Policy can help New Hampshire rein in Medicare costs
New HampshireÃÂ residentsÃÂ sufferingÃÂ from painful and chronic medical conditionsÃÂ stand toÃÂ benefit from aÃÂ federal rule changeÃÂ this yearÃÂ thatÃÂ wouldÃÂ offerÃÂ greater access to treatment forÃÂ Medicare patientsÃÂ suffering fromÃÂ cancer, diabetes and autoimmune diseases.ÃÂ The newÃÂ policy, which will openÃÂ up the market for a type of medicationÃÂ known as biosimilars,ÃÂ couldÃÂ increase patient accessÃÂ toÃÂ lifesavingÃÂ careÃÂ forÃÂ one of the largest Medicare beneficiary populations in the country.ÃÂ ÃÂ
For years, the Centers for Medicare & Medicaid Services maintained a billing policy that undermined the emergence of a robust biosimilars marketplace inÃÂ New HampshireÃÂ and around the country. Biosimilars are highly similar versions of “biologic” drugs; both areÃÂ made from living cells rather than through chemical synthesis, which is how conventional drug medications are made.ÃÂ However, despite clear differencesÃÂ amongÃÂ unique biosimilars for a given reference biologic,ÃÂ CMS applied a broad, one-size-fits-all approach to their reimbursement.ÃÂ ÃÂ
This sweeping CMS policy prevented the healthcare system from fully realizing the benefits of biosimilars.ÃÂ Because they are highly specialized treatments,ÃÂ biologics can be extremely expensive to produce,ÃÂ a cost that is passed on to the consumer and to the healthcare system at large.ÃÂ AlthoughÃÂ only two percent of the U.S. population uses biologics, these drugs account for 40 percent of prescription-drug spending nationwideÃÂ due to their highÃÂ research andÃÂ development costs.ÃÂ ÃÂ ÃÂ ÃÂ
In contrast, biosimilars, whichÃÂ are only approvedÃÂ ifÃÂ the U.S. Food and DrugÃÂ AdministrationÃÂ establishes they areÃÂ asÃÂ safe and effectiveÃÂ as their reference biologic,ÃÂ cost producers far less in research and developmentÃÂ thanÃÂ theirÃÂ approved biologic reference products.ÃÂ That meansÃÂ significantÃÂ savingsÃÂ -ÃÂ an estimatedÃÂ 20 to 30 percent lessÃÂ -ÃÂ which can be passedÃÂ throughout the healthcare system.ÃÂ It isÃÂ estimatedÃÂ that biosimilars will reduce biologic drug spending by at leastÃÂ $54 billionÃÂ by 2024.ÃÂ ÃÂ
However, a major victory for patients was achievedÃÂ after more than 200 organizations representing patients, providers and other stakeholdersÃÂ called on CMSÃÂ in SeptemberÃÂ to assign separate payment codes for each biosimilar drug, the agency changed the policy.ÃÂ Each biosimilarÃÂ nowÃÂ has a unique billing code, which will lead to increased competition among producers and most importantly, greater choice and affordability for patients.ÃÂ ÃÂ
According to theÃÂ Biosimilars Forum, the new rule could reduce Medicare costs by $65 billion over the next 10 years. The new rule is expected to lead to savings ofÃÂ 30 percentÃÂ moreÃÂ than would have been the case under the old rule.ÃÂ ForÃÂ New Hampshire, where more thanÃÂ 266,000ÃÂ residents depend on Medicare to pay for their prescription treatments, a more competitive biosimilars marketÃÂ could bring much-needed relief to patientsÃÂ – particularly valuable in a year whenÃÂ premiumsÃÂ are expected toÃÂ riseÃÂ byÃÂ as much asÃÂ 43 percent.ÃÂ Currently,ÃÂ New HampshireÃÂ spendsÃÂ nearlyÃÂ $9,500ÃÂ perÃÂ MedicareÃÂ enrollee, costing the state more thanÃÂ $2.4ÃÂ millionÃÂ each year.ÃÂ
With CMS’ rule change in effect, biosimilars have the potential to play a central role in enabling Medicare and theÃÂ entire AmericanÃÂ healthcare system to achieve significant savings over the next decade and beyond.ÃÂ InÃÂ Europe, Australia and South Korea, whereÃÂ biosimilars have been widely prescribed for more than a decade,ÃÂ patients suffering from a range of painful and chronic conditions benefit from these safe and effective drugs every day.ÃÂ
The FDAÃÂ already has approvedÃÂ nineÃÂ biosimilars,ÃÂ andÃÂ dozensÃÂ moreÃÂ areÃÂ in the development pipeline.ÃÂ With theÃÂ new federal policy layingÃÂ the foundation forÃÂ a cost-effectiveÃÂ and sustainable biosimilars market,ÃÂ New HampshireÃÂ might be able toÃÂ contain its unsustainable health care spending. Most importantly, though,ÃÂ theÃÂ nearlyÃÂ 160,000 residentsÃÂ inÃÂ New HampshireÃÂ with MedicareÃÂ prescriptionÃÂ drugÃÂ plansÃÂ are likely to see increased access to more affordable options to treat painful andÃÂ long-term ailments.ÃÂ This is a good thing forÃÂ patients in New HampshireÃÂ – and for the future of the health ofÃÂ theÃÂ state.ÃÂ ÃÂ ÃÂ
Juliana M.ÃÂ ReedÃÂ is President of the Biosimilars Forum.ÃÂ