A new CMS proposed rule seeks to encourage the use of lower-cost biosimilars instead of reference biologics under Medicare Part D. The proposed rule would modify the definition of generic drugs—for the purposes of non–low-income-subsidy (LIS) catastrophic and LIS cost-sharing—to include biosimilar therapies.
A new CMS proposed rule seeks to encourage the use of lower-cost biosimilars instead of reference biologics under Medicare Part D. The proposed rule would modify the definition of generic drugs—for the purposes of non—low-income-subsidy (LIS) catastrophic and LIS cost-sharing—to include biosimilar therapies.
CMS reports that it has received numerous requests to redefine generic drugs, noting that advocates have expressed concerns that LIS Medicare enrollees are required to pay higher brand copayments for biosimilars, and that treating biosimilars as branded products for the purpose of LIS cost-sharing creates a disincentive for LIS enrollees (as well as non-LIS enrollees in the catastrophic portion of the benefit) to select lower-cost therapies.
The proposed rule would revise the definition of generic drug to include “follow-on biological products” for purposes of cost-sharing, which CMS predicts will incentivize enrollees to choose biosimilars and thereby reduce costs to the Part D program.
CMS emphasized that the rule would treat biosimilars as generics solely for cost-sharing purposes: “We want to avoid causing any confusion or misunderstanding that CMS treats follow-on biological products as generic drugs in all situations. We do not believe that would be appropriate because the same FDA requirements for generic drug approval (for example, therapeutic equivalence) do not apply to biosimilar biological products, currently the only available follow-on biological products,” according to the proposed rule. “Accordingly, CMS currently considers biosimilar biological products more like brand-name drugs for purposes of transition or midyear formulary changes because they are not interchangeable.”
Notably, the proposed rule does not include language to address reduced patient cost-sharing in Part D coverage gap (or the so-called “donut hole”), nor does it include language that would change the requirement for a biosimilar manufacturer to provide a 50% rebate for products while a patient is in the coverage gap.
CMS is also contemplating other changes to help reduce the price of drugs under Part D, including requiring a percentage of manufacturers’ rebates that have been negotiated for a drug covered under Part D to be included in the drug’s point-of-sale price. This change targets the rebates and discounts negotiated between manufacturers pharmacy benefit managers (PBMs) that are not being passed along to Medicare beneficiaries.
Currently, according to the proposed rule, “Part D sponsors are allowed, but generally not required, to apply rebates and other price concessions at the point of sale to lower the price upon which beneficiary cost-sharing is calculated. To date, sponsors have elected to include rebates and other price concessions in the negotiated price at the point-of-sale only very rarely.”
CMS will take comments on the proposed rule until January 16, 2018.
Study: More Biosimilar Competition Is Not Lowering Patient OOP Costs
March 29th 2024Despite more biosimilars entering the market and generating significant savings for payers and health care systems, these savings are not resulting in lower out-of-pocket (OOP) costs for patients, according to a recent study.
Exploring the Biosimilar Horizon: Julie Reed's Predictions for 2024
February 18th 2024On this episode of Not So Different, Julie Reed, executive director of the Biosimilars Forum, returns to discuss her predictions for the biosimilar industry for 2024 and beyond as well as the impact that the Forum's 4 new members will have on the organization's mission.
A New Chapter: How 2023 Will Shape the US Biosimilar Space for 2024 and Beyond
December 31st 2023On this episode of Not So Different, Cencora's Brian Biehn and Corey Ford take a look back at major policy and regulatory advancements in 2023 and how these changes will alter the space going forward.
Webinar Addresses Solutions to Improve Adalimumab Biosimilar Uptake
March 18th 2024Government policies, including those related to prescribing incentives and interchangeability, need to be reworked to encourage biosimilar adoption and create meaningful savings for health systems, according to speakers at a recent webinar.
BioRationality: MHRA's Procedure Enables Automatic Registration of Biosimilars Approved Elsewhere
March 18th 2024Sarfaraz K. Niazi, PhD, explains how the new international recognition procedure under the Medicines and Healthcare Products Regulatory Agency (MHRA) could expand biosimilar access within the United Kingdom, in his latest column.