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IQVIA modelling shows US$52B in savings at risk under current ASP system
In February 2026, the IQVIA Institute for Human Data Science published a report, ‘Modeling Policy Proposals for Medical Benefit Biosimilar Reimbursement in the U.S.’ [1]. The report outlines that spending on biologicalmedicines in the US now exceeds US$260 billion annually; and warns that flaws in the current reimbursement system could threaten the long-term future of biosimilars.
The analysis focused on biosimilars reimbursed under the medical benefit, e.g. Medicare Part B. It found that the current Average Sales Price (ASP)-based reimbursement model may discourage both biosimilar manufacturers and healthcare providers (hospitals, clinics, and other medical institutions that administer these medicines) from investing in, prescribing or switching patients to biosimilars.
Biological medicines accounted for more than half of all U.S. medicine spending in 2024, reaching an estimated US$262 billion. As patents on major biologicals expire, biosimilars have increasingly entered the market, helping reduce costs for healthcare systems and patients alike. Yet the report argues that reimbursement dynamics may now be undermining the sustainability of those gains.
Under the current system, providers can face shrinking reimbursement rates as biosimilar prices decline. At the same time, biosimilar manufacturers may become trapped in what the report describes as ‘ASP spirals’,where continuous discounting drives prices down to financially unsustainable levels. The result, researchers warn, could include reduced manufacturer participation, fewer treatment options, and weaker competition over time.
To address these concerns, the report modelled five policy reforms to the ASP reimbursement system, including:
Here, proposals 4 and 5 emerged as the most promising.
Proposal 4 establishes reimbursement ‘floors’, guaranteeing providers a minimum reimbursement level even as market prices fall. The report outlines that this could help stabilize provider cost recovery while reducing pressure on manufacturers to continually cut prices.
Proposal 5 removes non-provider discounts from ASP calculations. According to the report, including such discounts in reimbursement formulas can distort incentives, in some cases encouraging providers to use higher-cost products because they generate larger reimbursements.
The analysis focused on biosimilars reimbursed under the medical benefit, e.g. Medicare Part B. It Researchers found that combining the two policies could improve provider incentives while preserving most of the savings biosimilars currently generate.
Additionally, the report examined five major biological markets that have seen multiple biosimilar entrants: infliximab, pegfilgrastim, rituximab, trastuzumab, and filgrastim. Without biosimilars, total spending on those drugs would have reached US$148 billion. Biosimilar competition reduced spending by approximately US$52 billion, lowering total expenditures to around US$96 billion.
Under the proposed combined policy scenario, researchers estimate that roughly US$40 billion in savings would still have been achieved, representing 77% of historical savings if the policies applied only to biosimilars. If the reforms were extended to both biosimilars and originator biologicals, the proportion of maintained savings would fall to 63%.
The remaining difference – approximately US$12 billion – is framed in the report as a potential investment in maintaining a stable and competitive biosimilars market.
The findings highlight a growing policy debate around how to balance immediate healthcare savings with the long-term viability of biosimilar competition. The researchers conclude that future reforms must ensure all stakeholders (manufacturers, providers, payers, and patients) remain sufficiently incentivized to participate in the market while continuing to deliver savings to the healthcare system overall.
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Source: IQVIA 2026
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