CMS issued a final rule Dec. 21 to make it easier for states, payers and drug manufacturers to enter into value-based purchasing arrangements for prescription drugs.
Under current regulations, it is difficult for drugmakers to account for value-based arrangements in their Medicaid best price reporting to CMS, the agency said. Current regulations also discourage payers and manufacturers from entering into payment arrangements based on the value of the drug.
The final rule aims to curtail these challenges by updating the 30-year-old Medicare Drug Rebate Program law and revising average manufacturer price and "best price" reporting requirements.
The changes will be effective in January 2022.
CMS said the changes could save up to $288 million in healthcare spending though 2025.
"Medicaid's outdated rules have consistently stymied the ability of payers and manufacturers to negotiate drug reimbursement methods based on the actual outcome of the treatment," said CMS Administrator Seema Verma. "A new generation of approaches to payment methods is needed to allow the market the room to adapt to these types of curative treatments while ensuring that public programs like Medicaid remain sustainable and continue to receive their statutorily required discounts."
Access the full rule here.