In shared-savings reimbursement models in healthcare, physicians have an incentive to use health resources more efficiently: They may receive bonuses based on the money that they save compared with a benchmark. The accountable care organization model, Medicare shared-savings model, and the oncology care model (OCM) are a few examples. These started as demonstration projects created by the Centers for Medicare and Medicaid Services in an attempt to give physicians skin in the game—to spur them to take a more active role in improving the efficiency of healthcare spending.
Logically, the use of biosimilars might be a natural prescribing tool to achieve these goals. If biosimilars were successful in contributing to savings bonuses, it would help solidify their uptake, the financial security of their manufacturers, and improve the profitability of the physician practice. After all, biosimilars cost less (at least on an average sales price [ASP] basis) than reference drugs and may allow more patients to access these valuable biologics.
The Contribution of Biosimilars to OCM Savings
More specifically, the agents approved for the direct or supportive treatment of cancer would seem to be a perfect fit for physician practices participating in the OCM. This is not necessarily the case, according to panelists at the Association for Accessible Medicine’s (AAM’s) Access 2021 annual meeting. Nick Adolph, Associate Principal, Market Access Strategy Consulting, IQVIA told virtual meeting attendees, “The OCM participants are more likely than not to utilize biosimilars. Oncology biosimilars have ASPs that are about 10% to 20% below that of the reference product,” but he also added, “reimbursement is variable. It could hinder or help. We don’t know the answer to this yet.”
John Brooks, JD,Partner, South Capitol Consultants, commented that part of the issue is that the OCM itself has not yet demonstrated big savings. On the other hand, “If we do see those results come through, then it can really support the idea of improved patient access to biosimilars,” he said.
The problem is that the savings generated by the OCM model have been underwhelming. The last three-year evaluation of the OCM model by Abt Associates revealed no material savings in spending, hospitalization, or emergency department visits for patients receiving active treatment of cancer.
Started in 2016, the OCM was slated to end its demonstration period this year. It will be replaced by the Oncology Care First (OCF) model, which moves away from fee-for-service payment to a bundled payment. This could potentially raise the stakes further in favor of biosimilar utilization.
Oncology biosimilars have been a market success story in the US. However, if the shared savings model itself fails to deliver promised benefits, could a heavier influx of biosimilar utilization turn the tide for the overall model? On a small scale, it seems possible, at least according to one study. This is probably not the case on a larger scale, with only the filgrastim/pegfilgrastim, bevacizumab, trastuzumab, and rituximab biosimilars available.
Disappointing Savings in the OCM Overall
As part of the Abt Associates’ evaluation of the OCM performance, the consultants analyzed the use of filgrastim and pegfilgrastim in patients with low or intermediate risk of febrile neutropenia during the course of their cancer treatment. They did not note any strong trends in the greater utilization of these agents during the evaluation period, although biosimilar pegfilgrastim was recently introduced. They saw mixed results, varying by risk of neutropenia and by specific cancer state. However, an important trend was evident: “During episodes when filgrastim (originator or biosimilar) was used, OCM episodes had faster adoption and greater use of biosimilar filgrastim than comparison episodes. Rates of biosimilar use were generally similar in OCM and comparison episodes [early on], but use increased more in OCM episodes during the [latter two evaluation periods]. OCM practices’ emphasis on biosimilar rather than originator filgrastim reflects a straightforward strategy of therapeutic substitution that reflects more value-based use of the granulocyte-colony stimulating factors.”
At AAM’s meeting, Mr. Adolph presented data showing physicians who were in buy-and-bill practices have demonstrated a greater preference for biosimilars compared with physicians who receive their patients’ medications through specialty pharmacy delivery. As the OCM model was still founded on a fee-for-service basis, this is not really surprising. That trend has become stronger among the 2019 biosimilar (oncology) launches, noted Mr. Adolph. For those receiving “white-bagged” pharmaceuticals, they have no financial incentive to choose a reference or biosimilar product (the administration fee is the same).
It may well be that the OCM did not demonstrate greater savings because the tools available to oncology practices were somewhat limited. Perhaps the savings goals and benchmarks were not well aligned. I’d like to think that given enough time to work their magic and with an extended study in the alternative payment model setting, oncology biosimilars can produce the kind of attitude or policy change that results in more visible savings. That may only be seen if the OCF model and its bundled reimbursement approach proceeds.