5 reasons to be concerned over proposed Medicare rule on biosimilar coding

A Medicare reimbursement policy proposing that multiple biosimilars have the same pricing J-code for Medicare reimbursement purposes could ultimately result in fewer treatment options, according to a group representing the industry.

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As currently proposed in the 2016 Medicare Physician Fee Schedule rule, multiple biosimilars for the same reference product would be grouped and issued the same J-code for Medicare reimbursement purposes.

The Biosimilars Forum supported House Energy and Commerce Committee members Reps. Joe Barton (R-Texas) and Anna Eshoo (D-Calf.), as well as a delegation of 33 House members, for sending a

to Andrew Slavitt, acting administrator for the Centers for Medicare & Medicaid Services (CMS), regarding the provisions relating to biosimilar reimbursement in the CMS's 2016 Medicare Physician Fee Schedule proposed rule.

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“The ACA [Affordable Care Act] created a clear methodology for the payment amount for the first biosimilar with respect to a given reference product-CMS is to pay the sum of the ASP of the biosimilar and 6% of the ASP of the reference product,” according to Michael Werner, Biosimilars Forum policy advisor.

“Every biosimilar should have its own unique J code and its own reimbursement. Per ACA and FDA guidance, biosimilars products are unique from each other as biosimilars and unique from the reference product,” Werner says. “If implemented, this proposal could result in fewer biosimilars being introduced in the United States and ultimately in fewer treatment options for healthcare professionals and patients, as potential biosimilars manufacturers will not be able to plan and invest in biosimilar development programs when the potential marketplace the CMS proposed does not align with ACA or the FDA guidance on biosimilars.”

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According to Werner, a scenario for payment that blends biosimilars into the same payment group/ASP would be very detrimental to the adoption of biosimilars for several reasons:

#1. Patient safety.

In order to ensure that the prescribed physician-administered biologics are given to patients, CMS should adopt a coding policy that is aligned with the FDA approval pathway, each biosimilar and the reference biologic, require their own J Code.  

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“The law, legislative history and biosimilar science support the requirement that CMS assign each biosimilar biological product a unique Healthcare Common Procedure Coding System [HCPCS] code and not consider biologics and biosimilars in the same fashion as generic drugs,” he says. “Issuing unique HCPCS codes to each individual biosimilar is essential to facilitate accurate attribution of adverse events.”

#2. Provider confusion.

If multiple biosimilars to the same reference product share the same HCPCS codes, providers may be confused as to what appropriate code to use and may not be confident that they will receive appropriate payment for the product (biosimilar or reference) they prescribe and administer which could be a disincentive due to confusion or concern for payment.

#3. Not in step with FDA.

“FDA guidance clearly states that biosimilars are unique from each other and from their reference product. CMS proposed rule fails to align with FDA,” Werner says.

#4. Discourages biosimilar development.

“Failure to recognize the uniqueness of each biosimilar in the post-approval marketplace creates market uncertainty for biosimilar developers,” Werner says. “The high-cost, lengthy development pathway for biosimilars makes this a high risk investment. High market uncertainty and failure to recognize biosimilars in the post-approval world the same way FDA can potentially approve the biosimilar will dampen the enthusiasm to invest in these products. Fewer biosimilars will come to market in the United States. 

#5. Difficult for MACs and other payers to write coverage policies.

“Medicare Administrative Contractors [MACs] would not be able to write coverage policies that limit use of each particular biosimilar to certain indications,” Werner says. “[They] would find it extremely difficult to write coverage policies describing when use of a particular biosimilar is clinically appropriate.