S. 1637: Medicaid VBPs for Patients Act

This bill, titled the "Medicaid VBPs for Patients Act" or "MVP Act," proposes changes to the Medicaid program regarding how certain purchasing arrangements for medications are handled. The main points of the bill are as follows:

Value-Based Purchasing Arrangements

• The bill codifies value-based purchasing arrangements (VBPs) in Medicaid, allowing these arrangements to have multiple best price points for a single dosage of a drug if offered to all states by the manufacturer.
• VBPs are defined as agreements where a manufacturer adjusts the pricing of a drug based on the outcomes achieved by patients. For instance, if a patient does not meet certain health benchmarks, the manufacturer may offer refunds or reduce payment amounts.

Average Manufacturer Price and Sales Price Calculations

• The bill amends how the average manufacturer price and average sales price are calculated for drugs under these VBP agreements. Specifically, certain amounts related to these transactions can be excluded from calculations to potentially lower costs for Medicaid.
• It establishes rules that specify how the pricing should be reported, particularly when multiple best prices are involved.

Guidance for States

• Within 180 days of the bill's enactment, the Secretary of Health and Human Services (HHS) is required to provide guidance to state Medicaid agencies on entering into VBPs. This guidance includes how states can collaborate and facilitate funding arrangements for patients across state lines.

Antikickback Statute Exceptions

• The bill proposes amendments to the antikickback statute to exempt certain payments made under VBPs from being considered illegal remuneration. This means manufacturers can financially support states in specific scenarios without risking penalties, particularly if a patient does not achieve desired health outcomes.

GAO Study and Report

• It mandates that the Government Accountability Office (GAO) conduct a study on the impact of VBPs on access to medications, health outcomes, and overall costs in the Medicaid system. The findings, including an analysis of different pricing structures, are to be reported to Congress by June 30, 2029.

Implementation Timeline

• Rulemaking to implement the changes outlined in this bill is expected to happen within 180 days after the bill is enacted.

Impact Overview

This bill aims to provide more flexible and outcome-based pricing for medications covered by Medicaid, potentially leading to cost savings and improved patient outcomes by holding manufacturers accountable for the effectiveness of their products.

Relevant Companies

• PFE (Pfizer Inc.) - As a major pharmaceutical manufacturer, changes in VBP arrangements may influence how Pfizer prices its drugs within state Medicaid programs.
• JNJ (Johnson & Johnson) - With a wide portfolio of medications, J&J could be affected by the implementation of multiple best prices under VBPs.
• AMGN (Amgen Inc.) - As a biotechnology company, the provisions for value-based pricing may allow Amgen to adapt its pricing strategies for drugs, especially those related to chronic diseases.