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

Figures & data

Figure 1. Medicaid Best Price (MBP) rebate example for a $1 million list price durable therapy with a value-based purchasing agreement reported by the drug developer.

Box 1: MDRP Proposed Reforms to enable drug Value-Based Purchasing

Pre-2020 CMS Rule: The historic Medicaid Best Price approach as illustrated in Figure A-1. 2020 CMS Rule – Multiple Best Prices: Developers report the best price available via contract (e.g. claim is not required to trigger discount) in a quarter in each performance tier across all commercial entity contracts using a particular VBPA arrangement design. Medicaid plans must a priori opt-in to the VBPA arrangement design to obtain the financial terms. However, the developer determines whether to report under Multiple Best Prices or Bundled Sales. 2020 CMS Rule – Bundled Sales: Developers report the lowest average price realized in a quarter in any single contract with a commercial entity using a particular VBPA arrangement design. The developer determines whether to report under Multiple Best Prices or Bundled Sales. Proposed Reform – National Pooling: Developers report the best average price realized in a quarter across all VBPA contracts with commercial entities using any VBPA arrangement design. Medicaid plans do not need to track outcomes because the VBPA reductions are included in the standard rebate calculation. Proposed Reform – Best Deal: State Medicaid plans may participate in the best commercial outcomes-based contract offered by a drug firm [30]. Proposed Reform – Exemption: Developers do not need to report prices into the MBP systems for outcomes-based or other innovative payment arrangements for durable cell and gene therapies [30,31].

Figure 2. Simulation results: impacts of MBP reform approaches on covered lives.

Figure 3. Payment misalignment results across all scenarios, commercial payers.

Figure 4. Payment misalignment results across all scenarios, Medicaid payers.

Figure 5. Payment misalignment results with AMP Reform under national pooling approach, Medicaid payers.

Dolan R, 2019. Understanding the Medicaid prescription drug rebate program [Internet]. KFF. cited 2022 Mar 15]. Available from 2022 Mar 15: https://www.kff.org/medicaid/issue-brief/understanding-the-medicaid-prescription-drug-rebate-program/

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