An assessment of the provider financial risk impacts of adoption of biosimilars in the Medicare Oncology Care Model

6613 Background: In 2016, Medicare launched the Oncology Care Model (OCM)—a Value-Based Payment (VBP) initiative providing per-beneficiary prospective payment to providers, and performance-based financial incentives/risks based on cost of care in 6-month ‘episodes’ vs. risk-adjusted benchmarks for cancer patients receiving chemotherapy. Oncology biosimilars may play an important role in managing financial risk in the OCM and other VBP models, but the real-world impact remains uncertain. The objective of this study was to quantify the impact of biosimilar adoption on oncology provider financial risk under the OCM using real-world data. Methods: We estimated the impact of biosimilar adoption on provider financial risk from 2019 to 2021 by modeling the methods (episode framing, pricing, & risk adjustment) of the OCM. Cancer episodes were identified from the 5% Medicare Limited Data Set (LDS). The study sample consisted of cancer treatment episodes with use of any of the following agents or their biosimilars: bevacizumab, rituximab, trastuzumab, epoetin alfa, filgrastim, and pegfilgrastim. Financial risk was defined as the difference in observed total cost of care vs. OCM target episode cost. The primary outcome was the difference in financial risk (expressed in nominal $USD) under observed use of reference and/or biosimilars vs. hypothetical use of 100% reference agent. Results: The study sample included 8851 6-month episodes initiating between 1/2019 and 6/2021. Biosimilar adoption resulted in a mean cost reduction of $1,020 per episode vs. hypothetical 100% use of reference agents. Biosimilar use increased markedly over the study horizon--with 24% of episodes with a biosimilar in Half (H)1 2019, increasing to 65% by H1 2021, and driven by increased use of antineoplastic (1% to 36%) vs. supportive care biosimilar agents (23% to 34%). Mean financial risk reduction grew with the rapid adoption of biosimilars over this period. The average risk reduction in episodes initiating in H1 2021 was about 10 times larger than that seen in episodes initiating in the H1 2019 ($2060 vs $201, See Table). Observed mean cost was below the OCM target cost ($48808) in H1 2021 but exceeded the target cost in all other periods (range: +$1451 to +$4966). Conclusions: From 2019 to 2021, rapid adoption of biosimilars in Medicare fee-for-service beneficiaries included in the LDS led to substantial cost savings and reduction in risk for cancer episodes evaluated under the OCM methods. Broad adoption of biosimilars is a key strategy that providers in oncology VBP models will need to consider to manage financial risk. [Table: see text]