We recently updated our chart that tracks state biosimilar substitution laws to include new laws in Iowa and Montana. These new laws bring the total number of states with biosimilar substitution laws to 27, plus Puerto Rico. The latest version of our chart can be found here. As with the laws we’ve seen before, both the Iowa and Montana biosimilar amendments mirror the state’s existing generic drug substitution laws. More specifically, they amend state pharmacy laws to allow, and in some situations require, the substitution of interchangeable biosimilars. Continue Reading New State Substitution Laws, and a Busy Spring for Biosimilars
On March 30, 2015, CMS released guidance addressing Medicare and Medicaid coverage for biosimilar drug products. The Medicare/Medicaid coverage guidance comes on the heels of the FDA’s landmark approval of a biosimilar version of the reference cancer drug Neupogen. Our colleague Tom Wintner previously wrote about the FDA’s review process for biosimilars, and the expected action on this product.
In its first biosimilar approval, the FDA found that the new product, Zarxio, was in fact a biosimilar to Neupogen and cleared it for use for the same indications as Neupogen. Zarxio’s manufacturer, Sandoz, did not seek, and the FDA did not determine, however, that Zarxio is interchangeable with Neupogen — meaning physicians will have to specifically prescribe the biosimilar; it may not be automatically substituted for the prescribed branded product.
Perhaps taking its cue from the FDA, CMS’s biosimilar guidance documents should be viewed as a first step: historic in some aspects, but at the same time tentative and incomplete.
Medicare Coverage Requirements
The Medicare Part B issuance notifies health care professionals that:
- Medicare Part B reimbursement to health care professionals for approved biosimilars will be based on Average Sales Price (ASP) methodology. Once the manufacturer’s Wholesale Acquisition Price (WAC) is available for the biosimilar, Medicare will pay 106% of the WAC before transitioning to payment based on 100% of the ASP plus 6% of the ASP for the reference product.
- CMS intends to create distinct codes for approved biosimilars to distinguish the biosimilar from the reference product. For the one approved biosimilar, CMS anticipates including a code for it in the coming weeks, retroactive to the FDA approval date.
Importantly, the Part B notice is specific to reimbursement for health care professionals; the materials are silent on Part B reimbursement for hospital outpatient use.