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State Action May Block Big Savings on Biosimilars

The recent influx of state legislation on biologics and biosimilars may actually hinder rather than advance the use of biosimilars. Our colleagues Theresa Carnegie, Joanne Hawana, and Ellyn Sternfield discuss this issue in a recent article published in BNA’s Medicare Report. The article examines recent state and federal action affecting substitution and reimbursement of biosimilars. In a previous blog post, we looked at the guidance released by the Centers for Medicare and Medicaid Services on reimbursement of biosimilars under Medicare Parts B and D and Medicaid.

Like generic drugs, many hope biosimilars can help contain growing healthcare costs by providing an equally effective option for patients at a cheaper price. Biosimilars may only be substituted automatically for a reference product if the Food and Drug Administration (FDA) has determined that the biosimilar is “interchangeable” with the reference product. FDA has yet to provide more guidance on interchangeability, and the first and only approved biosimilar did not seek an interchangeability determination. However, states have wasted no time in placing restrictions on the dispensing of interchangeable biosimilars when they do come on the market. As of early June 2015, legislators have filed bills or resolutions in over 31 states on the topic of biosimilars or biologics; 13 states have enacted legislation. Six of these states have passed legislation in the 2015 session alone.

These state laws often impose notification and recordkeeping requirements on pharmacists when making biosimilar substitutions, which could discourage pharmacists from dispensing the cheaper product. For example, Massachusetts law permits a pharmacist to dispense an interchangeable biosimilar for a reference product (unless the prescriber expressly prohibits it), but the law requires the pharmacist to notify both the prescriber and the patient of the substitution.  Additionally, the pharmacist, the prescriber, and the administering health care provider must keep a record of the substitution for at least one year. Without an incentive or requirement to make the substitution, pharmacists may prefer to dispense the reference product as prescribed, instead of dealing with the hassle of complying with such potentially burdensome requirements.

It should be noted that most state action has focused on pharmacists, even though many biosimilars likely will be administered by providers in various health care settings. The laws we have seen to date do not discuss the notice (if any) that providers would have to give patients before administering or infusing a biosimilar in place of a reference product. In any event, payors, pharmacists, and providers all need to keep up with the quickly changing regulatory landscape governing the use of biosimilars.

For the full article, click here.

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