CMS' value-based pricing proposals present implementation challenges despite solid rationale – experts

31 Mar 2016

On 8 March, the Centers for Medicare and Medicaid Services (CMS) announced reimbursement changes to Medicare Part B, noting the current reimbursement rate will be lowered later this year and secondly, various value-based pricing tools would be implemented in 2017.

The proposed shift to a value-based reimbursement system, though, will have to overcome significant execution difficulties despite its sound rationale as a method to reduce costs, industry experts told BioPharm Insight. CMS’ aim is improving patient care and ensuring that the most cost-effective drugs are prescribed. However, in a letter to the US Department of Health and Human Services, more than 100 companies and organizations expressed "strong concern" the proposal would have an adverse impact.

The value-based mechanisms include indications-based pricing, reference pricing and risk-sharing agreements. The US' lack of health-value metrics like the quality-adjusted life year measure used in the UK would make implementing indications-based pricing difficult. Reference pricing also depends on defining treatment value. And risk-sharing agreements are difficult to implement because a physician cannot be held accountable unless a patient adheres to physician advice.

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