Protecting Patient Access to Biosimilar Medicine With the 340B Drug Pricing Program
Sheila Frame
Expert translating scientific innovation into patient benefit and business success. Oncology, rare and ultra rare disease leadership depth. Passionate health care policy advocate.
In recent years, US policymakers have debated reforming the 340B Drug Pricing Program, which supports eligible health care organizations such as hospitals and clinics that provide healthcare to low-income populations through deeply discounted pricing on select medicines. Amid these conversations, some have called for a change that could limit a hospitals willingness to prescribe advanced biologic medicines for patient care, by reducing the amount they are reimbursed for these medicines. This also impacts the adoption of biosimilars and could prevent healthcare systems from realizing the significant savings these medicines can provide.
In 2018, the Centers for Medicare and Medicaid Services (CMS) cut drug reimbursement rates for 340B hospitals by more than 25 percent. At the same time, to encourage market competition, CMS allows new drugs, including biosimilars, to apply for “pass-through payment status.” Obtaining this designation allows eligible medicines to be reimbursed at a higher rate for the first two to three years they are on the market.
As a result, healthcare organizations participating in the 340B program are incentivized to provide lower-cost biosimilars that have been awarded pass-through status. In turn, this can help generate savings to the health care system, as biosimilars are proven to significantly reduce the average selling price of a medicine over the long term.
Nevertheless, there have been calls to eliminate this designation for biosimilars. If Congress or CMS were to remove the ability of biosimilars to earn pass-through status, any incentives for 340B organizations to prescribe these lower-cost medicines would be eliminated. These incentives do not disadvantage market competition, rather they enhance biosimilar adoption.
Since biosimilars entered the US market in 2015, they have faced repeated barriers that inhibit adoption and prevent potential savings. As policymakers examine the future of the 340B program, it is crucial that we do not endanger pass-through status for biosimilars, a policy that is effectively working to counteract the growing cost of care in the US. #PioneeringAccessForPatients