plans on 43,643 patients who incurred 429,517 infusion visits for cancer biologics and biosimilars. Across the three years covered by this study, potential savings from site-neutral payment ($1.004 billion) were double those from biosimilars competition ($0.465 billion).