Members of the GI and rheumatology communities are asking congressional appropriators to support inclusion of Fiscal Year (FY) 2027 spending bill report language directing the Centers for Medicare and Medicaid Services (CMS) to establish, through rulemaking or guidance, a Medicare Advantage (MA) plan formulary adequacy standard for provider-administered biosimilars.
The request is in response to artificially low average sales prices (ASPs) for biologics, which are distorted by excessive manufacturer rebates to health plans and pharmacy benefit managers (PBMs) to secure formulary placement. As a result, many biosimilars are “underwater”—reimbursed below their acquisition cost—making it financially infeasible for physicians to provide them in the office setting.
A formulary adequacy standard could be structured such that any biosimilar placed in a fail-first position by MA plans be reasonably available to network providers and, if not, that plans permit timely access to an alternative biosimilar or the reference biologic without additional utilization management.
ASGE has been actively lobbying for policymakers over the past year to address the problem of biosimilars that are “underwater,” emphasizing that without policy changes, patients oftentimes must be referred to other sites of services, namely hospital outpatient departments, for infusions which can lead to delays until new authorization are obtained, and higher patient out-of-pocket costs.