Biosimilar Biologics Treated as Authorized Generics

December 21, 2016

In this notice to participating drug manufacturers, the Centers for Medicare and Medicaid Services (CMS) Center for Medicaid and CHIP Services clarifies that a biosimilar biological product approved under a biologics license application (BLA) should not be treated as an authorized generic drug for purposes of the Medicaid Drug Rebate program, nor should it be included in the sales of the manufacturer of the reference biological product to the manufacturer of the biosimilar biological product when calculating average manufacturer price (AMP).

As the notice explains, a biosimilar biological product would not qualify as an authorized generic drug because it is neither marketed under a New Drug Application (NDA) nor able to be classified as an innovator multiple source or ā€œIā€ drug in the Medicaid Drug Rebate system.

In addition, because biosimilars fall within the definition of single source drugs in the Medicaid Drug Rebate program, the best price of the reference biologic and the biosimilar biologic should be determined separately as the lowest price available from each manufacturer.