CMS Weighing New Solutions for Paying Exorbitant Drug Prices

The Centers for Medicare and Medicaid Services (CMS) are considering new payment methods aimed at curbing costs of breakthrough medical treatments – such as Novartis’s tisagenlecleucel ($475,000) and Kite Pharma’s axicabtagene ciloleucel ($373,000).

One model under review involves paying different prices for the same drug based on its success in treating a particular condition: for example, paying more for a therapy that works better for breast cancer than it does for lung cancer. A second method proposes extending the payment of an expensive medicine over a longer period, rather than requiring payment immediately after it is administered.

CMS spends hundreds of billions of dollars annually on medicines through its programs, but does not negotiate prices or purchase drugs. CMS Administrator Seema Verma told Reuters, “We are trying to do whatever we can to increase competition and give the [health insurance] plans more tools so that they can be better negotiators on our behalf.”

Source: Reuters, November 30, 2017.

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