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HHS announces 2% payment lift on biosimilars

Per the terms of the Inflation Reduction Act (IRA) signed into law Aug, 16, the payment for biosimilar drugs under Part B average sales price (ASP) reimbursement ticks up from 106% – the cost of the biosimilar plus a 6% provider reimbursement – to 108% starting this month.

The increases are temporary, lasting either two years or five depending on when they were qualified for payment, according to an October 3 announcement from HHS Secretary Xavier Becerra and CMS Administrator Chiquita Brooks-LaSure.

“For existing qualifying biosimilars for which payment was made using ASP as of September 30, 2022, the 5-year period begins on October 1, 2022," the announcement says. "For new qualifying biosimilars for which payment is first made using ASP between October 1, 2022, and December 31, 2027, the applicable 5-year period begins on the first day of the calendar quarter during which such payment is made.”

This is in accordance with Sec. 11403 of the IRA, “Temporary Increase in Medicare Part B Payment for Certain Biosimilar Biological Products,” amending §1395w–3a of U.S. Code.

A biosimilar is defined in law as a “biological product approved under an abbreviated application for a license of a biological product that relies in part on data or information in an application for another biological product.” For example, there are several biosimilars to Trastuzumab (Herceptin), including Trastuzumab-anns and Trastuzumab-dkst, which can in some cases be used in its place. Some analysts believe biosimilars can substantially contain Medicare drug costs. 

“The goal of the temporary add-on payment for providers is to increase access to biosimilars, as well as to encourage competition between biosimilars and reference biological products, which may, over time, lower drug costs and lead to savings to beneficiaries and Medicare,” the joint release says.

Fourth-quarter prices for Part B drugs and biosimilars are posted here.
Blog Tags: CMS, HHS
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