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Mar 28, 2016
 |  BioCentury  |  Politics, Policy & Law

Editors' Commentary: Save the baby

Why biopharma should fight to create a true value-based experiment at CMS, not kill it

Biopharma industry associations, patient advocates and physician groups have joined forces to ask Congress to kill CMS's plan to test new schemes for reimbursing drugs administered in physician offices and hospital outpatient facilities. While the opponents raise valid points, their March 17 letter perpetuates erect-the-barricades thinking that is as obsolete as the outdated reimbursement methods the agency is trying to replace.

Even worse, the biopharma industry and its patient allies are failing to take up the opportunity to actually build a value-based reimbursement system. Instead, they are jumping into the middle of an intractable conflict over payments to providers.

The CMS proposal is not close to perfect. The first phase, slated to begin this fall, envisions a mandatory, nationwide experiment in modifying the ASP reimbursement formula for infused drugs. It could prevent some patients from accessing some drugs, and would likely shift care from private practices to hospitals, contributing to the concentration of care in ways that are more expensive to the government and less convenient for patients.

The second phase, which would not begin until January at the earliest, is described as a smaller controlled experiment in value-based purchasing that could reimburse based on outcomes, but also could include utilization controls with only loose ties to value, if any.

Acting Administrator Andy Slavitt says the project is in keeping with the agency's efforts to test "value-based care models" in other healthcare settings, and asked for constructive engagement rather than reflexive opposition in remarks at the PhRMA annual meeting on March 9.

If he is genuinely interested in engaging with stakeholders, it would be an act of good faith to admit the ASP plan needs to be rethought, and cannot begin in the fall.

At the same time, if stakeholders are genuinely interested in receiving money for value created, they must think beyond shooting the whole thing down: the biopharma industry and its allies need to demand a seat at the table to identify the appropriate value-based metrics, and reach consensus on experimental designs that will create actionable data that will benefit patients.

The time is now

On the surface, the Phase 1 goal is reasonable: to test the hypothesis that prescription...

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