Proposed changes to requirements that state-run Medicaid programs are given the best drug prices would clear the way for commercial health insurers to enter into 'value-based' payment schemes, the U.S. Centers for Medicare & Medicaid Services said on Wednesday.
FILE PHOTO: Seema Verma, Administrator of Centers for Medicare and Medicaid Services, U.S. Department of Health and Human Services, speaks at the 2019 Milken Institute Global Conference in Beverly Hills, California, U.S., April 29, 2019. REUTERS/Lucy Nicholson/File Photo
Drug manufacturers by law must give Medicaid their “best price,” meaning the lowest price they negotiate with any other buyer. But health plans have expressed concerns that the requirement prevents them from linking drug prices to patient outcomes - a practice known as “value-based” pricing. The proposed changes are being driven by the increasing availability of very expensive, potentially curative, gene therapy treatments, she said.
Commercial health insurers have considered linking reimbursement of such drugs to health outcomes, but have been stymied by the Medicaid best price rules, Verma said. “If a drug didn’t work in 20% of cases, in those cases the payment might be zero, which could completely alter the Medicaid best price,” she explained.
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