Biosimilars Are Generally Treated as Single Source Drugs -

On March 30, 2015, in the wake of the first biosimilar product licensed by the Food and Drug Administration (FDA), the Centers for Medicare & Medicaid Services (CMS) issued several guidance documents addressing the treatment of biosimilar products under Medicare Part B, Medicare Part D and the Medicaid Drug Rebate Program. Generally, because biosimilar products do not meet the definitions of “generic” or “multiple source” drugs under either the Medicare or Medicaid programs, in part, because biosimilars are approved via a biological license application (“BLA”), CMS will treat the products as single source drugs for rebating and reimbursement purposes. This subjects biosimilars to separate coding, higher copayments for beneficiaries, and higher Medicaid rebate obligations for manufacturers than if they had been characterized as noninnovator products. FDA has yet to designate any biosimilar products as “interchangeable,” however, and although CMS’s position regarding the Medicaid Drug Rebate Program is broadly applicable to all biosimilars, it remains unclear whether CMS will treat all biosimilars equally under the Medicare program. CMS has committed to issuing additional guidance regarding Medicare reimbursement of interchangeable products in the future.

Background -

The Patient Protection and Affordable Care Act (“ACA”) amended section 351 of the Public Health Service Act (“PHSA”) to create a new abbreviated licensure pathway for follow-on biological products that are demonstrated to be “biosimilar” to or “interchangeable” with a “reference” biological product licensed by FDA. A biosimilar product is one that is highly similar to the reference product, and has no clinically meaningful differences in terms of safety, purity and potency from the reference product. If the FDA also designates the biosimilar as “interchangeable” with the reference product, then the biosimilar may be substituted for the reference product by a pharmacist without the intervention of the health care provider who prescribed the reference product.