Last week, the Centers for Medicare & Medicaid Innovation (CMMI) released a Request for Information seeking public comments on potential new patient-centered initiatives. These initiatives complement existing and ongoing initiatives at the Centers for Medicare & Medicaid Services (CMS). Bristol-Myers Squibb (BMS) applauds the announcement, to “promote patient-centered care and to test market-driven reforms.” It is our belief that these reforms “empower beneficiaries as consumers, provide price transparency, increase choices and competition to drive quality, reduce costs, and improve outcomes.” This is an exciting opportunity for innovators such as BMS as we seek ways to overcome existing hurdles inherent in our federal landscape so we can increase value for patients.
The Agency’s RFI emphasizes increased flexibility and reduced regulatory burden. It focuses on voluntary models, and analyzing options for alternative prescription drug models that can be easily aligned with existing demonstrations and policies already underway. We know from the Agency’s proposed Medicare Outpatient Prospective Payment System and Physician Payment System rules that CMS is looking at ways to reduce regulatory burden for providers and increase flexibility in the U.S. health care system. It is also notable that CMS recently announced plans to move away from mandatory and burdensome episodic payment models, and move toward voluntary models that involve greater stakeholder input and put patients first.
There is greater demand for outcome-based contracting that allows payers and providers to minimize risk, in addition to letting manufacturers differentiate their products in patient care.These changes will be increasingly necessary in today’s marketplace as Medicare and other payers are shifting toward risk-based provider payment systems and delivery models, population health management, and improved data repositories and informatics systems. The trend for outcome-based contracts is still relatively new in the U.S., but the trend is increasing as witnessed by the recent announcement on CAR-T cell therapy for pediatric populations in Medicaid and the Children’s Health Insurance Program.
To be able to engage in value-based contracting, biopharma continues to work with the Food and Drug Administration (FDA) to improve statutory certainty on how manufacturers can share health care economic information and real world evidence to appropriately to inform optimal patient care. But there is more to be done. For there to be clear pathways, federal policymakers must be open to changes to anti-kickback statutes, as well as government price reporting, 340B oversight, and current Medicaid rebate regulations. This will help expand and clarify safe harbors and reform price and rebate reporting to align with new contracting arrangements.
Both legislation and regulation are needed to properly define voluntary, value-based contracting arrangements — they establish certain core features, such as risk-sharing. It is also imperative that stakeholders, most importantly patients, have a common understanding of these arrangements. Any definitions will need to be sufficiency flexible to allow for potential innovative structures that have yet to be developed. In addition to updating directly relevant laws and regulations, such as those related to pricing, policy makers should consider whether existing fraud, abuse, and monitoring paradigms protect all stakeholders impacted by value-based arrangements.