How Reforms Can Enable Payment Innovation That Drives Value
This NPC study models the effects of recent and proposed payment reforms related to CMS' best price reporting rules and sheds light on which approaches may encourage the adoption of value-based purchasing arrangements for durable cell and gene therapies.
Novel cell and gene therapies often offer a promise of long-lasting improvements for some of the most challenging conditions in health care. These advanced one-time therapies have upended conventional scientific thinking, and reimbursement must evolve appropriately with the science.
However, payment innovation lags behind therapeutic innovation in health care, creating barriers to patient access to these potentially transformative therapies.
A study from NPC published in Expert Review of Pharmacoeconomics & Outcomes Research models the effects of 2022 CMS reforms to the Medicaid Drug Rebate program, alongside proposed reforms to the best price reporting rules that shed light on which approaches may encourage the adoption of value-based purchasing arrangements for durable cell and gene therapies.
The unintended consequences of Medicaid price reporting regulations have been a primary impediment to the uptake of innovative payment models for commercial payers. The status quo has produced an environment where it’s too risky for some sectors of health care to enter value-based arrangements that encourage access. At the same time, an increasing number of durable therapies continue to enter the market and compound such access problems.
New models suggest that reforms from CMS, which went into effect in June 2022, can encourage the uptake of value-based purchasing arrangements and quell some payer uncertainty and risk associated with covering these potentially curative cell and gene therapies.
This research also shows that further reforms could encourage even greater access to these therapies. Among all proposed reforms, the Multiple Best Prices (MBP) methodology is most likely to enable value-based purchasing arrangements for many cell and gene therapies. More reforms are needed from Medicaid administrators to deliver much-needed access to cell and gene therapies for patients, particularly for those with ultra-orphan conditions.
This article is the latest NPC research highlighting regulatory barriers and challenges to innovative payment models.