President Donald Trump's administration implemented a payment policy change that could increase the price of biosimilars, according to The Wall Street Journal.
Here are seven things to know.
1. The Trump administration implemented an industry-backed measure that overturns an Obama-era policy that rewarded physicians with larger profits if they used the lowest-priced biosimilars. The idea behind the Obama administration's policy was to encourage drugmakers to cut prices to capture market share.
2. Pharmaceutical giants lobbied against the Obama-era policy, arguing it discouraged investment in biosimilars.
3. Drugmakers say the new policy implemented by the Trump administration will help them earn sufficient profits on their investments in biosimilars, attract more competitors to the market and reduce drug costs over the long term.
4. "We view that as very, very positive for our company and our industry because it essentially means that we're in command of our own pricing strategy," Michael Fleming, executive vice president for sales and marketing at Coherus BioSciences, a biosimilar developer, told the WSJ.
5. The new policy will affect biosimilars paid for under Medicare Part B, which covers outpatient and inpatient services for the elderly and disabled.
6. Under the previous policy, Medicare reimbursed physicians based on the average U.S. sales price of all biosimilars corresponding to a brand-name drug. This meant if a physician used a biosimilar priced lower than the average, they kept the difference as a profit.
7. The new measure requires Medicare to reimburse physicians based on their individual pricing.