A Deeper Dive into CMS’ Multiple Best Prices Policy – JD Supra

As my colleague Tom wrote about in a recent post, the Centers for Medicare & Medicaid Services (CMS) has finally responded to a growing chorus of stakeholders that government price reporting requirements, particularly Medicaid Best Price (BP), are stifling innovative value-based contracting arrangements (VBAs).  As the proverbial wisdom goes, “nothing changes if nothing changes,” and CMS’ recently finalized proposal to allow manufacturers to report multiple BPs is meant to stimulate innovative changes in contracting for drugs and biologicals.

In this post, we want to take a closer look at the proposal and consider some potential implications in a bit more detail, especially as they relate to state Medicaid programs’ ability to leverage VBAs.

Medicaid Best Price can hinder value-based contracting arrangements in the commercial space.

Avid readers of our blog understand how BP can hinder the development of VBAs because we’ve harped on it quite a bit in the past (here, here, and here).  Without belaboring the point too much, the Medicaid BP requirement imposes an obligation on manufacturers that have signed a Medicaid Drug Rebate Program (MDRP) Agreement to report certain pricing information to the federal government, including the manufacturer’s lowest price that it extends to any purchaser in the United States (with a few exceptions), also known as the manufacturer’s BP.

In addition to reporting pricing information, the manufacturer is also required to provide certain rebates to the state Medicaid programs for their “covered outpatient drugs” (a defined term that we don’t need to dive into