Financial Incentives Drive Biosimilar Adoption in Japan

Financial incentives provided to hospitals in Japan led to a significant increase in biosimilar oncology drug prescriptions. | Image Credit: izzuan - stock.adobe.com

Increased prescriptions of biosimilar products were associated with financial incentives provided to hospitals that utilized biosimilars in Japan, according to an analysis published in PLoS One.¹

Across the US, Europe, and Japan, regulatory approvals for bevacizumab, trastuzumab, and rituximab, all oncology drugs, have been granted. The 3 countries have expressed cost-saving expectations of over US$110 billion by 2029, mainly due to the substitution of oncology biosimilars for reference biologics.

Biosimilar adoption in the US has revealed gradual increases based on insurance type.² In 2022, Medicaid plans had the highest biosimilar adoption rates (44%), emphasizing the financial and policy challenges in incentivizing biosimilar prescriptions under Medicare.

This year, 10 drugs’ prices were negotiated under the Inflation Reduction Act (IRA) for Medicare Part D beneficiaries.³ According to CMS actuaries, these lower prices taking effect in 2026 are projected to result in total expenditures that are on average $2 trillion lower than estimates in 2010 and $780 billion lower than in 2015.

The European Union has achieved increased biosimilar adoption and cheaper drug costs through the creation of a comprehensive regulatory framework that includes guidelines on biosimilarity and interchangeability.⁴ Despite these successful efforts, challenges persist in terms of educational gaps, concerns around extrapolation of indications, and lack of robust real-world evidence.

Another technique utilized to address barriers in biosimilar adoption is the reexamination of the national pricing system for biosimilar drugs as well as education for clinicians and patients regarding the efficacy and safety of biosimilars.¹ In 2022, Japan introduced a new health policy to promote biosimilars over originator products in oncology settings. Eligible hospitals were able to claim an additional financial award per patient for up to 3 months.

“The current study aimed to identify an association between financial incentives promoting biosimilar products rather than reference products in oncology and changes in prescription patterns using Japanese administrative data,” stated the study authors.

A quasi-experimental, generalized synthetic control study was conducted using Diagnosis Procedure Combination data from the Quality Indicator/Improvement Project database, managed by the Department of Healthcare Economics and Quality Management at Kyoto University. More than 500 hospitals were included in the program, both public and private institutions across Japan.

The study included 27,737 patients from 114 hospitals during the study period with 63 hospitals eligible for financial incentives. Prescriptions for biosimilar products increased gradually in both eligible and ineligible hospitals while reference products decreased.

Financial incentives (maximum of 4500 Japanese yen per case; US$29.09) were linked to increased proportions of biosimilar product prescriptions at 0.092 per month (95% CI, 0.040-0.145) compared with ineligible hospitals. Similar results of the proportion of biosimilar product prescriptions were found after the intervention time was altered to April 2022. Eligible and ineligible hospitals had gradual reductions in the average monthly expenditure sum for biosimilar and reference products as well.

The study's findings may be limited by methodological shortcomings and external factors. The lack of a comprehensive evaluation of clinical and patient-reported outcomes, coupled with concerns about biosimilar prescriptions and the limited generalizability of the study, suggest the need for further research to fully understand the impact of the intervention.

Financial incentives provided to hospitals to utilize biosimilar products increased patient prescriptions overall. The health policy model represented in Japan suggests a potentially effective approach to increase use of biosimilars through moderate financial incentives.

References

1. Itoshima H, Takada D, Goto E, Sasaki N, Kunisawa S, Imanaka Y. The impact of financial incentives promoting biosimilar products in oncology: a quasi-experimental study using administrative data. PLoS One. 2024;19(11):e0312577. doi:10.1371/journal.pone.0312577

2. Jeremias S. Overcoming challenges to improve access and reduce costs. Center for Biosimilars. November 12, 2024. Accessed November 18, 2024. https://www.centerforbiosimilars.com/view/overcoming-challenges-to-improve-access-and-reduce-costs

3. Santoro C. CMS forecasts health spending growth to slow slightly. AJMC^®. October 8, 2024. Accessed November 19, 2024. https://www.ajmc.com/view/cms-forecasts-health-spending-growth-to-slow-slightly

4. Jeremias S. Revolutionizing biopharmaceuticals: the EU’s biosimilar success and remaining challenges. Center for Biosimilars. October 16, 2024. Accessed November 18, 2024. https://www.centerforbiosimilars.com/view/revolutionizing-biopharmaceuticals-the-eu-s-biosimilar-success-and-remaining-challenges