Oncology · Medical Literature
Pricing for Oncology Biosimilars—Reply
Abstract
In Reply I thank Drs Jensen and Tichy for the opportunity to respond to the comments on our article on hospital adoption and pricing for oncology biosimilars. Their comments are factually correct and add insight into the complex process of drug payment and strengthen the core message of our article.
Clinical relevance
This JAMA correspondence pertains to the original investigation by Robinson, Kosorukov, and Whaley (JAMA 2026;335[14]:1243–1249) examining how the 'buy and bill' reimbursement model shapes hospital adoption of oncology biosimilars — specifically bevacizumab, trastuzumab, and rituximab — for the more than 66,000 privately insured cancer patients who received these agents at over 1,500 U.S. hospitals between 2020 and 2024. The study addresses a critical and largely underappreciated gap: while biosimilar adoption is accelerating, the financial gains from lower acquisition prices are disproportionately being absorbed by hospitals rather than passed on to insurers or patients. With numerous high-cost oncology biologics losing patent protection in the coming years, understanding and correcting these payment-structure misalignments is an urgent priority for oncology practice, payers, and health systems.
Key findings
1. Biosimilar adoption increased dramatically from 2020 to 2024: bevacizumab biosimilar share rose from 32% to 93%, trastuzumab from 37% to 87%, and rituximab from 18% to 84% across 1,541 hospitals. 2. Hospital acquisition prices fell substantially faster than insurer reimbursement prices: acquisition costs declined by 60% for bevacizumab, 72% for trastuzumab, and 63% for rituximab, while corresponding reimbursement prices fell by only 32%, 36%, and 34%, respectively. 3. The divergence in acquisition vs. reimbursement price trajectories drove a marked expansion in hospital markup percentages: average percent markups rose from 298% to 778% for bevacizumab, from 181% to 924% for trastuzumab, and from 284% to 916% for rituximab. 4. In multivariable analysis accounting for hospital characteristics (including 340B drug-discount eligibility), the retained margin per dollar spent on biosimilar acquisition increased by $2.72 for bevacizumab, $1.82 for trastuzumab, and $2.32 for rituximab. 5. Overall, hospital percent price markups grew approximately 2.6- to 5.1-fold depending on the agent, and these markup increases were directly associated with higher rates of biosimilar adoption — demonstrating that financial incentive, not clinical preference alone, drove the switch. 6. An accompanying editorial noted that for trastuzumab biosimilars, hospitals could acquire the product at approximately $20/unit while being reimbursed at approximately $90/unit, yielding a $70 margin, yet originator reimbursement remained approximately $160/unit — raising concerns that insurer bargaining power has been insufficient to capture system-level savings.
Practice implications
Oncologists and pharmacy and therapeutics (P&T) committees should recognize that under the current 'buy and bill' model, hospitals have strong and growing financial incentives to adopt oncology biosimilars, and that this incentive structure — not clinical equivalence concerns alone — is a primary driver of formulary decisions; clinicians can proceed with confidence in prescribing biosimilars for bevacizumab-, trastuzumab-, and rituximab-eligible patients given both established therapeutic equivalence and demonstrated real-world adoption rates exceeding 80–93%. Health system administrators and payers should critically evaluate whether current reimbursement contracts for oncology biosimilars reflect actual acquisition costs, as the data indicate that the majority of savings from biosimilar adoption are being retained as hospital margin rather than reducing total cost of care — suggesting that gainsharing payment reforms, value-based contracts, or updated ASP-linked reimbursement schedules are needed to ensure that cost efficiencies benefit the broader healthcare system and, ultimately, patients.