AAM-commissioned report: Biosimilars can save CMS $11.4B by 2027
WASHINGTON — A new report from the Moran Co. for the Association for Accessible Medicines and its Biosimilars Council is projecting big savings to the federal government from biosimilars in the next 10 years. But the estimated $11.4 billion in savings would require the Centers for Medicare and Medicaid Services to revise the way it currently reimburses for biosimilar drugs.
Currently, CMS groups all biosimilars of a reference product under one billing code and payment rate. Such organizations as the National Association of Chain Drug Stores, CVS Health, Express Scripts and the Pharmaceutical Care Management Association, among others, recently wrote to CMS administrator Seema Verma calling on a change to the policy earlier this month.
The introduction of biosimilars in the EU market has led to a substantial and immediate reduction in the average price for the biosimilar and originator products,” the letter said. “A sustainable and robust biosimilars market, such as the EU market, is built upon creating incentives for manufacturers to continue to develop lower cost alternatives to costly originator biologics, like expanded patient volume and access. Separate codes for non-interchangeable biosimilars help stimulate future competitors to the market.”
The Moran Co. report highlights that while the current policy would create short-term savings, they come at the expense of more savings in the long-term, potentially leading biosimilars manufacturers to exit the market over time or not enter it at all.
“Shifting biosimilar reimbursement to unique codes increases patient access to more affordable, life-saving medicine and lowers prescription drug spending,” Biosimilars Council executive director and AAM SVP policy and strategic alliances Christine Simmon said. “This policy is critical to the development of a thriving biosimilars medicine market. This new report highlights the significant cost savings possible for both patients and payers if CMS implements this recommendation.”