The Underwater Biosimilars Coalition, co-led by the ACR and Coalition of State Rheumatology Organizations (CSRO), recently took another significant step toward its goal of improving patient access to “underwater” biosimilars, those reimbursed at rates below acquisition cost.
Building off its Sept. 26 educational meeting with the Medicare Payment Advisory Commission (MedPAC), the Coalition convened a meeting with the Centers for Medicare & Medicaid Services (CMS) to share concerns and discuss potential options for addressing the challenges stemming from the Medicare and health plan payments under the average sales price (ASP) methodology.
As many rheumatologists know, in 2005, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 changed how physicians are reimbursed for Part B drugs and biologics from an average wholesale price approach to the ASP methodology, along with a 6% “add on.” In 2022, the Inflation Reduction Act increased the add-on amount to 8% for certain biosimilars.
To recoup their investment and ensure patients can access their products, drug manufacturers offer substantial rebates to insurers and pharmacy benefit managers (PBMs) for favorable placement on drug formularies. Because ASP represents the volume-weighted average sales price less any “price concessions,” these manufacturer rebates artificially lower the ASP. As a result, for many biosimilars, the ASP is significantly lower than providers’ acquisition cost. With providers unable to offer these drugs without risking the financial stability of their practices, these “lower cost” drugs end up out of reach for patients.
“Many of my arthritis patients need infusible biologics. But I can no longer afford to infuse biosimilars while running a small, rural practice in Kentucky that operates on thin margins,” said Chris Phillips, MD, chair of the ACR’s Committee on Rheumatologic Care.
Although a permanent fix to the current payment methodology can only be accomplished legislatively, the Coalition urged the CMS to consider all available authorities and to work with lawmakers where necessary. CMS leadership expressed a willingness to conduct more in-depth analyses of claims data and to work more closely with the Coalition and Congress.
Next Step: Congress
The meetings with MedPAC and the CMS have given the Coalition additional insight as we discuss this issue and possible solutions with Congressional leadership and committees of jurisdiction.
“We have done a good job ensuring this is on the radar of MedPAC and the CMS. Now the real battle begins,” says Madelaine Feldman, MD, CSRO’s Vice President for Advocacy and Government Affairs.
