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Coherus Suggests U.S.-Made Drug Formularies For Public Insurance

By John Wilkerson / April 6, 2021 at 2:54 PM

The drug formularies of public health care programs should favor American-made drugs, according to Coherus BioSciences, and the biosimilars maker is pitching this new idea as a way to protect the U.S. drug supply chain and boost U.S. manufacturing.

“If there is an American-made pharmaceutical product available, it should be preferred and paid for with that in mind so that jobs and U.S. tax dollars are not sent overseas unnecessarily,” Coherus states in a March 26 letter to the administration. “An incentive or formulary preference should be enacted not only during PHEs, but also as a permanent change in law.”

The American-made formulary proposal appeals to President Joe Biden’s desire to boost American production. Biden, like his predecessor, used the Defense Production Act to help drug companies secure the equipment and supplies they need to make hundreds of millions of coronavirus vaccine doses stateside. Congress also relied on the law for its pandemic response. Democrats’ American Rescue Plan Act makes $10 billion available under the Defense Production Act for buying, producing and distributing pandemic medical supplies and equipment, including vaccines.

Coherus’ letter states that foreign nations are luring too many companies abroad with tax incentives, and the formulary proposal should be among the incentives that encourage companies’ return and reward those, including Coherus, that have kept their manufacturing facilities in the United States.

There is precedent for using Medicare reimbursement to favor American-made products, the company says. Technetium-99, a radioisotope used in diagnostic imaging services, is produced abroad in nuclear reactors using highly enriched uranium. To decrease America’s reliance on those reactors, CMS in 2013 used its so-called equitable adjustment authority to pay extra for Technetium-99 obtained from sources that don’t use highly enriched uranium. CMS plans to use this add-on payment until conversion to non-HEU sources is close to completion.

National stockpile policy also should prefer American-made products, Coherus says.

“The U.S. needs U.S.-based capacity to reduce vulnerability in our supply of medicines as a matter of national security and patient safety,” Coherus states.

The American-made formulary proposal is among many recommendations Coherus makes in its letter. The company’s sole product is Udenyca, a biosimilar of Neulasta. The biologic stimulates growth of white blood cells following chemotherapy.

To spur the biosimilars market, Coherus also recommends Congress increase Medicare doctor reimbursement for administering biosimilars from the current formula -- average sales price of a biosimilar plus 6% of the reference biologic’s ASP -- to biosimilar ASP plus 8% of the reference product’s ASP. This policy was included in both House Democrats’ H.R. 3 and the Senate Finance Committee’s bipartisan bill by Sens. Chuck Grassley (R-IA) and Ron Wyden (D-OR).

Coherus also recommends that Medicare test a biosimilars shared savings model and that FDA more aggressively police misinformation on biosimilars by brands.

Lastly, Coherus urges the administration to extend pass-through status at least one year for products, such as Udenyca, that have pass-through status during the pandemic. Another option that achieves the same goal would be to establish a separate payment after pass-through status ends. -- John Wilkerson ([email protected])

Originally posted on InsideHealthPolicy.