Backing into value with Part B

How HHS’s Part B proposal is a backdoor to value-based pricing

The Trump Administration’s proposed revamp of Medicare Part B would cede value determinations to other countries by importing their cost-effectiveness standards on drug pricing. It could also lead to more experiments with alternative models for drug pricing and reimbursement.

The Oct. 25 proposal from HHS would create an International Pricing Index (IPI) and link it to Medicare reimbursement for infused drugs administered in a physician’s office or outpatient hospital setting. It would also upend the existing buy-and-bill model by inserting third parties into the system to negotiate potentially lower prices, and by taking physicians out of the business of purchasing the drugs. Instead of receiving an add-on payment tied to the average sales price (ASP), physicians would be reimbursed a flat rate.

BIO, PhRMA and some physician groups see the move as detrimental, saying it imposes price controls and could put patients at risk (see “Trump’s Divide and Conquer Part B Plan”).

On first blush, introducing a cap to Medicare reimbursements appears to run counter to the administration’s proposals to move towards

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