The value-based pricing proposal gets subpar reviews
In June, the Centers for Medicare and Medicaid Services released a proposal that they said would help drug makers pen so-called value-based arrangements with insurers. The proposal, in essence, would relax certain Medicaid drug pricing rules that drug makers have complained kept them from signing those kind of agreements. It seemed like a big win for drug makers, but there’s one problem: No one seems to like the new proposal.
CMS has been flooded with negative comments since it was released. The biggest critics are Medicaid programs and Medicaid advocates; The National Association of Medicaid Directors said the proposal “would greatly favor manufacturers over states in terms of financial benefit, have significant impacts on the Medicaid pharmacy benefit, undermine best price protections that ensure the sustainability of Medicaid pharmacy budgets, and place substantial strain on state administrative resources.”
The Georgetown University Center for Children and Families also called the rule “seriously flawed.” In addition to raising a number of technical concerns, they’re also requesting HHS do a more thorough analysis of how the rule would impact Medicaid spending. And already, they’re hinting that HHS might have violated federal law by not doing that analysis.
Even PhRMA, the drug industry trade group, told CMS that a key component of the proposal, which would allow drug makers to set multiple “best prices,” was so vague that they couldn’t formulate meaningful comments.
“We ask CMS not to finalize the multiple best price proposal and instead to promulgate another proposed rule with additional information that fleshes out the multiple best price concept and enables stakeholders to develop meaningful comments on this approach,” PhRMA wrote.
The Council for Affordable Health Coverage, which includes drug makers, insurers, and middlemen, and which has been one of the biggest advocates for these types of agreements, likewise asked for more clarity from CMS. The group insisted, however, it was “supportive of CMS’ efforts.”
Patients are angry about the rule, too. That’s striking because patient groups have long advocated for so-called value-based contracts. But they say a provision tucked into the rule that would change how the federal government deals with so-called copay accumulators, insurance schemes where drug makers’ coupons don’t count toward the tally of how much patients pay out-of-pocket for their drugs, would dissuade drug makers from offering coupons for pricey drugs.
CMS received more than 30,000 comments on the docket, and while most aren’t publicly available, I’d bet my paycheck many are part of a letter-writing campaign. After all, even the most controversial drug pricing regulations, like Trump’s drug importation plan only received roughly 1,200 comments. Drug pricing rules only get tens of thousands of comments when you get angry patients involved.