CMS Issues Proposed Rule to Empower Commercial Plans and States to Negotiate Payment for Innovative New Therapies Based on Patient Outcomes
CMS Issues Proposed Rule to Empower Commercial Plans and States to Negotiate Payment for Innovative New Therapies Based on Patient Outcomes
Proposed rule updates provisions to promote value-based payment for prescription drugs
The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to promote development of payment models based on value for innovative new therapies. Costs of new drugs, including new genetic level therapies, are overwhelmingly expensive. CMS determined that new approaches to payment are needed to allow innovation but also protect the sustainability of Medicaid and other public programs. Proposals are also designed to promote combatting the opioid epidemic.
“CMS’s rules for ensuring that Medicaid receives the lowest price available for prescription drugs have not been updated in thirty years and are blocking the opportunity for markets to create innovative payment models,” said CMS Administrator Seema Verma. “By modernizing our rules, we are creating opportunities for drug manufacturers to have skin in the game through payment arrangement that challenge them to put their money where their mouth is.”
These new proposed rule terms are designed to promote payment arrangements based on the clinical outcome provided to a patient and efficacy of the drug, as opposed to quantity of drugs sold. The additional goal is to reduce overall healthcare spending and hospital visits.
CMS wants to give insurers tools to negotiate payment based on value and drug effectiveness. It appears to place additional burden on providers in requiring more evidence on clinical outcomes for a given therapy and more innovative utilization management practices.
CMS’s stated objective is to foster innovation, increase access to the latest technologies, and ensure that the Medicaid program is sustainable to be able to serve the most vulnerable populations.
A Fact Sheet on the Proposed Rule can be viewed at: https://www.cms.gov/newsroom/fact-sheets/establishing-minimum-standards-medicaid-state-drug-utilization-review-dur-and-supporting-value-based
The Proposed Rule can be viewed at: https://www.federalregister.gov/documents/2020/06/19/2020-12970/medicare-program-establishing-minimum-standards-in-medicaid-state-drug-utilization-review-and
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