A new research report from the Employee Benefit Research Institute (EBRI) found that higher hospital mark-ups on biologic medicines are roughly doubling the costs for employers – and minimizing savings that could be achieved through biosimilar competition.

The research report entitled, "Location, Location, Location: Spending Differences for Biologic and Biosimilar Medications by Site of Treatment," looked at whether the potential cost savings from biosimilars is impacted by whether patients seek care from physician offices (PO) or hospital outpatient departments (HOPD), as the trend towards HOPDs might be impacting potential savings.

The original biologic, known as the innovator biologic, sometimes has substitutes, which are known as biosimilars. Biosimilars are similar versions of the medicine with no clinically meaningful difference in effectiveness or safety from the innovator biologic. In recent years, a robust biosimilar marketplace has emerged driving substantial savings for patients, employers and insurers.  As of February 2023, there are 29 biosimilars on the market competing against 11 innovator biologics.