Drugmakers Urge CMS to Reimburse Biosimilars Based on Average Sale Price

September 15, 2015

Drug and biologics makers are urging the Centers for Medicare & Medicaid Services to reimburse each noninterchangeable biosimilar based on its own average sale price, saying that would avoid prescribing mix-ups and possible harm to patient care.

CMS issued its proposed 2016 Medicare Part B physician fee schedule earlier this year, proposing that all biosimilars of the same reference product be reimbursed according to the same payment code. The plan hit an immediate nerve with industry and retailers.

Having both noninterchangeable and interchangeable biosimilars combined into a single payment calculation would require manufacturers to develop additional data at significant expense to obtain a designation as interchangeable with the reference product, GPhA says in comments filed with CMS.

Moreover, “a Medicare reimbursement policy that combines payments for noninterchangeable biosimilars in a way that presumes they are compared with one another, despite any evidence for such comparison, could cause patients to lose access to products for which Medicare pays less than the product’s average sale price,” GPhA adds.

CMS’ approach has the potential to push patients to one noninterchangeable biosimilar over another based on price — undermining Congress’ intent when it created a Part B reimbursement framework for biosimilars in the Affordable Care Act, which was to ensure patients received the most appropriate treatment, BIO asserts.

Using a blended reimbursement approach would also make it difficult for prescribers, patients and Medicare contractors to distinguish between different biosimilars that use the same reference product, the group says. Further, since products with the same reference product may diverge in their approved or extrapolated indications, unique HCPCS codes are needed to identify which biosimilar has been prescribed for a particular patient, BIO says.

GPhA and BIO were among more than 2,000 comments weighing in on the biosimilars proposal and other revisions to the 2016 Medicare Part B physician fee schedule.

Allergan argues that assigning all biosimilars to the same HCPCS code with a common descriptor could cause confusion if providers and coders observe discrepancies between the descriptor and the nonproprietary name of the biosimilar.

CVS Health calls the proposal a significant departure from how CMS treats other drugs in Part B and inconsistent with the scientific principles the FDA uses to approve biosimilars.

In August, a bipartisan group of 33 lawmakers in the House wrote to CMS Acting Administrator Andrew Slavitt challenging the plan to lump all biosimilars under a single payment code. — Jonathon Shacat