Reimbursement remains a substantial concern in the market for biosimilar products, according to Amanda Forys, MBA, director of Xcenda’s Reimbursement Policy Insights consulting team.
Reimbursement remains a substantial concern in the market for biosimilar products, according to Amanda Forys, MBA, director of Xcenda’s Reimbursement Policy Insights consulting team.
Forys told The American Journal of Managed Care® in an interview that “The biggest concern with biosimilars coming to the market…[is] around the stability of the market and where we think it can go in the future. While we’ve got products coming to market, there’s a lot of concern around reimbursement, policy, and coverage for these products, and if [biosimilars] will be sustainable in the future.”
The most pressing reimbursement questions center on Medicare; according to Forys, the industry needs clarification on whether a biosimilar could be considered a brand for the purposes of Medicare Part D coverage. In 2017, the Medicare coverage gap begins once a patient reaches $3700 in drug spending, and closes once the patient has spent $4950. During that gap in coverage—also known as the “donut hole”—the manufacturer’s rebate on branded drugs counts toward the patient’s out-of-pocket spending, thereby closing the gap more quickly. Yet biosimilars are not currently considered branded drugs. Says Forys, “Here you’ve got a product that Medicare isn’t counting as a brand, so patients in that coverage gap are not getting any help; the patient is still paying a bit more for the prescription. At the end of the day, a plan’s going to say, ‘How are we sitting with these products, how are patients paying out of pocket, what type of utility are we seeing from everyone’s perspective?’”
Additional challenges to biosimilar reimbursement for Medicare center around billing codes. Currently, all biosimilars for the same reference product must be assigned a single billing and payment code, or J-code, and are reimbursed at a blended rate. CMS has suggested that it may alter this policy after some stakeholders criticized the approach for having a chilling effect on competition.
One proposed alternative is the assignment of a unique J-code to each biosimilar product, but Forys says that the Medicare Payment Advisory Commission (MedPac) has other ideas: "You’ve got MedPac coming in, and they’re saying ‘we want to simplify the whole system…we’d like to see the originator product and the biosimilar grouped together and share a code.’” While such an approach could save Medicare money by driving down the cost of the branded reference biologic, Forys says that it is not clear whether it would be legal under the Biologics Price Competition and Innovation Act to make such a grouping.
What is clear, however, is the fact that there has been little in the way of incentive for biosimilar uptake. “We’re not necessarily seeing payment systems or any type of models being designed yet to encourage the use of these products. So, we’re not seeing reimbursement being completely different for these products, or providers getting a bonus, or any type of quality metric for using biosimilars,” Forys says.
Forys sees a need for a change in perspective in the industry. “There’s a mindset that has to be put in place around biosimilars,” she said, for stakeholders to understand the scale of the investments necessary to develop biosimilar products. In an industry in which the drug development process can take 8 to 10 years and cost between $100 and $200 million, incentives for product uptake could influence a manufacturer’s decision to continue to pursue a biosimilar pipeline as a sustainable part of its business model.
Budget Impact Analysis of Biosimilar Natalizumab in the US
Projected savings from biosimilar natalizumab were $452,611 over 3 years, driven by decreased drug acquisition costs and a utilization shift from reference to biosimilar natalizumab.
Biosimilars in America: Overcoming Barriers and Maximizing Impact
July 21st 2024Join us as we explore the complexities of the US biosimilars market, discussing legislative influences, payer and provider adoption factors, and strategies to overcome industry challenges with expert insights from Kyle Noonan, PharmD, MS, value & access strategy manager at Cencora.
Biosimilars Policy Roundup for April 2024—Podcast Edition
May 5th 2024On this episode of Not So Different, The Center for Biosimilars® glances back at all the major biosimilar policy updates from April, including 2 FDA approvals, 1 European approval, and several insights into possible policy changes from the Festival of Biologics USA conference.
Hesitancy in MENA Nations to Adopt WHO Biosimilar Guidelines Hinders Market Development
July 17th 2024The World Health Organization’s (WHO) new guidelines for biosimilar approvals aim to save time and money for manufacturers in the Middle East and North Africa (MENA), but hesitancy among nations to adopt the guidelines is stifling market development of biosimilars.
BioRationality: Time to Get Rid of PBMs if Biosimilars Are to Succeed
July 15th 2024Sarfaraz K. Niazi, PhD, discusses the challenges with pharmacy benefit managers (PBMs) that plague the biosimilar industry and new legislation that attempts to reform their practices and encourage biosimilar adoption.