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12:00 AM
Apr 13, 2015
 |  BioCentury  |  Regulation

Interchangeable overhang

How CMS biosimilars reimbursement policy will affect uptake

CMS's new policy for reimbursement of biosimilars for Medicare Part D drugs won't be a de facto path to interchangeability. But it could make the debate over interchangeability irrelevant because it will allow payers and pharmacy benefit managers to use familiar tools like excluded drugs lists to kick the reference drug off formularies if it means getting a better deal on the biosimilar.

On March 31, CMS issued biosimilar reimbursement coverage memos to plan sponsors outlining its requirements for Medicare parts B and D drugs as well as for state Medicaid agencies. The guidance came three weeks after FDA approved the first biosimilar, Zarxio filgrastim-sndz from the Sandoz unit of Novartis AG.

Zarxio is a physician-administered drug, with the majority of prescriptions reimbursed via Medicare Part B. In cases where the biosimilar of human G-CSF is administered in a nursing home or intermediate care facility it would be reimbursed under Part D.

CMS's memo on Part B drugs affirmed what had already been outlined in the Affordable Care Act - physicians will be reimbursed the average sales price (ASP) for the biosimilar plus 6% of the ASP for the reference drug. This removes the incentive for physicians to prescribe the higher-priced reference drug.

Similarly, the Medicaid document had few surprises, with biosimilars subject to the minimum 23% discount mandated for branded drugs.

The most anticipated guidance was for pharmacy-dispensed Part D drugs, where CMS had yet to reveal many clues about how much leeway it would give plan sponsors to use biosimilars to control costs.

In the document, the agency outlined a path by which sponsors can exclude the reference product in favor of the cheaper biosimilar as long as patients currently taking the reference drug have access to a "transition" supply before switching. At the same time, CMS explicitly said biosimilars are not considered interchangeable with the reference product.

Interchangeability would allow a pharmacist to substitute a biosimilar for the reference drug without the consent of a physician in cases where the reference drug was prescribed.

Two consultants and an attorney who specialize...

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