A bipartisan group of United States Representatives introduced the Medicaid VBPs for Patients (MVP) Act of 2023 to further enhance the use of value-based purchasing arrangements in Medicaid, which would expand patient access to novel therapies. Under the MVP Act, manufacturers would be able to submit multiple best prices to state Medicaid programs and allow state Medicaid programs to voluntarily enter into value-based purchasing arrangements with drug manufacturers for innovative treatments and cures for rare diseases.
The legislation notes that “many of these treatments, including gene therapies, are different from traditional pharmaceutical and biologic products in that they can offer long-lasting – sometimes lifelong – benefits for patients and long-term value for the health care system alike.” It further notes that while there are hundreds of those treatments in development, “the current reimbursement structure was not designed with these therapies in mind, and allowing for innovative payment arrangements will spur greater development and access to future cures and treatments.”
A VBP arrangement allows for the ability to pay based on evidence-based outcomes and over time, which helps to spread the risk out over all entities involved. This can result in lower overall costs to the health care system and patients, particularly as it can lead to reduced hospitalizations or lower utilization of other health care expenditures (i.e., lab work, other medications, office visits, etc.).
Under the legislation, a VBP arrangement includes any arrangement that aligns reimbursement with observed or expected therapeutic, evidence-based outcomes or outcomes-based measure. The intent of the legislation is that this change would better align incentives in the health care system and spur innovation of treatments and cures for rare diseases. It would not only codify federal regulations that allows for the reporting of multiple best price points for an outpatient drug and clarify that the best price under a VBP arrangement is the price paid if all benchmarks are satisfied.
The MVP Act also allows states to engage in VBP arrangements for both inpatient and outpatient drugs and notes that nothing in the legislation should be construed to mean a requirement that a State has to enter into a VBP arrangement with a manufacturer for a covered outpatient drug, nor for a manufacturer to enter into a VBP arrangement with a State for a covered outpatient drug.
“I’m proud to lead the charge on the MVP Act that will increase access to lifesaving and potentially curative treatments for vulnerable patients with rare diseases. Tying a drug manufacturer’s reimbursement for treatments to patient outcomes ensures taxpayers are not left on the hook for a high-cost treatment that does not effectively treat a patient, and this payment model gives states needed flexibility to help vulnerable patients gain access to these life-altering medications. As Chair of the House Energy and Commerce Committee’s Subcommittee on Health, I look forward to bringing this bipartisan legislation before the Health Subcommittee soon and encourage my colleagues to support this bill,” said Representative Brett Guthrie.
“Breakthroughs in gene therapies offer hope for cures for dreaded diseases like sickle cell anemia, hemophilia, and cancer. Medicaid enrollees deserve equitable access to these potential cures, but state Medicaid programs need the flexibility that the MVP Act provides to design value-based agreements to pay for these unique drugs. I’m proud to join my colleagues in introducing the bipartisan MVP Act to help make sure more Americans have access to new cures and treatments,” said Representative Anna Eshoo.