September 28,2015

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Taylor Harvey: 202-224-4515

Wyden Offers Support for Proposed Biosimilar Drug Payment Rule from CMS

WASHINGTON - Senate Finance Committee Ranking Member Ron Wyden, D-Ore., today sent a letter to the Centers for Medicare and Medicaid Services (CMS) offering support for their proposed rule on paying for biosimilar biological products (biosimilars):

“Biosimilar products should compete with one another – rather than set their own price – to ensure patients have access to affordable and high-quality drugs,” Wyden said.

The Affordable Care Act (ACA) created a regulatory pathway for the Food and Drug Administration (FDA) to approve biological drugs that are determined to be “biosimilar” to, or “interchangeable” with, an FDA-licensed biological product. The ACA also contains a provision outlining a payment methodology for these products. 

To implement this provision, CMS proposes to maintain a separate code for the reference biologic product and group the biosimilar products associated with that biologic into a single code.  Each biosimilar associated with a single reference biologic drug will be paid based on the average sales price for all of the biosimilars in the code.

CMS’s proposal seeks to create a competitive environment amongst therapeutically equivalent products, which will have a real-time effect of driving down costs for patients and payers alike.  With this proposal, biosimilar manufactures that produce lower-cost products will be more successful in securing greater market share than manufactures that produce higher-priced drugs, as they directly compete against one another. 

The full letter can be found here.