CMS Changes The Dictionary: Medicaid ‘Best Price’ Could Soon Mean Many Things
Value and outcomes-based purchasing agreements could see a boost under proposed Medicaid rule that CMS says will make it easier for manufacturers to experiment different contracting structures in the commercial health insurance market. CMS says the intent of these agreements is to lower drug prices for commercial payers, but the government acknowledges this is not guaranteed, and health policy experts worry both private payers and Medicaid could end up paying higher prices if the proposal is finalized.
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Implementation of ‘multiple best price’ reporting approach to facilitate value-based payment arrangements postponed until 2022 to allow time for further guidance to be developed, but new definition of VBP arrangements is effective in March.
Value-based contracting in the US is moving toward high-cost drugs for rare disease and away from lower cost chronic treatments as payers plan for the coming pipeline of cell and gene therapies. Marketed gene therapies all have some kind of risk sharing deal in place but further progress on the most innovative payment models is hampered by regulatory and operational challenges.
Medicaid should go back to the drawing board on a key part of its proposal aimed at circumventing best price reporting obstacles to value-based purchasing.