CMS delays controversial best price requirement for drugmakers

The Biden administration delayed part of a Trump-era rule requiring them to include the discounts they offer to patients when calculating the “best price” for drugs under Medicaid’s drug rebate program, according to a proposed rule on Wednesday.

Drugmakers were supposed to start reporting multiple best prices beginning Jan. 1, but CMS delayed the requirements until July 1, 2022. The agency said the additional time would allow the healthcare industry to address concerns over patient access and quality of care before the new requirements take effect.

“The primary reason for the original delay, and the new proposed delay, is to provide more time for CMS, states, and manufacturers to make the complex system changes necessary to implement the new best price and (value-based payment) program (and) devote resources to the public health emergency,” the rule said.

CMS also proposed delaying the inclusion of some U.S. territories in the Medicaid drug rebate program’s definitions of “states” and “United States.” The changes were supposed to take effect Apr. 1.

Drugmakers sued the federal government last week for requiring them to submit multiple best prices, arguing that CMS didn’t have the power to issue the rule and seemingly reversed course on the agency’s longstanding interpretation of the law.

The Trump administration approved the new rule in December, hoping that it would make it easier for private insurers, state Medicaid programs and prescription drug manufacturers to create value-based payment arrangements tied to clinical outcomes.

But hospitals, insurers, drug companies, medical schools and Medicaid directors argued last summer that CMS rushed the rule. They warned they needed more time to understand it since the agency didn’t look into how it would affect states and the healthcare industry or say how it would ensure the rule would work as intended.

Drugmakers were concerned the regulation could lower the price they are allowed to charge hospitals in the 340B drug discount program. And others worried it would create administrative problems and costs for providers, states and insurers.