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Physician Groups Express Concerns to Congress on CMS Biosimilar Billing Code Decision

December 9, 2015

December 9, 2015

The Honorable Orrin G. Hatch
Chairman
Committee on Finance
United States Senate
219 Dirksen Senate Office Building
Washington, D.C. 20510

Dear Senator Hatch:

On behalf of our members – physicians who routinely prescribe biologic medicines – we thank you for opposing the Centers for Medicare & Medicaid Services (CMS) proposal to place biosimilars of a single reference product into one Healthcare Common Procedure Coding System (HCPCS) code.

As you are aware, CMS has now finalized this policy in the 2016 Medicare Physician Fee Schedule without making changes. As a result, Medicare Part B reimbursement of biosimilars will be based on the weighted average of sales prices under each shared HCPCS code.

Under this policy, manufacturers of biosimilars will have no incentive to invest in making improved products with different attributes. The coding policy will also interfere with the ability to track and trace each biosimilar medicine, which could have grave patient safety implications.

We write to express our serious and continuing concerns with the CMS decision. As such, we urge you and other Members of Congress to direct CMS to adhere to current law that states that the calculation for reimbursing biosimilars shall be made separately, strongly implying that each biosimilar should have its own unique payment rate and HCPCS code.

As physicians who make complex medical decisions daily, we are committed to principles of patient-centered care and a clinically-sound prescribing process for biological products, including biosimilars. A single HCPCS billing code and reimbursement rate for all biosimilars of a single reference product seriously jeopardizes these principles, undermining innovation, science and safety.

Attached below this letter is the comment we submitted on September 1 to CMS explaining our reasoning and urging CMS to adopt unique HCPCS billing codes (J-codes) for each biosimilar, unless deemed by FDA to be “interchangeable” with the reference biologic.

Respectfully,

Alliance for Patient Access

American Association of Clinical Endocrinologists

American College of Rheumatology

American Gastroenterological Association

Biologics Prescribers Collaborative

Coalition of State Rheumatology Organizations

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Comment on CMS-1631-P ("Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2016")

September 1, 2015

Andrew Slavitt, Acting Administrator
Centers for Medicare and Medicaid Services
Department of Health and Human Services
Hubert H. Humphrey Building, Room 445-G
200 Independence Avenue, SW
Washington, D.C. 20201

Dear Acting Administrator Slavitt:

As physicians who routinely prescribe biologic medicines and on behalf of professional organizations with numerous biologics prescribers as members, we write to urge adoption of unique Healthcare Common Procedure Coding System (HCPCS) billing codes (J-codes) for each biosimilar, unless a biosimilar is deemed by the FDA to be “interchangeable” with the reference biologic.

We do so based on principles arising from our commitment to patient centered care and a clinically sound prescribing process for biologics, including biosimilars.  We believe the Centers for Medicare and Medicaid Services’ (CMS) proposal to assign a single HCPCS billing code and reimbursement rate to all biosimilars of a single reference product seriously jeopardizes these principles, as follows:

Principle 1 - Science:  Biosimilars are not generic drugs.  They can only be similar to their reference product, not identical like a small-molecule generic drug.  Biosimilars, like all biologics, are large molecules grown in living systems.  In treating biosimilars like generics, CMS ignores these fundamental facts, creating additional concerns outlined below.   

Principle 2 - Choice:  The CMS proposal would reduce the financial incentive for manufacturers to compete by bringing biosimilars to market.  Access to a choice of biosimilars is important for our patients, especially where an individual patient’s immune reaction may differ between drugs. 

By prioritizing price over all other product features, the CMS proposal would also deter innovation and may discourage manufacturers from investing in new indications.  Despite important differences between products, hospitals and payers also could easily prefer the lowest cost biosimilar at any given time, reducing choice and potentially encouraging inappropriate non-medical switching back and forth between one biologic/biosimilar and another.  One paradigm in treating patients with autoimmune disorders is to avoid changing therapies unnecessarily once an effective treatment has been established.

Principle 3 - Safety:  Like any biologic, a biosimilar can trigger immune and other reactions due to differences in patients’ antibody profiles.  In addition, each biologic medicine possesses unique properties and sensitivities in manufacturing and handling, making quick and accurate identification of accountable manufacturers imperative.  

To enable effective traceability, each biosimilar must be fully distinguishable in all its names and tracking codes, including HCPCS billing codes.  The FDA’s draft guidance on nonproprietary naming of biological products proposes distinguishable names, calling for biological products to bear a nonproprietary name that includes an FDA-designated suffix.  The agency explained, “There is a need to clearly identify biological products to improve pharmacovigilance, and, for the purposes of safe use, to clearly differentiate among biological products that have not been determined to be interchangeable.”

In addition, physicians and others in the U.S. primarily rely on a non-biologic’s brand or nonproprietary generic name in reporting adverse events to the FDA.i  On the other hand, the FDA’s Sentinel Initiative uses claims data, including HCPCS billing codes.ii iii     

Principle 4 - Consistency:  As physicians who contend with a highly complex healthcare system, we value consistency.  As noted above, the FDA is proposing distinguishable naming for all non-interchangeable biologics, an approach with which CMS should be consistent in establishing HCPCS billing codes.

The CMS proposal also makes no provision for the approval of interchangeable biosimilars.  In fact, by treating biosimilars like generics, the proposal seems to treat all biosimilars for a given reference product as interchangeable.  Determinations of interchangeability must be made by FDA and based solely on scientific and medical considerations.  

Principle 5 - Research:  Many of the patients we treat contend with particularly challenging conditions, sending us to research literature to evaluate alternative treatment paths.  Separate billing codes for biosimilars would facilitate claims-based research encompassing the differences between biologics, including biosimilars.  By not differentiating between biosimilars, the CMS proposal would preclude important inquiries and significantly diminish the utility of the data that is collected. 

We believe a robust, competitive market based on differentiated benefits, including price, will deliver the promise of biosimilars to our patients.  For that market to thrive, each biosimilar needs a separate HCPCS billing code, thereby recognizing biosimilars as a new category of medicine.

Thank you for this opportunity to share our views and commitment to patient centered care and sound biologics prescribing based on our principles of science, choice, safety, consistency and research.

Respectfully,

Alliance for Patient Access

American Association of Clinical Endocrinologists

American College of Rheumatology

Biologics Prescribers Collaborative

Coalition of State Rheumatology Organizations

North American Society for Pediatric Gastroenterology, Hepatology and Nutrition

i Lietzan, E. F., et al., Biosimilar Naming:  How Do Adverse Event Reporting Data Support the Need for Distinct Nonproprietary Names for Biosimilars, The Food and Drug Law Institute, Vol. 3, Issue 6, March 27, 2013.  Accessed August 18, 2015. 

ii Gnadinger, Tracy, New Health Policy Brief:  The FDA’s Sentinel Initiative, Health Affairs Blog, June 8, 2015, Accessed on August 18, 2015.

iii Mini-Sentinel, Distributed Database and Common Data Model, Accessed August 18, 2015.