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Lawmakers tell CMS to get on board with biosimilar reimbursement

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By Mari Serebrov
Regulatory Editor

U.S. lawmakers are asking the Centers for Medicare & Medicaid Services (CMS) to follow the law in how it reimburses for biosimilars by reversing a policy, adopted under the Obama administration, that lumps biosimilars under one Part B payment code while giving the reference biologic a unique code.

Citing the statutory provisions establishing the U.S. biosimilar path, a bipartisan group of 52 House members pointed out that the law specifies reimbursement for biosimilars to be calculated separately. Thus, each biosimilar must have its own Healthcare Common Procedure Coding System (HCPCS) code, the group said.

"This language reflects congressional intent to encourage a vibrant biosimilars market," the lawmakers said in a letter to CMS Administrator Seema Verma and Health and Human Services Secretary Tom Price. A similar letter from nine Republican senators last week reminded the officials that the CMS policy was finalized over the objection of 20 senators and 33 House members, as well as a host of doctors, patients and industry groups.

The controversial CMS policy, which went into effect last year as part of the 2016 Physician Fee Schedule, bases the Medicare payment for each biosimilar on the average sales price and market share of all the biosimilars within an HCPCS code, plus 6 percent of the covered price of the reference product.

In a practical sense, the CMS policy has had no impact on biosimilar reimbursement – yet. With only two biosimilars on the U.S. market referencing different biologics, they each had an HCPCS code to themselves.

That will end when Merck & Co. Inc., of Kenilworth, N.J., launches the second infliximab biosimilar in the U.S. – Samsung Bioepis Co. Ltd.'s Renflexis. Approved by the FDA last month, Renflexis will compete with Inflectra, a biosimilar launched last year by New York-based Pfizer Inc., as well as the reference biologic, Remicade (infliximab, Janssen Biotech Inc.). (See BioWorld Today, Oct. 19, 2016, and April 25, 2017.)

"With the approval of two biosimilars that share the same reference product, it is now more pressing than ever to address this reimbursement issue," said Biosimilars Forum President Stacie Phan.

Like several other groups, the Biosimilars Forum urged CMS to use a separate payment code for each biosimilar before it finalized its policy. The industry group warned that the coverage plan could dampen the infant biosimilars market, leading to confusion with respect to proper product use and reducing investment in the development of the follow-ons. (See BioWorld Today, Nov. 3, 2015.)

CMS refused to listen. And while the FDA and Congress took great pains to distinguish between generics and biosimilars, CMS admittedly modeled its biosimilar coverage on its generic drug policy. "Because of the degree of similarity that biosimilars share with their reference products, we believe it is appropriate to price biosimilar products in groups in a manner similar to how we price multiple-source or generic drugs," the agency said when it finalized the rule, noting that generics are "biosimilars' closest analogues."

The Biosimilars Forum issued a statement Friday applauding the current congressional effort to get CMS to correct its policy to reflect the biosimilar payment and coding requirements of the 2010 Biologic Price Competition and Innovation Act.

The organization added its own voice to the effort. "We urge CMS to reverse its rule for Part B to better reflect the law and to support this new industry by giving each biosimilar of the same reference product its own unique Medicare claims code and payment amount," Phan said.