US govt addressing Medicare payments for biosimilars

The US Department of Health and Human Services (HHS) said yesterday that it is implementing Medicare Part B payment changes for certain biosimilars, one of the first Medicare provisions of the Inflation Reduction Act to go into effect.

In accordance with section 11403 of the Inflation Reduction Act, the Centers for Medicare & Medicaid Services (CMS) is implementing a temporary increase in payment under Medicare for qualifying biosimilars. The new law provides for a temporary increase in the add-on payment for qualifying biosimilars whose average sales price (ASP) is not more than the price of the associated reference biological product. This provision encourages the creation and utilization of biosimilars to compete with original biologic products and incentivizes innovation for less costly access to these important therapies in the USA.

Medicare payment for certain biosimilar biological products is required to be the average sales price (ASP) plus 8% (rather than 6%) of the ASP of the reference biological for a five year period defined in the statute. For existing qualifying biosimilar biological products for which payment was made using ASP as of September 30, 2022, the applicable five-year period begins on October 1, 2022. For new qualifying biosimilar biological products for which payment is first made using ASP between October 1, 2022 through December 31, 2027, the applicable five-year period begins the first day of the calendar quarter of such payment. A qualifying biosimilar biological product is defined as a biosimilar with an ASP that is not more than the ASP of the reference biological.