The Biden administration has delayed for six months the implementation of a Trump-era rule aimed at incentivizing the use of value-based drug price agreements in Medicaid.
The Centers for Medicare & Medicaid Services (CMS) released a proposed rule Wednesday that delays implementation of a requirement for manufacturers to report multiple best prices for a drug covered under Medicaid if the drugmaker is participating in a value-based purchasing arrangement.
The original version of the regulation, finalized on Dec. 31, 2020, implemented the requirement on Jan. 1, 2022, but the Biden administration wants to delay the deadline to July 1, 2022.
The reason for the delay is to give CMS, states and drugmakers more time to implement the “complex system changes necessary to implement the new best price and [value-based purchasing] program,” the proposed rule said.
The delay also will ensure resources are not diverted from the fight against COVID-19.
CMS said in the rule that more time is needed, especially “given the current need to devote resources to the public health emergency relating to COVID-19 that has been in effect and will likely remain in effect through 2021.”
Drugmakers that participate in Medicaid must report to the federal government their “best price” for brand-name products, which is the amount a wholesaler, retailer or provider pays for it.
Manufacturers have claimed that the “best price” requirement has been a detriment to entering value-based purchasing arrangements for prescription drugs, a model that ties reimbursement of a drug to certain outcomes.
The rule, finalized in December 2020, lets drugmakers report multiple best prices instead of a single price when offering a value-based arrangement to all states.
CMS’ new proposed rule also includes a delay for U.S. territories to participate in the Medicaid Drug Rebate Program. A prior rule published in November 2019 called for the territories to be included by April 1, 2022, but CMS’ proposed rule aims to push that date back to April 1, 2024.
The reason for the delay is so territories can continue to devote resources to fighting COVID-19, as it can take several years to implement a rebate program.
The new regulation comes less than a week after the pharmaceutical industry sued CMS over another provision of the Medicaid rebate program.
The Pharmaceutical Research and Manufacturers of America, a top drug lobbying group, sued CMS in federal court on May 21 over another section of the Dec. 31, 2020, final rule. The drug industry wants a federal judge to ditch a requirement for manufacturers to factor in copay assistance into the Medicaid best price.