Five-year analysis of the Drug Pricing Lab’s Production Plus Profit Pricing (P-quad) proposal for biologic drugs

The Drug Pricing Lab at Memorial Sloan Kettering engaged Milliman to estimate projected U.S. biologic and biosimilar drug spending from 2021 to 2025 under its Production Plus Profit Pricing (P-quad) proposal. This report describes our analysis and results. We projected U.S. biologic spending by drug for payers and beneficiaries from 2021 to 2025 under three different scenarios. Across all markets, we estimate $95 billion in total savings and $45 billion in federal savings from the current biosimilar environment, and $360 billion in total savings and $140 billion in federal savings with The Drug Pricing Lab’s P-quad proposal, relative to a counterfactual scenario where biosimilars do not exist.

This report was commissioned by the Drug Pricing Lab at Memorial Sloan Kettering Cancer Center.