When the FDA approves a generic drug, it’s based on the chemicals contained in the original brand medication. Congress recently enacted a similar process for the approval of “biosimilars” based on the original biologic medication.  The main difference is that the “biosimilar” is approved based on its development process. Biosimilars have the potential to be a cheaper alternative for expensive biologic medications such as Epogen, a drug used for anemia management.

A letter sent from the House of Representatives to the Centers for Medicaid and Medicare Services (CMS) calls attention to a biosimilar reimbursement proposal in CMS’s 2016 Medicare Physician Fee Schedule proposed rule. CMS is suggesting that it plans to place biosimilars in the same reimbursement category as generic pharmaceuticals, despite the difference in how they are manufactured and approved by the FDA. The authors of the letter argue that biosimilars should have their own reimbursement categories.

As companies continue to develop biosimilar medications, DPC will continue to monitor the situation to ensure the Administration focuses on patient access, safety and quality of care.