H.R. 7871: Medicaid VBPs for Patients Act

This bill, known as the Medicaid VBPs for Patients Act, is designed to modify certain aspects of the Medicaid program, particularly concerning the purchasing of drugs under value-based purchasing (VBP) arrangements. Here’s a breakdown of what the bill aims to do:

Value-Based Purchasing Arrangements

The bill seeks to codify value-based purchasing arrangements within the Medicaid system. These arrangements allow for the prices of drugs to be based on their effectiveness and the outcomes they produce, rather than just their list prices. Under these arrangements:

• Drug manufacturers can negotiate multiple pricing options for a single drug, which is contingent on the manufacturer's offer to all states.
• Value-based purchasing arrangements can include conditions where manufacturers provide refunds or price adjustments if patients do not achieve the agreed health outcomes.

Changes to Price Calculation

The bill amends how the average manufacturer price (AMP) and average sales price (ASP) of drugs are calculated. Specifically:

• When calculating the AMP for drugs sold under VBP arrangements, any discounts or rebates provided due to outcomes must be factored in, which might lower the reported average price.
• For drugs sold under VBP arrangements that involve payments made over time, the calculation will consider the total payment as if it were made all at once for rebate calculations.

Guidance for States

The Secretary of Health and Human Services is required to provide guidance to state Medicaid agencies on how they can engage in VBP arrangements, especially for inpatient medications. This also includes how states can collaborate to allow for the transfer of funds in their purchasing agreements.

Exceptions and Rules

The bill includes provisions that exempt certain VBP remuneration from anti-kickback laws. This means that manufacturers can legally provide incentives to states based on patient outcomes without facing legal repercussions.

Study and Reporting

The bill mandates the Government Accountability Office (GAO) to conduct a study examining:

• The effectiveness of VBP arrangements in improving patient access to medications and reducing overall healthcare costs.
• Disparities in accessing drugs sold under these arrangements.
• The impact on Medicaid and related health programs.

A report detailing the findings of this study must be submitted to Congress by June 30, 2029.

Implementation Timeline

Many of the provisions contained in this bill must be implemented within 180 days after it becomes law, ensuring timely adoption of the new framework for value-based purchasing in Medicaid.

Relevant Companies

• PFE (Pfizer Inc.): As a pharmaceutical company, Pfizer may be directly impacted by changes in drug pricing and purchasing arrangements under Medicaid.
• AMGN (Amgen Inc.): Similar to Pfizer, Amgen is involved in producing medications that could fall under value-based arrangements, potentially affecting how they price their drugs in the market.
• BMY (Bristol-Myers Squibb Company): This company produces various medications that may be subject to the new purchasing arrangements and pricing calculations.