Innovative Contracting for Pharmaceuticals and Medicaid’s Best-Price Rule
From the abstract:
In recent years, drug manufacturers and private payers have expressed interest in novel pricing models that more closely link a drug’s price to its value. Indication-based pricing, outcome-based pricing, drug licenses, and drug mortgages have all been discussed as alternatives to paying strictly for volume. Manufacturers and payers have complained, however, that Medicaid’s “best-price rule” inhibits their ability to enter into these new pricing arrangements. This paper examines the best-price rule and assesses to what extent, if any, it might frustrate the goal of paying for value. We conclude that the best-price rule is not as serious a problem as it is sometimes made out to be, but that it is also not simply a convenient excuse for refusing to try something new. The law here is complex, and moving to a pay-for-value model for drugs will require close coordination between manufacturers, payers, and regulators.
Read the full paper here!bioethics fda health care finance health care reform health law policy medicaremedicaid pharmaceuticals rachel sachs regulation