CMS Final Rule Lowers Maximum Co-Payment Amount for Biosimilars

CMS has released its final rule for the Medicare program for the contract year 2019, and it includes a key change to its approach to biosimilars.

In the rule, CMS said that it would lower the maximum co-payment amount for low-income subsidy (LIS) beneficiaries for biosimilar and interchangeable biosimilars to match the lower co-pay amount required for generic and preferred multiple-source drugs.

This rule represents a change from CMS’ previous proposal to include biosimilars and interchangeable biosimilars under a revised definition of “generic drugs” for the purposes LIS beneficiaries’ cost sharing. The rule indicates that CMS was concerned that misinterpretations of a revised definition of generics could create confusion about the broader treatment of biosimilar products and interchangeable biosimilars. Under the final rule, “CMS achieves the same goal intended by our original proposal, but now does so without the confusion that would result from defining biosimilar and interchangeable biological products as generic drugs for this limited purpose,” reads the rule.

CMS was careful to point out that its change of approach only applies to cost sharing, and “This policy does not change or supersede our existing formulary requirements for biosimilar biological products.”

However, CMS noted that it “does not have the flexibility” to establish a lower co-pay amount for biosimilars and interchangeable biosimilars for non-LIS enrollees who are in the catastrophic phase of the Medicare Part D benefit, however, and “given the high cost of biological products in general, the non-LIS catastrophic cost sharing will almost certainly be [5%].”

According to CMS, this new policy will reduce spending by approximately $10 million (and that the overall provisions of the final rule will save $123.6 million). It also noted that its approach to biosimilars will “reduce confusion in the marketplace surrounding this issue, [and] will improve enrollee protections while also improving enrollee incentives to choose biosimilar and interchangeable biological products over reference biological products.”

Finally, in response to comments urging CMS to revisit treatment of biosimilars and interchangeable biologics for the purpose of mid-year formulary changes, CMS clarified the fact that, as yet, there are no interchangeable biosimilars approved in the United States, and that, when “interchangeable biological products become available, we would consider whether additional regulatory changes would be warranted.”