CMS Announces Biosimilars Reimbursement Rule

At the end of October, the Centers for Medicare and Medicaid Services (CMS) issued final rules detailing how it will pay for services provided to Medicare beneficiaries in 2016. One of these rules was for Part B drugs for biosimilar biological products, which will be based on the average sales price of all biosimilar biological products included within the same billing and payment code.

The decision to group all biosimilars together under one payment calculation and billing code, while using a different code for the reference product, has been met with disappointment by some in the healthcare industry because it is feared that the final rule will discourage “investment in biosimilar therapies, making it harder for patients to access these new more affordable products in the United States,” stated Chip Davis, president and CEO of the Generic Pharmaceutical Association (GPhA). “There is no scientific evidence that suggests it would be appropriate to blend all biosimilar products into a single payment calculation independent of the reference product,” added Bert Liang, CEO of Pfenex Inc., and chairman of the Biosimilars Council, a division of GPhA. “While we appreciate CMS’ recognition that it would be premature to issue a rule regarding reimbursement for future interchangeable biosimilars, placing all non-interchangeable products in a single code independent of the reference product is still misguided. Non-interchangeable products are solely compared to the reference product, and not one another, making this arrangement highly unusual.”