Senators Bill Cassidy, a Republican from Louisiana, and Mark Warner, a Democrat from Virginia, have teamed up and are seeking input on a bipartisan draft legislation aimed at facilitating new and innovative payment models for pharmaceuticals and medical services.
The draft legislation, the Patient Affordability, Value and Efficiency Act (PAVE Act), would promote the development of value-based agreements and would exempt performance-based drug reimbursement contracts from the Medicaid Best Price Rule, Anti-Kickback Statute, and the Stark Law. The senators are seeking feedback to ensure “highly technical changes enabling value-based arrangements are thoroughly vetted and important oversight protections are preserved” prior to formally introducing the bill.
The senators are asking for all feedback to be submitted no later than February 19, 2019. Comments and feedback can be submitted via email to either office at paveact@cassidy.senate.gov or paveact@warner.senate.gov.
General Reaction
The Trump Administration and drug industry have publicly voiced support for implementing outcomes-based contracts, and several patient advocate groups have backed the bill, including CureDuchenne, MLD Foundation, Prevent Cancer Foundation, Power for Parkinson’s, and The Michael J. Fox Foundation.. White House officials previously indicated support for removing barriers to outcomes-based contracts, and CMS has already approved their use in Oklahoma and Michigan’s Medicaid programs.
PhRMA previously submitted a public comment to the Department of Health & Human Services (HHS) Office of Inspector General asking for safe harbor for outcomes-based contracts. Patient advocate groups sent a letter to Sens. Cassidy and Warner Tuesday thanking them for their work to expand outcomes-based contracts, explaining that the reimbursement methodology could expand access to innovative therapies. Additionally, the Council for Affordable Health Coverage announced earlier this month the group will support the finalized bill when introduced.
Senators’ Statements
“To lower the cost of health care, we should leverage new ideas and new approaches, and I’m proud Louisiana is helping to lead the way,” said Dr. Cassidy. “We are crafting this legislation to implement innovative, market-based solutions to increase patient access to care and make medications more affordable.”
“In recent years, skyrocketing prescription drug prices and health costs have made it more difficult for Americans and communities to access lifesaving care,” said Senator Warner. “That’s why I’ve teamed up with Senator Cassidy to re-align the way Americans are charged for prescription drugs and other health care costs. With input from experts and key stakeholders, we’ll be able to ensure that pharmaceutical companies and medical device manufacturers are incentivized to develop more effective treatments at a better price.”
In his press release announcing the draft legislation, Senator Cassidy stated that current law unintentionally restricts the ability of insurers, hospitals and clinics to pay for prescription drugs or medical devices based upon their proven effectiveness, and this bill will increase the health industry’s ability to move toward value-based arrangements. He further explained that the legislation provides for narrowly tailored exemptions to help drive down prescription drug and medical device costs while incentivizing manufacturers to create products that effectively treat patients.