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Concerns raised over CMS biosimilars reimbursement policy Posted 19/09/2015

In July 2015, the Centers for Medicare & Medicaid Services (CMS), which provides health insurance for the elderly and children in the US, released a proposed rule for the reimbursement of biosimilars. However, various groups have raised concerns about the proposal.

The proposed rule (CMS-1631-P) would assign a single code [Healthcare Common Procedure Coding System (HCPCS)] to all biosimilars of a particular reference product and would reimburse them based on the weighted average of their average sales price under Medicare Part B. However, groups which include the biologicals industry, chain drug stores, patients and health insurers have commented that the proposed rule would discourage innovation, erect barriers to developing biosimilars, and create safety issues due to the inability to differentiate between biosimilars and reference (brand-name) products.

The Biosimilars Forum, for example, ‘strongly disagrees’ with grouping all biosimilars under one code and is urging the CMS ‘to enact a final payment rule that assigns each biosimilar product of a reference biologic[al] its own payment amount and a unique HCPCS code’. The Forum believes that the CMS proposal ‘is likely to dramatically reduce investment in, and the subsequent availability of, biosimilar products’. While Anthem Inc, the third-largest health insurer in the US, said the proposal ‘would do little to encourage market competition between Part B biologic and biosimilar manufacturers’.

The Generic Pharmaceutical Association (GPhA) stated that having ‘a Medicare reimbursement policy that combines payments for non-interchangeable 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’.

The Biotechnology Industry Organization (BIO) is also objecting to the proposed reimbursement policy, which it says would make it difficult for prescribers, patients and Medicare contractors to distinguish between biosimilars using the same reference product. BIO is also urging the CMS to establish a unique HCPCS code for each biosimilar.

Comments on the proposed rule (CMS-1631-P) were due by 8 September 2015 and the CMS has stated that it will consider the comments as it works on the final version of the rule.

Editor’s comment
Medicare is a national social insurance programme, administered by the US federal government since 1966. It provides health insurance for Americans aged 65 and older who have worked and paid into the system, as well as to younger people with disabilities.

Medicare Part B generally covers drugs and biologicals that are not usually self-administered, including those that are administered in a physician’s office or hospital outpatient department.

Related article
US health insurance CMS outlines biosimilar policy

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Source: Biosimilars Forum, BNA, GPhA, GPO

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