Base Medicare Drug Payments on Value, Former CMS Chief Says


Medicare should link drug payments to value and should consider including drugs in bundled payments, researchers said Oct. 26 at a briefing.

Mark McClellan, director of the Duke-Margolis Center for Health Policy at Duke University in Durham, N.C., said Medicare should determine drug payments by looking at evidence that shows how well a drug will work for a particular patient. McClellan is a former administrator of the Centers for Medicare & Medicaid Services.

Meanwhile, Gerard Anderson, a professor at Johns Hopkins Bloomberg School of Public Health, said Part D drugs should be included in bundled payments, which combine payments for an episode of care into a single payment.

The Alliance for Health Reform held the briefing on Medicare and prescription drug prices because “paying for drugs for Medicare enrollees is a major focus of Congress, CMS, candidates for office and the health industry generally,” Karl Eisenhower, director of communications and special projects at the alliance, told me.

A spokesman for the Biotechnology Innovation Organization (BIO) told me that “while value-based reimbursement arrangements can be one promising mechanism to recognize the value of innovative therapies, they must be considered thoughtfully on a case-by-case basis and must eschew a limited range of approaches to avoid disrupting patient care or stalling innovation in the long term.”

BIO member companies “are committed to working collaboratively with payers, healthcare providers, patients, and policy makers to explore the broad range of innovative approaches for realizing the full potential of 21st century medicines to maximize patient benefit and drive ‘smarter spending’ within the healthcare system,” the spokesman said. He said examples of these innovative approaches include novel value-based and outcomes-based contracting arrangements and alternative financing and payment mechanisms.

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