Hospitals Pharmaceuticals Public Policy Supply of Medical Services

Impact of 340B on the use of biosimilars

Biosimilar drugs for biologic treatments are analogous to generic drugs for branded small molecules. Switching to biosimilars after biologic patent expiry can save payers and patients money. Why doesn’t it happen more often? There are a variety of reasons but a paper by Bond et al. (2023) argues that the 340B program incentivizes hospitals to prescribe the reference biologic product rather than the less expensive biosimilar.

Using a regression discontinuity design and two high-volume biologics with biosimilar competitors, filgrastim and infliximab, we estimated that 340B program eligibility was associated with a 22.9-percentage-point reduction in biosimilar adoption. In addition, 340B program eligibility was associated with 13.3 more biologic administrations annually per hospital and $17,919 more biologic revenue per hospital. Our findings suggest that the program inhibited biosimilar uptake, possibly as a result of financial incentives making reference drugs more profitable than biosimilar medications.

You can read the full paper here.