Significant spending cuts with increased biosimilar use for Medicare Part D

According to a report from the US Department of Health and Human Service (HHS) Office of Inspector General (OIG), Biologics - usually large, complex molecules produced in a living system - are some of the most expensive drugs available, and spending for biologics is growing in Medicare Part D because they treat diseases common among Medicare beneficiaries. Biologics are estimated to cost Part D upwards of $12 billion annually.

A biosimilar is a lower cost biologic that is highly similar to an existing biologic approved by the Food and Drug Administration (ie, the biosimilar's "reference product").

Although a limited number of biosimilars are currently available for Part D covered reference products, multiple biosimilars for AbbVie’s (NYSE: ABBV) Humira (adalimumab) - the best-selling prescription drug in the world - are expected to be available in 2023, thereby presenting an opportunity to significantly decrease Part D drug costs. Humira generated global sales of $20.69 billion in 2021.