Amanda Forys, MSPH, discusses the critical lack of clarity in the US biosimilars marketplace.
Is there a specific policy that’s missing from the biosimilars market?
I think there’s several areas that manufacturers are looking for clarification in and bringing biosimilars to market around the patent dance and a lot of other different things that the FDA still has to put out guidance on. But, one of the biggest payment policy issues that I think is being ignored right now, that will be an issue as more products come to market, is how biosimilar products are being treated under the Medicare Part D. Currently, if you are taking a branded product and you hit the doughnut hole, and you’ve spent, now you’re responsible technically to pay the full cost of your drug—well, the coverage gap is closing now and manufacturers can offer this discount for you to help you get out of the doughnut hole but not have to pay the full cost of your drug.
So, if a drug was $100 before the patient would have paid $100 and that money would have counted toward their true out-of-pocket and gotten them through to catastrophic. Once they get into catastrophic coverage they are only responsible for 5% of their drug cost. Well, with the coverage gap discount program, the manufacturer said, we will now pay 50% of the drug cost, the patient will pay 45% of the drug cost, and then the plan kicks in the final 5%. That’s how the coverage gap will close by 2020. That money though, that the manufacturer is giving to the patient, counts as their true out-of-pocket cost. Biosimilars are not considered branded products in the eyes of Medicare for non-low-income subsidy beneficiaries. So, when they hit that coverage gap, the drug will be treated as a generic product instead of as a branded product. Now the patient will have to pay a higher percentage relative to what they would have paid if the product was treated as a branded product and what the plan is picking up—so now it’s a share between what the plan and the patient has to pay. What the plan is picking up does not count toward that troop and help the patient get into the doughnut hole. Because we are seeing a lot of these products coming out right now that are on the Part B side and not on the Part D side.
There really hasn’t been a final answer on "was that the intent of this or have we just not addressed it yet?" I think manufacturers will be looking for that guidance moving forward. For low-income subsidy patients, a biosimilar is counted as a branded product, so they do pay a higher copay when they access the drug if someone is an LIS beneficiary. So, this inconsistency is definitely something that will need to be addressed in the future. Not just LIS and not LIS but for the Medicare program as a whole.