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CMS Approves State Proposal to Advance Specific Medicaid Value-Based Arrangements with Drug Makers

Posted on Friday, June 29, 2018 7:39 PM

This week, CMS approved the first-ever approval of a state plan amendment proposal allowing Oklahoma to negotiate supplemental rebate agreements involving value-based purchasing agreements with drug manufacturers that could produce extra rebates for the state if clinical outcomes are not achieved. The state plan amendment proposal submitted by Oklahoma will be the first state plan amendment permitting a state to pursue CMS-authorized supplemental rebate agreements involving value-based purchasing arrangements with manufacturers. 

“Oklahoma’s plan for value-based drug contracts is an important example of how states can innovate to bring down drug costs,” Secretary Alex Azar said, “The Trump Administration is committed to giving states the flexibility they need to make healthcare more affordable, and strongly supports innovations like value-based purchasing for prescription drugs.”

Value-based purchasing allows the payment of a drug to be linked to its effectiveness. Oklahoma and each manufacturer can now jointly agree on benchmarks based on health outcomes and the specific populations for which these outcomes-based benchmarks will be measured and evaluated.

“President Trump is committed to lowering prescription drug prices and working with states in their pursuit towards innovative state health plans. We want to ensure we are giving states all the tools they need to better negotiate with manufacturers,” said CMS Administrator Seema Verma. “We applaud Oklahoma’s proposal for a state-plan amendment, which is an innovative approach to reform how we pay for prescription drugs and will lead to better deals for our beneficiaries and our program.”

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