The Story: On October 30, the Centers for Medicare & Medicaid Services (CMS) released the final version of the Physician Fee Schedule rule, the first since Congress replaced the Sustainable Growth Rate formula.

The rule addresses a number of changes to the physician fee schedule and other Medicare Part B payment policies, including policies for Medicare Part B payment for biosimilar medications.

The Specifics

The final rule’s policy on biosimilars, which will take effect on January 1, 2016, is notable because CMS decided to stand by its earlier proposal that payment amounts for biosimilar products will be based on the average sales price (ASP) of all biosimilar products included within the same billing and payment code, as opposed to determining a specific reimbursement rate for each biosimilar product. CMS did note in the final rule that it does not have the authority to include the reference product in the calculation of the reimbursement amount.

The Background

In September, NACDS submitted comments to CMS expressing concerns with the plan to use a single ASP payment limit for biosimilar products. At the time, NACDS strongly discouraged CMS from implementing a reimbursement policy until the Food and Drug Administration issues final guidance on biosimilars and interchangeability.

The Upshot

In discussing the role of interchangeable products and pricing policy, CMS stated that the final rule does not address whether a product’s interchangeability status should be the basis for a different approach to Part B payment, and that the agency would preserve their discretion to consider whether further refinements to the biosimilar payment policy may be necessary as the market develops. NACDS will keep members apprised on ongoing efforts with stakeholders on biosimilar products and their impact on the retail pharmacy industry.