Amanda Forys on How Medicare Will Refine Its Biosimilar Policy

Amanda Forys, MSPH, director of Xcenda’s Reimbursement Policy Insights consulting team discusses how Medicare will address and possibly change its biosimilar policies as the FDA offers more guidance and as biosimilars become more prevalent in the market.

Transcript (slightly modified)

How do you think Medicare may refine its biosimilars policy as the FDA releases more guidance and more biosimilars reach the market?

FDA guidance could affect a little bit of what Medicare is doing. I think that the FDA and CMS are going to have some lessons learned moving forward, but I also think there’s a lot of other really big issues coming up around the Medicare program in general, that could affect biosimilars and could affect all products. A couple of those things that I think are going to be hot-button issues, I’ll start with just biosimilars in general.

Right now, with a biosimilar, the originator product has its own billing code and all biosimilars to that originator product are grouped together into a billing code. In the industry, a lot of members of different biosimilar forums and other councils for biosimilars have not been interested in keeping it that way and have been working very hard to ask that they each get their own code. They’re saying that these are products that are each unique, they are not biosimilar to one another, so grouping them together is quite confusing for providers and was not necessarily the intent of the BPCIA [Biologics Price Competition and Innovation Act] when that legislation was passed. There is a lot of tension there with CMS and people asking for them to split the codes up.

Then you have MedPAC coming in and they are saying we want to simplify the whole system and what we’d like to do is we’d like to see the originator product and the biosimilar grouped together and share a code. When that happens, you are going to see the price of that originator product drop substantially and that will really save the Medicare program money. While, in theory, yes that probably could save money, the intent of the BPCIA isn’t necessarily clear, and that may not be possible, it might not be something you can do legally, by grouping those products together with the way the biosimilar is defined. That’s going to be something that has to be ironed out and you may see some guidance as interchangeables come to the market and the FDA irons out interchangeables you might see them say, how are we going to treat that? Are we going to give that its own code, its own separate billing code? Are they going to be grouped with all of the other biosimilars? Will they even share a code with the originator product because they are an interchangeable? We just don’t know yet. That is something that could be a concern or an issue for biosimilar manufacturers. It’s just really ironing out payment.

Also, to see some of the other pressures to control drug prices, that’s a huge hot topic right now on the Hill. Are you going to see CMS suing significant things to change the average sales price base payment methodology that they have for Medicare Part B drugs. Could that happen and, if so, how will that affect the market? I think you’ve got what’s happening in general and then how will that affect biosimilars, just as much as how is the biosimilars market going to change. On the Part D side, we are definitely going to need to see more clarification on if a biosimilar can be considered a brand, that is something that manufacturers are looking for and asking for that clarification so that they can offer that 50% rebate in the coverage gap for patients. So, that is something that will be defined, I think, more and more. MedPAC has recommended that be put in place, so we will see if that actually happens in the future.