CMS Proposes Medicaid Best Price Changes to Boost VBP Deals

As more and more high-cost therapies come onto the U.S. market, payers are looking for ways to be able to cover those treatments for their members who need them. Value-based purchasing (VBP) arrangements are an option, but they do not come without challenges. CMS last month issued a proposed rule aimed at making it easier for manufacturers to offer these contracts by addressing one hurdle: Medicaid best price.

Drugmakers have long cited Medicaid best price — which determines how rebates are calculated in the Medicaid Drug Rebate Program — as an impediment to their ability to offer VBP deals to both commercial and government payers. Specifically, since manufacturers need to sell their drugs to Medicaid at the lowest price they offer another purchaser, companies have said that if they have to provide a large discount due to patients’ failing to meet certain contract-stipulated outcomes, that they will have to make a drug available to Medicaid programs at a much lower price than they are comfortable with.

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