HHS change to Medicare payments for biosimilars aims to spur uptake
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A temporary increase in payments from Medicare for certain biosimilar medications is designed to boost uptake of cheaper versions of high-priced biologic drugs.
The increase, which went into effect Monday, is a provision of the Inflation Reduction Act. Medicare Part B payments for certain biosimilars are required to be the average sales price (ASP) plus 8% -- as opposed to 6% before -- of the ASP of the reference biologic for five years.

The law applies to qualifying biosimilars whose ASP is not more than the price of the reference biologic.
The temporary increase "will foster competition in the drug marketplace for conditions such as diabetes, cancer, and immune disorders," CMS Administrator Chiquita Brooks-LaSure said in a statement.
Amgen (NASDAQ:AMGN), Novartis (NVS), and Pfizer (NYSE:PFE), although among the largest biotech and pharma companies, are also some the largest biosimilar players in terms of marketed products and pipeline.
The top 10 Part B drug spend by total spending are all biologics. The top 3 are Bristol-Myers Squibb's (NYSE:BMY) Opdivo (nivolumab) and Orencia (abatcept), and Merck's (NYSE:MRK) Keytruda (pembrolizumab).
Although the Inflation Reduction Act seeks to rein in prescription drug prices, Christopher M. Oshewolo wrote that its impact will be manageable for pharma companies over the mid term.