ACR urges congressional leaders to reform ‘underwater’ biosimilar reimbursement
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The American College of Rheumatology has joined a coalition of more than 40 other organizations calling on congressional leaders to address what they see as insufficient Medicare reimbursements for biosimilars.
The group, which also includes the Arthritis Foundation and dozens of state and local rheumatology organizations, have dubbed themselves the Underwater Biosimilars Coalition. On Nov. 30, the coalition sent a letter to leaders in both the U.S. House of Representatives and the Senate expressing “grave concerns” about providers being reimbursed for less than they spend to administer some biosimilars in outpatient facilities under Medicare Part B, leaving them “underwater.”
“The current reimbursement rates leave providers with terrible options: administer drugs at a significant financial loss, transfer patients to alternative treatment locations like a hospital, or switch a patient’s treatment plan altogether, even if it may not be the best care option for them,” Chris Phillips, MD, chair of the ACR’s committee on rheumatologic care, said in a press release from ACR.
“Each of these ultimately brings more financial costs to the health care system and can have serious adverse effects on patient outcomes,” he added. “It’s time for lawmakers to address the discrepancy between Medicare reimbursement and treatment costs to ensure patients can access these needed and transformative medications in a comfortable, convenient and cost-effective setting.”
According to the ACR, biosimilar reimbursements are determined by “average sales price” methodology, which is artificially lowered because it includes rebates from manufacturers to insurers and pharmacy benefit managers.
“As a result, providers are reimbursed less than their expenditures on these medications, leaving them ‘underwater,’” read the ACR release.
CMS has indicated in meetings with the Underwater Biosimilars Coalition that it lacks authority to improve the reimbursements, according to the coalition letter sent to Congress.
The coalition proposed several amendments to the Social Security Act that could potentially address the issue, including:
- providing 8% add-on payments to providers’ acquisition costs on all biosimilar products;
- empowering the Secretary to use wholesale acquisition cost + 3% until the Secretary determines the average sales price is sustainable; and
- permanently removing manufacturer rebates from the average sales price for biosimilars.
The full letter from the Underwater Biosimilars Coalition, as well as a full list of its 47 member organizations, can be read here. The coalition is co-led by the ACR and the Coalition of State Rheumatology Organizations.
References:
ACR-led coalition on underwater biosimilars grows, charts next steps. https://www.the-rheumatologist.org/article/acr-led-coalition-on-underwater-biosimilars-grows-charts-next-steps/. Published Aug. 5, 2024. Accessed Dec. 3, 2024.
After coalition meeting, CMS leadership agrees to closer look at underwater biosimilars. https://www.the-rheumatologist.org/article/after-meeting-with-acr-led-coalition-cms-leadership-agrees-to-closer-look-at-underwater-biosimilars/. Published Oct. 21, 2024. Accessed Dec. 3, 2024.
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