Ruling Will Thwart Biosimilar Drug Market

By , 11/30/15

The Europeanization of U.S. drug pricing that Scott Gottlieb warns about in his op-ed (“The Coming Government Takeover of Drug Pricing,” Nov. 23) already has begun. He warns of “reference pricing,” in which the government lumps together drugs that “bureaucrats feel are similar enough that they can be used in place of one another—even if a newer but also more expensive treatment might offer benefits over older alternatives.” In direct violation of congressional intent, the Centers for Medicare & Medicaid Services finalized a rule Oct. 30 explaining how Medicare will pay for physician-administered biosimilar drugs, which are similar but not identical to the original brand-name biologic drug. It decided it would lump all biosimilars that mimic the same original into the same category, i.e., reference pricing.

However, the physical attributes of the biosimilar drug will never be exactly the same as the original biologic or any other biosimilar drug, and this diversity can potentially impact effectiveness and side effects.

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About the author

Grace-Marie Turner is president of the Galen Institute, a public policy research organization that she founded in 1995 to promote an informed debate over free-market ideas for health reform. Full biography