Value-Based & Transparent Drug Pricing a Priority for CMS | Pharmaguy's Insights Into Drug Industry News |

Andy Slavitt, CMS Acting Administrator spoke on Nov. 20 at the HHS Pharmaceutical Forum on the growing problem of consumer access to life-saving medications. Slavitt put forth a three-pronged strategy.

  • Applying a model of value-based payments to drugs
  • Increasing drug pricing and value transparency
  • Reexamining existing regulatory hurdles

National spending on drugs increased 13 percent in 2014. This is the highest increase the government has seen since 2001, according to Slavitt. He compared that figure to a 5 percent increase overall in health care spending.

“State Medicaid agencies in some cases are in the difficult position of withholding vital therapies for people in need,” said Slavitt.

In addition to high-cost specialty drugs, which are known cost drivers, Slavitt expressed concern for what he views as an industry-wide dysfunction in generic medications.

“Each year, the use of FDA-approved generics saves the country $200 billion. However, in some instances, the prices of generics available for years have increased substantially without any additional health benefits for patients,” said Slavitt.

One area that CMS is looking to reform is applying value-based payments to pharmaceuticals. Slavitt pointed out that while the government has shifted towards financial incentives for quality in providers and hospitals, similar incentives do not exist for more efficient drug therapies.

In addition, Slavitt states that CMS will also begin to look into drug pricing transparency.

“The truth is we don’t have enough public information on the effectiveness of new drugs in the real world or about prices and rebate structures,” said Slavitt. “In order to avoid reacting to misinformation, we must increase the transparency of the information available about drug pricing and value.