Report: Medicare Biosimilar Changes Could Save Billions

If the U.S. government revised its current Medicare Part B reimbursement policy for biosimilar drugs, it could save $11.4 billion over the next 10 years, according to a new report.

This finding is from

analysis, conducted by The Moran Company for the Association for Accessible Medicines (AAM) and its Biosimilars Council. The report states that that the Centers for Medicare and Medicaid Services’ (CMS) current reimbursement policy on biosimilar medicines could produce short-term savings, but at the expense of larger, long-term savings for Medicare.

“Additionally, in Part B, CMS has chosen to create a coding and reimbursement structure that deeply disincentivizes development of biosimilars …This policy could significantly limit biosimilar adoption in outpatient settings, which would create a significant barrier to entry for any potential biosimilar competitors,” said Chester “Chip” Davis, Jr., President and CEO of AAM, in a statement before the Senate Health, Education, Labor and Pensions Committee in mid-October.

However, Robert Goldberg, PhD, Cofounder and Vice President of the Center for Medicine in the Public Interest, does not agree with the report’s projected cost savings on biosimilars if the CMS policy were to be revised.

“Biosimilars are not proving to be the cost savers once promised. There are not enough in the pipeline to create enough competition to create a significant difference for payers,” Goldberg told Drug Topics. “Generics are easier to switch than active proteins and future patients will be treated based on what works versus what is cheapest in the short term."

CMS currently groups all biosimilars of a reference biologic under a single billing code and payment rate. Several groups have raised concerns that this policy undermines patient access to affordable biosimilar medicines and stifles the creation of a robust biosimilars market, according to AAM.

“The current policy would cause biosimilars manufacturers to exit the market over time or decide not to enter at all, ultimately leading to higher costs for patients,” AAM said in a statement about the new report.

“Shifting biosimilar reimbursement to unique codes increases patient access to more affordable, life-saving medicine and lowers prescription drug spending. This policy is critical to the development of a thriving biosimilars medicine market,” said Christine Simmon, Executive Director of the Biosimilars Council and Senior Vice President of Policy & Strategic Alliances at AAM. “This new report highlights the significant cost savings possible for both patients and payers if CMS implements this recommendation.”

CMS has solicited comments on biosimilar reimbursements in its “Revisions to Payment Policies under the Physician Fee Schedule and Other Revisions to Part B for CY 2018 proposed rule,” and is expected to issue a final rule in late October, according to AAM.