Academic Literature

CMS's Proposed Medicaid Best Price Loophole for Value-Based Purchasing of Drugs

The administration has proposed a loophole in the Medicaid Best Price rules that would dismiss linking the drug's effectiveness to its price.
Originally published on 07/06/2020 in Health Affairs Blog

US pharmaceutical companies have agreed to sell their products to Medicaid programs at the lowest price available in the market. In return, Medicaid programs cover and pay for every product the companies sell.

The administration has proposed a gaping loophole in the Medicaid "Best Price" rules: prices resulting from "value-based purchasing" agreements would not be available broadly to Medicaid programs. However, basing prices on evidence of effectiveness would better align Medicaid program spending with the program's goals of improving health affordably. Dr. Peter Bach describes why this loophole is the reason large purchasers and integrated delivery networks will support the administration's proposal, and how the administration can improve the proposal. 

Read the full article here.

Share

Research & Insights

We conduct non-partisan, independent research, and make our work accessible and informative to policymakers and the general audience alike. Browse our featured research or explore our work by article type.

Cardiovascular Drugs Not Price Aligned with Value in US
U.S. prices of common cardiovascular drugs are not consistent with the cost-effectiveness evidence.
Health Affairs 08/01/2018
Comparative Effectiveness Research in Medicare Coverage and Reimbursement
Medicare must find new ways to achieve cost control without limiting access to beneficial services.
Health Affairs 01/10/2010
Medicare Part B Premium Dynamics Explained
The Drug Pricing Lab commissioned Milliman to prepare a report exploring the impact of changes in Medicare Part B program costs on beneficiaries’ premiums and Social Security payments. This report focuses on the 2022 Part B premium for beneficiaries with various income levels to illustrate the payment dynamics and discusses the implications for related programs.
Milliman 12/23/2021
Comparing Factors that Influence Pharmaceutical Pricing and Access in the…
Drug prices in the United States are some of the highest in the world, which has triggered several policy proposals aimed at adopting pricing strategies used by other countries.
Drug Pricing Lab 12/20/2021
Biosimilars in Medicare Part D: pricing dynamics and considerations
The Drug Pricing Lab engaged Milliman to prepare a report summarizing the pricing dynamics affecting utilization of biosimilars in the current Medicare Part D marketplace and under the proposed Part D benefit design in the Build Back Better Act.

This report was commissioned by the Drug Pricing Lab.
Milliman 12/14/2021
Evaluating Industry’s Drug Pricing Claims
A closer look at three of PhRMA’s most cited talking points.
Drug Pricing Lab 11/18/2021
Mapping conflict of interests: scoping review
A scoping review of the literature to identify all known ties between the medical product industry and the parties and activities in the healthcare ecosystem.
Drug Pricing Lab 11/03/2021
Production Plus Profit Pricing (P-quad) FAQ
08/17/2021
What A Waste! The National Academy Of Medicine’s Report On…
Why Congress should not follow the National Academy of Science, Engineering, and Medicine’s recommendation to remove the JW modifier.
Health Affairs Blog 07/09/2021
Medicare Must Study Unproven, Expensive Alzheimer’s Drug
Medicare cannot indiscriminately cover the cost of Aduhelm for the treatment of Alzheimer's disease without first evaluating whether it truly works.
Bloomberg Opinion 06/15/2021
Value-Based Management of Specialty Drugs: Practical Considerations and Implications for…
Not all approaches are suited to meeting policy makers and health plans’ goals of managing specialty drugs based on their value. Researchers conducted a qualitative study with Blue Cross Blue Shield plans interested in implementing value-based specialty pharmacy management to observe the plans’ objectives, strategies, and factors influencing their ability to execute on these strategies.
AJMC 05/13/2021
Instead of debating 'first-shot' vs 'set-aside' vaccine approaches, hospitals' study…
Hospitals could start studies of their own employees to answer important questions, including whether the first-shot approach has downsides when compared to the set-aside strategy.
STAT 01/04/2021

Featured News

See All News
US Senate Committee on Finance 01/31/2019

Dr. Bach Testifies at U.S. Senate Committee on Finance's First Hearing of Session

Dr. Peter Bach, alongside Kathy Sego, Dr. Douglas Holtz-Eakin, and Dr. Mark Miller, testified before U.S. Senate Finance Committee at its first hearing of the session, Drug Pricing in America: A Prescription for Change, Part I.
Read Article
Newsletter

Stay up to date on our work and news