Wyden Statement on CMS Decision on Biosimilar Drug Payment Rule

Senate Finance Committee Ranking Member Ron Wyden, D-Ore., today issued a statement following an announcement from the Centers for Medicare & Medicaid Services (CMS) regarding how it will pay for biosimilar biological products:

“Today’s decision will foster a competitive market for biosimilar drugs that focuses on value, which is what Americans expect. I applaud CMS for moving forward on their proposal.”

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 manufacturers that produce lower-cost products will be more successful in securing greater market share than manufacturers that produce higher-priced drugs, as they directly compete against one another.

Last month, Wyden sent a letter to CMS offering support for the proposed rule. That letter can be found here.

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