Economic Analysis Supports Formulary Shift to Biosimilar Denosumab

The rising cost of oncology care continues to strain health care budgets, prompting payers and providers to seek sustainable strategies that maintain high-quality clinical outcomes without compromising financial stability.

For managed care organizations, the integration of biosimilars into formularies represented a critical avenue for mitigating these expenses, particularly regarding supportive care therapies for metastatic bone disease.

A budget impact analysis published in the Journal of Medical Economics evaluated the potential financial implications of adopting biosimilar denosumab within a United States health plan. The research aimed to quantify the cost savings associated with switching from reference denosumab to a biosimilar and to estimate the clinical benefits of reinvesting those savings to expand access to treatment.

Skeletal-related events (SREs), such as pathologic fractures and spinal cord compression, are common complications for patients with metastatic cancer, significantly driving up medical costs and morbidity. While denosumab is a standard of care for preventing these events, its cost has historically been higher than alternative bisphosphonates like zoledronic acid.

The researchers developed two economic models from a US payer perspective to assess the impact of biosimilar denosumab over a 5-year period. The hypothetical model assumed a health plan covering 1 million lives, with a target population including patients with metastatic breast cancer, prostate cancer, multiple myeloma, and solid tumors.

The first model calculated the direct cost savings from converting patients from the reference denosumab products (Prolia and Xgeva) to a biosimilar. The second model explored a reinvestment scenario where the realized savings were used to transition patients currently treated with zoledronic acid to biosimilar denosumab, thereby expanding access to biological therapy.

Financial Findings and Budget Impact

The study projected substantial savings for payers who adopted biosimilar denosumab. In the base case scenario, which assumed a medium market conversion rate reaching 57.30% for oncology indications and 81.79% for osteoporosis indications by year 5, the total cost savings amounted to $38,677,606. This equated to a savings of $0.59 per member per month (PMPM) by the fifth year.

The investigators also modeled high and low conversion scenarios to account for market variability. A high conversion rate yielded a 5-year net savings of approximately $55.9 million ($0.85 PMPM), while a low conversion rate still resulted in savings of roughly $23 million ($0.35 PMPM).

Pricing assumptions played a significant role in the magnitude of these savings. The authors noted that even with a conservative 5% price reduction relative to the reference product, the plan saved over $5.7 million. On the other end of the spectrum, an 85% price reduction resulted in projected savings of nearly $97 million over the 5-year horizon.

Reinvestment and Clinical Outcomes

Beyond direct financial savings, the study highlighted the potential for improved clinical outcomes through resource reallocation. When savings were reinvested to treat patients previously receiving zoledronic acid, the model demonstrated that the health plan could treat approximately 100 additional patients with biosimilar denosumab for every 10% increase in reinvestment.

In the base case, reinvesting savings allowed for the treatment of an additional 998 patients. Consequently, the model predicted that this expanded access prevented 28.2 additional SREs and fractures over the 5-year period. This reduction in adverse events further compounded the value proposition by avoiding the high costs associated with inpatient hospitalizations and surgeries for bone complications.

The authors acknowledged several limitations to their modeling approach. The cost inputs relied on historical pricing trends for biosimilars relative to reference products, which may not have perfectly reflected current average sales prices (ASP) or payment limits at the time of implementation. Specifically, the model assumed a pricing structure that included a discount off the reference ASP plus an inflationary adjustment, which might have varied in real-world contracting.

Additionally, the 5-year time horizon may not have captured long-term outcomes for patients with chronic metastatic disease. The model also treated indications as mutually exclusive, potentially leading to double-counting in rare instances where a patient might have qualified for multiple indications. Finally, the reliance on published literature for discontinuation rates and SRE costs meant that the results might not have been generalizable to every specific health system or patient population.

The findings suggested that biosimilar denosumab offered a viable pathway for oncology practices and payers to reduce the total cost of care. For practices participating in value-based care arrangements, such as the Enhancing Oncology Model, these savings could be instrumental in managing financial risk.

By lowering the barrier to entry for biological therapy, the introduction of biosimilar denosumab appeared to support a more sustainable economic model while maintaining, or potentially improving, patient access to essential supportive care.

Reference

Flanigan J, Chaplin S, van Stiphout J, et al. A budget impact model for biosimilar denosumab for skeletal-related events and fractures in the United States oncology population. J Med Econ. 2025;28(1):2027-2038. doi:10.1080/13696998.2025.2584885