Biosimilar makers slam proposed Medicare/Medicaid billing code changes

Yesterday, the Centers for Medicare & Medicaid Services (CMS) announced proposed changes to payment policies in the Medicare Physician Fee Schedule for 2016, including an update to regulations focused on biosimilars as set out in the 2010 Affordable Care Act (ACA).

The update would ensure the payment amount for a billing code that describes a biosimilar “is based on the average sales price (ASP) of all biosimilar biological products that reference a common biological product’s license application,” as of January 2016, the proposed policy states.

Essentially this would mean all biosimilars of the same reference biologic would be issued the same J-code* for Medicare reimbursement purposes, a proposal which would “lead to confusion,” according to The Biosimilars Forum, an advocacy group representing the major biosimilar developers.

“The biosimilars statute, and its legislative history, make clear that each biosimilar product - including multiple biosimilar products associated with the same originally marketed product - should be assigned a unique HCPCS [CMS Healthcare Common Procedure Coding System] code,” said the Forum’s policy advisor Michael Werner.

He added “this is crucial toward establishing and maintaining a vibrant biosimilars market in the US,” warning that if this policy is finalised, it could his reduce investment in development of such products.

The Group is set to respond to this proposal by September 8, the deadline for public comment.

Created earlier this year, the Forum – which includes such companies as Amgen, Hospira, Pfizer and Sandoz as its members – has previously criticised the biosimilar payment policies suggested by the CMS.

In May, the Group called for each biosimilar to “be reimbursed based on their own ASP (Average Sales Price) and receive a unique J-code,” after CMS announced that Part B payments for newly-approved biosimilars will be 106% of the manufacturer’s wholesale acquisition cost, for the product, and then once the ASP is available, the payment will be 100% of the biosimilar’s ASP plus 6% of the ASP of the reference product.

* US medicinal products covered by Medicare have a code relating to billing and reimbursement for Managed Care Organizations (MCO's), Third Party payors, Healthcare Professionals, Consultants and Hospitals. J-Codes relate specifically to injectable drugs that ordinarily cannot be self-administered, such as chemotherapy, immunosuppressive drugs and inhalation solutions.