On Thursday, November 2, the Centers for Medicare and Medicaid Services (CMS) announced they would reverse a policy determining how providers are paid for administering biosimilar drugs under Medicare Part B. A biosimilar is a type of medication that is “similar” to a biologic reference product, approved by the Food and Drug Administration (FDA); biosimilars offer patients the promise of more affordable treatment options available on the market to address their disease.
Over the past twenty-four months, the Arthritis Foundation and other patient organizations have expressed our collective concerns with CMS’s biosimilars reimbursement policy and encouraged them to reverse it. This policy reversal is a crucial access to care victory for the arthritis community since there are two biosimilars on the market to treat arthritis. The regulatory change will foster competition and lower the cost of expensive biologic treatments, while encouraging innovation of new therapies – ultimately creating a robust marketplace of biosimilars. Read on to learn more about this important win for patients.
Under Medicare, doctors are reimbursed for the medications they purchase and administer to patients. Each medication is assigned a code that correlates to a reimbursement amount. The old CMS policy grouped all biosimilars together with their corresponding biologic under a single payment code. This was the approach that CMS has used to code generic drugs with their reference product. But generic drugs and biosimilar drugs are not the same, and should not be treated as such. Whereas generic drugs are identical to their reference product, biosimilars are “similar” to the biologic reference product, but are unique unto themselves.
By grouping biosimilars together with biologics, as the old policy required, CMS was taking two distinctly different therapies and coding them as equals. This policy discouraged manufacturers to invest the time and money necessary to obtain approval for biosimilars to treat new indications, in turn limiting the potential for biosimilars to treat a larger number of patients with different types of diseases. All in all, the old policy acted as a barrier to accessing this new generation of arthritis drugs for patients.
From the beginning, the Arthritis Foundation actively opposed the old policy and has been committed to achieving this policy reversal. When CMS had initially proposed the old policy, we submitted comments in opposition to vocalize our concern that the policy would be damaging to patient access. We were pleased when CMS decided to revisit the policy earlier this year, and submitted a follow up letter in August, as did many other patient and provider groups.
The Arthritis Foundation didn’t stop there. We set up a meeting with the Office of Management and Budget (OMB) to discuss our position. The OMB reviews proposed regulatory changes and is the largest office within the Executive Office of the President. Together with the American College of Rheumatology, National Psoriasis Foundation, and American Autoimmune and Related Diseases Association, we met with the OMB and reinforced our view that the status quo is inappropriate. We also provided OMB with a concrete example: today, there are two unique biosimilars that treat arthritis under Medicare Part B for the same reference biologic product.
Now that the policy has been reversed, the two biosimilars on the market for the same reference product to treat arthritis will have their own payment code.
This important change will help foster competition and help set the standard for other markets. Competition is critical to bringing down costs and making complex biological products more affordable. It will also promote more innovation as manufacturers strive to create a larger marketplace for biosimilars, and ultimately interchangeable biological products. For the arthritis community, it is critical to implement sound reimbursement policy for biosimilars, and we are thrilled CMS decided to reverse their policy and to see our efforts result in a real victory for our community.
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- Our Position Statement on Interchangeable Biosimilar Substitution
- Victory in New York! Biosimilar Legislation Signed into Law
- Victory for Maryland! Biosimilar Bill Signed by the Governor
- More About Biosimilars