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CMS Finalizes Policy to Facilitate Faster Biosimilar Uptake but Follow-on Policies and Actions Still Needed

The Centers for Medicare & Medicaid Services (CMS) recently released a final rule allowing Medicare Advantage and Part D health plans to reduce the administrative burdens required to encourage biosimilar uptake and enable biosimilar substitution. The rule, while foundational, is a good first step for policies needed to bring financial relief to patients.


Prior to this final rule, policies designed to protect patient access to medications listed at the time of plan enrollment prevented biosimilar uptake. Even with FDA approval and testing to demonstrate no clinically meaningful differences between biosimilars and the original biologic, explicit approval from CMS was needed for Medicare health plans to remove the reference biologic or require biosimilar use. In addition, health plans could only encourage greater biosimilar use (similar to policies used to incentivize generic medications) if the patient had not yet begun biologic treatment or was “treatment naïve.”


Beginning in 2025, these new policies will permit patient savings. In 2023, greater use of biosimilars for one drug alone could have saved up to $6 billion in savings, according to a recent IQVIA report. With the launch of eight FDA-approved biosimilars for the commonly used arthritis medication Humira launched last year, greater access could have reduced patient costs by up to 68%.


Rather than facilitating access, many health plan policies impose additional barriers for patients. Only one in three patients prescribed an adalimumab biosimilar could fill their prescription within 30 days due to prescription blocks, formulary exclusions or prior authorization rejections. Despite the promise, biosimilars only accounted for 2% of all new and 1% of the total adalimumab prescriptions in 2023.


This is not uncommon. Perverse incentives lead health plans and pharmacy benefit managers (PBMs) to favor products with higher list prices and rebates over lower-cost alternatives, prioritizing PBM and plan profits over patient pocketbooks. Starting in 2018, in total, 14 biosimilars were excluded from the formularies of at least one of the three largest PBMs for at least one year. And despite the growing availability of biosimilars, these problems persist in 2024.


Biosimilars are projected to save up to $180 billion over the next five years. Although Medicare plans can more easily provide access and savings for Medicare patients, these policies do not extend to the millions of Americans with employer- or market-based insurance.


Additional policies are urgently needed to facilitate faster access for all patients. While a foundational step, CMS regulations must not be the final action. Regulators and Congress must undertake similar actions to facilitate biosimilar and patient financial savings. It’s the best way to facilitate biosimilar uptake – and help lower costs for patients.

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