Medicaid best price reforms to enable innovative payment models for cell and gene therapies

ABSTRACT

Background

Cell and gene therapies promise durable benefits but face financial challenges from the uncertainty in their performance. Value-based purchasing arrangements (VBPAs) can address uncertainty but have been inhibited in the US by the Medicaid Drug Rebate Program (MDRP) approach to determining Medicaid Best Price (MBP) rebates. The likely effectiveness of MDRP reform proposals enabling VBPAs is examined in this study for durable cell and gene therapies.

Methods

Monte Carlo simulations examined three potential reforms (Multiple Best Prices, Bundled Sales, and National Pooling) to determine the impact on payment misalignment, the required payer size to participate, and the percentage of total lives covered by a VBPA.

Results

Simulation results suggest that 11% to 54% of commercial US lives would be feasibly covered by a VBPA depending on reform type and condition size. MPB reform achieved the highest commercial contracted percentage and lowest misalignment for commercial payers compared to National Pooling and Bundled Sales. State Medicaid plan results suggest lower extreme misalignment across all successfully contracted instances than commercial payers.

Conclusions

The Multiple Best Prices will likely enable VBPAs for many durable cell and gene therapies and larger payers. Further reforms may be needed to extend VBPAs to ultra-orphan conditions.

KEYWORDS:

• Cell and gene therapies
• Gene Therapies
• health economics
• health policy
• Medicaid best price
• Medicaid drug rebate program
• outcomes-based contracts
• patient access
• payment innovation
• value-based purchasing agreement

Acknowledgments

We would like to thank all those who participated in the MBP framework refinement primary research interviews conducted as part of this research.

Declaration of Interest

C. Quinn: Reports financial support from a National Pharmaceutical Council research grant in support of this work. M. Ciarametaro: Michael Ciarametaro was an employee of the National Pharmaceutical Council at the time of authorship. Brian Sils: Brian Sils was an employee of the National Pharmaceutical Council at the time of authorship. S. Phares: Sharon Phares is an employee of the National Pharmaceutical Council. M. Trusheim: Reports financial support from a National Pharmaceutical Council research grant in support of this work, and other financial interests including personal fees outside the scope of this work from: Co-Bio Consulting LLC, Merck & Co. and Novartis.

The authors have no other relevant affiliations or financial involvement with any organization or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript apart from those disclosed.

Reviewer disclosures

Peer reviewers on this manuscript have no relevant financial or other relationships to disclose.

Author contributions

C. Quinn Wrote Manuscript, Designed Research, Performed Research, Analyzed Data, and Contributed New Analytical Tools. M. Ciaramatero: Wrote Manuscript, Designed Research, Performed Research, Analyzed Data, and Contributed New Analytical Tools. B. Sils: Wrote Manuscript, Designed Research, Performed Research, Analyzed Data, and Contributed New Analytical Tools. S. Phares: Wrote Manuscript, and Analyzed Data. M. Trusheim: Wrote Manuscript, Designed Research, Performed Research, Analyzed Data, and Contributed New Analytical Tools.

Supplemental data

Supplemental data for this article can be accessed online at https://doi.org/10.1080/14737167.2023.2159813.

Additional information

Funding

This work was funded by the National Pharmaceutical Council.