CMS is Now Looking for Possible Ways to Cut the Cost of Drugs

The Centers for Medicare and Medicaid Services (CMS) said that within the next five years, they will be testing some new payment methods linking them to patient outcomes. They are aiming to cut the cost of drugs while improving the health services for the patients.

The Medicare officials would like doctors to use the most effective drugs regardless the cost, so they suggested a new drug reimbursement for them, UPI reported.

Pharmaceutical representatives immediately criticized the proposed methods. According to Patrick Conway, chief medical officer for CMS, doctors told him that the new method pressures them to choose more expensive drugs to get a bigger reimbursement.

"These models would test how to improve Medicare beneficiaries' care by aligning incentives to reward value and the most successful patient outcomes," Conway said in a press release from the CMS. "The choice of medications for beneficiaries should be driven by the best available evidence, the unique needs of the patient, and what best promotes high-quality care."

The Medicare Part B currently pays the doctors and hospitals with the regular price of a drug with an additional of six percent. CMS suggests reducing the add-on to 2.5 percent, but there will be a flat fee of $16.80 per drug per day. This will show whether the prescriptions change and how value and quality change.

CMS will start the test in January 2017. They would experiment with the value-based reimbursement plan that Amgen and Novartis are using on their latest heart drugs Repatha and Entresto. It will be seeking "risk-sharing" deals with the drug manufacturers to link drug payments with patient outcomes, CMS said, as reported by Fierce Pharma.

Another test CMS would like to try is the indication-based pricing. The reimbursement amount varies depending on the drug's effectiveness. Drug-pricing critic Peter Bach, of Memorial Sloan Kettering's Center for Health Policy and Outcomes suggests indication-specific payments, which is now being tested by the pharmacy benefits manager Express Scripts to some of their current clients.