Oncology · Medical Literature
Pricing for Oncology Biosimilars
Abstract
To the Editor We wish to express several concerns regarding the article on hospital adoption and pricing for oncology biosimilars. First, we disagree with the statement that “Medicare bases its reimbursement for biosimilars on the high acquisition price for the biologic, not the low acquisition price for the biosimilar. A hospital that purchases a biosimilar at the biosimilar acquisition price thus gains from Medicare the difference between the biologic reimbursement and the biosimilar reimbursement.”
Clinical relevance
This observational study addresses a critical gap in understanding how hospital financial incentives shape adoption of oncology biosimilars—physician-administered agents (bevacizumab, trastuzumab, rituximab) that are therapeutically equivalent to their reference biologics but substantially less expensive. The study population encompasses more than 66,000 commercially insured cancer patients treated across 1,541 U.S. hospitals from 2020–2024, a period of rapid biosimilar market expansion. The accompanying Letter to the Editor raises mechanistic concerns about Medicare reimbursement characterizations, underscoring that the policy implications of this work remain actively debated and are directly relevant to oncologists, hospital pharmacists, and payers managing oncology drug budgets.
Key findings
1. Biosimilar acquisition prices declined markedly over the 5-year study window: bevacizumab biosimilar acquisition prices fell 60%, trastuzumab 72%, and rituximab 63%—substantially outpacing corresponding reimbursement price declines of 32%, 36%, and 34%, respectively. 2. Hospital percent markup (margin/acquisition price × 100) expanded 2.6- to 5.1-fold depending on the agent: bevacizumab markups rose from 298% to 778%, trastuzumab from 181% to 924%, and rituximab from 284% to 916%. 3. In multivariable analysis accounting for hospital characteristics, retained margin per dollar of biosimilar acquisition cost increased by $2.72 for bevacizumab, $1.82 for trastuzumab, and $2.32 for rituximab. 4. Biosimilar adoption increased rapidly in parallel with expanding margins: bevacizumab share rose from 32% to 93%, trastuzumab from 37% to 87%, and rituximab from 18% to 84% of administered units between 2020 and 2024. 5. The study identified a gainsharing-driven 'spiral of discounts' in which manufacturers reduce acquisition prices annually and hospitals follow with slower reimbursement price reductions, structurally expanding hospital margins and incentivizing biosimilar uptake. 6. The accompanying editorial cautioned that while biosimilar adoption increased substantially, the gains in system-level savings were disproportionately captured by hospitals rather than insurers or patients, and called for policy mechanisms to make savings realization more automatic rather than discretionary. NOTE: The abstract submitted is a Letter to the Editor disputing Medicare reimbursement characterizations in the original article; no independent quantitative findings were available from the letter itself. All data above are sourced from the primary investigation to which the letter responds.
Practice implications
Oncologists and hospital pharmacists should recognize that the current gainsharing reimbursement structure creates a strong and demonstrable financial incentive for hospital-based substitution of biosimilars for reference biologics in physician-administered settings, and can confidently support formulary-level conversions for bevacizumab, trastuzumab, and rituximab given both the therapeutic equivalence and the magnitude of adoption already observed. However, clinicians and administrators should also be aware that insurer reimbursement policies—including how commercial payers and Medicare Part B calculate ASP-based reimbursement—remain contested (as highlighted by the Letter to the Editor), and that 340B-eligible hospitals may experience different margin structures that affect local biosimilar adoption incentives. Policy engagement by oncology leaders is warranted to ensure that system-level savings from biosimilar adoption are equitably distributed among hospitals, payers, and ultimately patients, rather than retained predominantly as hospital margin.