The Biden administration has delayed for six months the implementation of a Trump-era rule to encourage the use of value-based drug price agreements in Medicaid.
The Centers for Medicare & Medicaid Services (CMS) on Wednesday released a proposed rule that delays implementation of the requirement for manufacturers to declare multiple best prices for a drug covered by Medicaid if the drug maker participates in a deal purchase based on value.
The original version of the regulation, finalized on December 31, 2020, implemented the requirement on January 1, 2022, but the Biden administration wants to extend the deadline to July 1, 2022.
The reason for the delay is to give CMS, states and drugmakers more time to implement the “complex system changes needed to implement the new best price and [value-based purchasing] program ”, says the proposed rule.
The delay will also ensure that resources are not diverted from the fight against COVID-19.
CMS said in the rule that more time was needed, particularly “given the current need to devote resources to the COVID-19 public health emergency which is in effect and likely will remain so until 2021. . “
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Drug manufacturers who participate in Medicaid must report to the federal government their “best price” for branded products – the amount that a wholesaler, retailer or supplier pays for them.
Manufacturers have argued that the “best price” requirement has hampered value-based purchase agreements for prescription drugs, a model that ties reimbursement for a drug to certain outcomes.
The rule, finalized in December 2020, allows drugmakers to declare multiple best prices instead of a single price when offering a value-based arrangement to all states.
The new rule proposed by CMS also includes a deadline for U.S. territories to participate in the Medicaid drug rebate program. An earlier rule published in November 2019 called for the inclusion of territories by April 1, 2022, but the rule proposed by CMS aims to push that date back to April 1, 2024.
The reason for the delay is that the territories can continue to devote resources to the fight against COVID-19, as it may take several years to implement a rebate program.
The new settlement comes less than a week after the pharmaceutical industry sued CMS over another provision of the Medicaid rebate program.
The Pharmaceutical Research and Manufacturers of America, a leading drug lobby group, sued CMS in federal court on May 21 over another section of the December 31, 2020 final rule. The pharmaceutical industry wants that. a federal judge drops the requirement for manufacturers to account for co-pay assistance in the best price of Medicaid.