- More states are turning to alternative payment models for prescription drugs covered under Medicaid, as they seek to balance increasing costs with public health goals.
- Yet regulatory and implementation barriers still impede the spread of outside-the-box approaches, according to a paper from Duke University's Margolis Center for Health Policy.
- The paper, co-authored by former Food and Drug Administration Commissioner Mark McClellan, outlines several steps states can take to accelerate new models and showcases early successes in other states.
The arrival of pricey drugs that could essentially cure, or dramatically change treatment, of diseases like hepatitis C put states in a bind.
Many grappled with how to balance rising costs against which residents should get the drugs first. Now, several years on, more states are looking at new approaches to managing both.
Louisiana's "Netflix" model approach has captured many headlines, and may prove an example for other states seeking solutions to curb drug spending. The state reached a deal with a subsidiary of drugmaker Gilead in which the state will receive an unlimited supply of its hepatitis C drug Harvoni (ledipasvir/sofosbuvir) for a fixed sum each year for five years.
Louisiana's framework is a "promising approach to improving population health while ensuring budget certainty for the state government," the report noted.
Other ideas build incentives into contracts to reward for positive outcomes. For example, some contracts have incentives for how well patients adhere to their medication regimens.
Oklahoma, Michigan and Colorado have negotiated outcomes-based contracts with drug manufacturers, in some way reimbursing the drugmaker for how well the drug works.
Oklahoma has different contracts in place targeting drugs that treat schizophrenia, bacterial skin infections, and epilepsy, according to the paper.
Still, there are limitations.
"A measurement challenge is that few meaningful outcomes can be assessed through readily available health care claims data," the report noted.
To accelerate adoption of new ideas, states can request authority from the Centers for Medicare and Medicaid Services to implement outcomes-based contracting. The paper also encourages CMS to encourage states to apply for new authority through state plan amendments.