On June 29th, Minnesota Governor Tim Walz signed his state’s HHS Omnibus budget for 2022-2023. The legislature had considered but ultimately rejected language aimed at boosting uptake of biosimilars – provisions which many patient groups believed might inadvertently increase out-of-pocket costs.
Since April, ASBM and other organizations including the Lupus and Allied Diseases Association (LADA, Inc.), the Global Colon Cancer Association (GCCA), and individual patients in Minnesota communicated to legislators their concerns with the language. In a letter to Minnesota legislators dated April 26, 2021 and co-written with LADA, Inc, ASBM laid out how the provisions might negatively impact prescription costs for patients:
The legislation assumes that products with lower wholesale acquisition cost (WAC) or “list” price translates into lower costs for healthcare payers and patients. However, list price is the price before any rebates, discounts, or other price concessions are offered by the drug manufacturer. In practice, manufacturers of biologics must compete on net cost in order to secure a preferred formulary position, but due to negotiated discounts with health plans and PBMs, the net price of a reference product may end up being substantially lower than the net price of a biosimilar with a lower WAC/list price.
The availability of biosimilars currently places downward pressure on net prices by forcing reference product manufacturers to discount their products heavily in order to compete. By focusing on the WAC rather than the true (net) cost of the medicine after rebates and discounts, the bill’s language removes the incentive to compete on net prices. We believe that this is counterintuitive to the intent of the legislation and will result in higher rather than lower costs for Minnesota patients.
“ASBM, like most patient advocacy organizations, is strongly supportive of legislation written with the goal of realizing cost savings through competition between multiple biologic products” said Executive Director Michael Reilly. “However, the language contained in HF 2128 would have undermined this objective by removing current incentives to compete on price and would have reduced, rather than promoted, affordability of biologics.”
Read one of ASBM’s several letters here.
Read LADA, Inc.’s letter here.
Read GCCA’s letter here.
Read Minnesota cancer patient Jason Randall’s letter here.
View the final Minnesota omnibus health and human services bill here.