Jofre-Bonet, Mireia, McGuire, Alistair 
ORCID: 0000-0002-5367-9841, Dayer, Victoria, Roth, Joshua A and Sullivan, Sean D
(2025)
The price effects of biosimilars in the United States.
Value in Health.
ISSN 1098-3015
(In Press)
Abstract
This study evaluates the impact of biosimilar competition on the price of reference products and biosimilars in the U.S. pharmaceutical market. We focus on Average Sales Price (ASP) dynamics since 2015 in Medicare Part B, as Medicare is a critical payer stakeholder in biosimilar price dynamics. Using Centers for Medicare and Medicaid Services (CMS) data over 34 quarters beginning in 2015, we analysed the price effects of biosimilar competition in eight biologic product markets. First, we evaluated the effect of biosimilar competition on ASP; and second, we evaluate the effect of market concentration on ASP using the Herfindahl-Hirschman Index (HHI). To address endogeneity between competition and ASP, we also use instrumental variable methods. Across analyses, our outcome variable is price ratio-the ratio of ASP measured over time relative to the fixed ASP at study baseline. Our results show a 10% to 13% decrease in the originator price ratio for entry of each additional biosimilar competitor, and a 1.8% decrease in the originator price ratio with a 10% decrease in market concentration at the lowest HHI observed in study period. These findings highlight the statistically significant effect of biosimilar competition and market concentration on prices in high-cost biologics drug markets. Our findings demonstrate that the U.S. biosimilars market has become highly competitive, and as a result, prices have declined significantly over the period 2015 to 2023. These price dynamics have generated substantial savings for Medicare but there is a potential threat to market sustainability if these price trend dynamics persist in the coming years. [Abstract copyright: Copyright © 2025. Published by Elsevier Inc.]
| Item Type: | Article |
|---|---|
| Divisions: | Health Policy |
| Subjects: | R Medicine > RM Therapeutics. Pharmacology |
| Date Deposited: | 20 Mar 2025 10:42 |
| Last Modified: | 28 Mar 2025 08:39 |
| URI: | http://eprints.lse.ac.uk/id/eprint/127600 |
Actions (login required)
 |
View Item |
