The US Centers for Medicare & Medicaid Services (CMS) said proposed changes to requirements that state-run Medicaid programs are given the best drug prices would pave the way for commercial health insurers to enter into "value-based" payment schemes, as reported in the Financial Post.
"The problem has been that the Medicaid 'best price' regulations are a barrier…Today we are announcing that we are updating them to allow for more value-based pricing," said CMS administrator Seema Verma.
According to Verma, the proposed changes are being driven by the increasing availability of very expensive, potentially curative, gene therapy treatments.
Spark Therapeutics, now owned by Roche, in 2018 launched its Luxturna treatment for an inherited genetic mutation that causes blindness at a price of $850,000, while Novartis last year won FDA clearance for its Zolgensma gene therapy in spinal muscular atrophy, pricing the one-time treatment at $2.1 million.
Verma noted that commercial health insurers have considered linking reimbursement of such drugs to outcomes, but have been hampered by the Medicaid best price rules. "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.
The new proposals include calculating the best price based not just on one discount, but as a comprehensive blend of prices. They would also allow for price calculations outside of the current three-year window.
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