Congress can’t afford to wait to make a simple fix to Medicare Part D
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Congress has an opportunity to make a meaningful impact on rising health care costs for millions of Medicare patients in the coming weeks as it determines the best way to reach an agreement on a long-term spending bill.

In fact, only a simple fix to the Medicare Part D program – also known as the prescription drug benefit program – could both reduce patient out-of-pocket costs and save taxpayer money. It’s common sense and good public policy.

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Since the start of the Medicare Part D program, millions of our nation’s seniors have benefitted from greater access to their essential medications. But many of those same seniors still face relatively high out-of-pocket costs when they reach the coverage gap, or “donut hole,” where they pay a larger share of their drug costs.

Currently, when patients’ drug spending reaches $3,750 in a year, they enter the coverage cap, where they pay a higher share of drug costs until their costs reach approximately $8,400. In 2018, seniors will cover 44 percent of the cost of some medicines in the coverage gap until they reach catastrophic coverage and their cost-sharing drops to only 5 percent.

While current law phases out the increased patient cost-sharing during the coverage gap by requiring manufacturer discounts, these discounts do not apply for key types of treatments for many serious illnesses – like cancer or genetic disorders – known as biosimilars.

A biosimilar is an FDA-approved highly similar version of a branded biologic prescription drug that has no clinically meaningful differences in terms of safety and effectiveness. Much like generics, biosimilars offer a lower-priced alternative to brand-name biologic drugs.

To date, the FDA has approved nine biosimilars to treat patients suffering from conditions including rheumatoid arthritis, Crohn’s Disease, cancer and psoriasis. More than 60 additional biosimilars are currently in development, offering the potential for tens of billions of dollars in patient, insurer and health system savings. While innovation is keeping pace, federal policy hasn’t.

Not only do these discounts not extend to biosimilars, under current law it’s impossible for biosimilar producers to offer the same discounts that branded biologic makers not only can, but must, offer.

This creates a clear financial disincentive and bias against developing and bringing new innovative biosimilar medications to market.

Importantly, a majority of seniors and taxpayers support a change that would allow biosimilar manufacturers to provide the same discount paid by their brand competitors. More than 40 health care organizations support this straightforward legislative fix. And according to a recent study, this would result in lower out-of-pocket costs for patients and reduce federal spending by $1 billion over 10 years. 

Which is why Congress – and seniors – can’t afford further delay.

It is a simple, straightforward fix for Congress to amend the coverage gap discount program to require biosimilar manufacturers to pay the 50 percent discounts paid by their brand competitors, allowing them to participate on a level playing field, and drive savings to the millions of Medicare beneficiaries who get prescription drug coverage through the Part D program. 

Join me in urging lawmakers to make this commonsense fix part of this year’s spending bill. It’s a win for our seniors, our health care system and taxpayers as whole. 

Christine Simmon is the Senior Vice President of Policy & Strategic Alliances at the Association for Accessible Medicines (formerly GPhA), and Executive Director of AAM’s Biosimilars Council, founded in 2015. She leads policy development and issues management for AAM, directs The Biosimilars Council and builds relationships with strategic partners in the health care sector.