· Payment for Biosimilar Biological Products -- Effective today a provision from the Affordable Care Act, Section 3139, allowing a Medicare Part B biosimilar product that has been approved by the Food and Drug Administration (FDA) to be reimbursed at the average sales price (ASP) of the biosimilar plus 6% of the ASP of the reference product (the licensed biological product that is referred to in the application for the biosimilar product).
A biosimilar, often called a “follow-on” biologic, is similar to a brand-name biologic while a generic drug is the same as a brand-name chemical drug. A biologic is a preparation, such as a drug or a vaccine, that is made from living organisms. Most biologics are complex proteins that require special handling (such as refrigeration) and are usually administered to patients via injection or infused directly into the bloodstream. In many cases, current technology will not allow complete characterization of biological products. CBO has estimated savings from this provision to be approximately $100 million for FY2010-FY2014 and $7.1 billion for FY2010-FY2019.
The Affordable Care Act also amends the Public Health Service Act (PHS Act) in Section 7002 to create an abbreviated approval pathway for biological products that are demonstrated to be “highly similar” (biosimilar) to or “interchangeable” with an FDA-approved biological product. The FDA has formed a Biosimilar Implementation Committee (BIC) and two review committees have been chartered to ensure the process of review and evaluation will be implemented in a sound manor. Reference or branded products will retain 12 years of data exclusivity in which time generic companies are prohibited from using to data to gain approval for a biosimilar.
Thanks to the National Conference of State Legislatures for this information!
