Capitalize on Biosimilars: Understand the Inflation Reduction Act

Pharmacy Practice in Focus: Health SystemsMay 2023
Volume 12
Issue 3

Pharmacists should continue to monitor payer policy changes and reimbursement rates and improve understanding of electronic order entry.

As we venture into the era of biosimilars, unprecedented financial opportunities are emerging for these drugs. Biosimilars are priced an average of 30% less than the reference biologic drug, which promotes price competition and greater access to affordable medications. By 2025, biosimilars are projected to reduce total pharmaceutical expenditure in the United States by more than $100 billion.1

Money makes money investment concept: © jirsak -

Money makes money investment concept: © jirsak -

Recognizing these financial saving opportunities, the US federal government enacted the Inflation Reduction Act (IRA) on October 1, 2022. One of the provisions under the IRA allows the Centers for Medicare & Medicaid Services (CMS) to provide a 2% payment increase for using qualifying biosimilars to Medicare Part B–covered entities over the next 5 years.2

This incentive encourages outpatient infusion centers to use biosimilars instead of reference biologic products, thus increasing biosimilar use and promoting market competition. CMS publishes a list of qualifying biosimilars each quarter based on the manufacturer-reported average sales price (ASP) for the biosimilar compared with the reference product. To qualify, the biosimilar ASP must be less than the reference product ASP. As of October 2022, there are 15 qualifying biosimilars eligible to receive the 2% add-on payment, according to the Medicare Part B quarterly price file.3

Capitalizing on these cost-saving opportunities is essential for adapting to the evolving health care system and reimbursement landscape. Pharmacists and other health care providers can begin by implementing payer preference defaults into electronic order entry systems to drive biosimilar use in outpatient settings.

Pharmacists can play a crucial role in implementing and managing biosimilar use to take advantage of reimbursement oppor-tunities over the next 5 years. As payer models continue to evolve, staying proactive by monitoring payer policy changes and reimbursement rates on a quarterly basis is essential. Additionally, a solid understanding of electronic order entry systems and their downstream implications is crucial for identifying any unforeseen challenges up front.

Although predicting payer trends is difficult, we can be sure that the federal government will continue to closely monitor biosimilars in the coming years. The effectiveness of the IRA in lowering drug costs and generating savings for Medicare and its beneficiaries remains to be seen. However, investing time and effort into maximizing reimbursement opportunities and establishing a solid financial infrastructure will pave the way for future opportunities in the field of biosimilars.


1. Biosimilars in the United States 2023-2027. IQVIA. January 31, 2023. Accessed April 11, 2023.

2. Frequently asked questions: Inflation Reduction Act biosimilars temporary payment increase. Centers for Medicare & Medicaid Services. October 1, 2022. Accessed April 11, 2023.

3. Addendum B.- OPPS payment by HCPCS code for CY 2023. Centers for Medicare & Medicaid Services. Updated January 2023. Accessed April 11, 2023.

About the Authors

Shanna Schneider, PharmD, BCPS, is a clinical reimbursement pharmacist at Baptist Health System in Kentucky and southern Indiana.

Nilesh Desai, MBA. BS, RPh, CPPS, is chief pharmacy officer at Baptist Health System in Kentucky and southern Indiana.

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