When compared with biosimilars, P-quad would yield an additional $265 billion in savings overall.
In 2019, Bach and Trusheim argued biologics are effectively natural monopolies. Two years later, they come back with more data and more details, starting with a biosimilars market update. The problem – potential competitive entrants must first run risky, expensive, uncertain, and time-consuming R&D. On top of this being a barrier to entry, the team has now examined the cost and ethics of running clinical trials that have as their sole objective evaluating biosimilars. Tens of thousands of patient volunteers have been diverted to these studies instead of potentially participating in studies of innovative new therapies. A policy solution with accompanying implementation strategy to mitigate such sizable biologic drug spending, coined “P-quad” for Production Plus Profit Pricing, is in press. To round out the series, they commissioned Milliman, an actuarial firm, to model savings from the P-quad policy compared to the current environment of relying on biosimilar competition. Spoiler alert: the projected savings are staggering.
Wondering if it is only Bach and Trusheim worried about foregone savings from failing biosimilar competition? Nope – here is report from United Health Group pointing out the savings that could be achieved from biologics if their prices just fell when they are supposed to, even by far more modest amounts than P-quad policy would yield.
Quote source: Bach, Trusheim. The Drugs at the Heart of Our Pricing Crisis, New York Times.