Skip to main content
Sister Publication Links
  • ESG: THE NEW IMPERATIVE
Subscribe
  • My Account
  • Login
  • Subscribe
  • News
    • Current News
    • COVID-19
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Transformation
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Digital Health
  • Insights
    • ACA 10 Years After
    • Best Practices
    • Special Reports
    • Innovations
  • Data/Lists
    • Rankings/Lists
    • Interactive Databases
    • Data Points
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Custom Media Event: ESG Summit
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Transformation Summit
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Supply Chain Revenue Cycle
    • - Hospital at Home
    • - Workplace of the Future
    • - Virtual Health
    • - Future of Healthcare Staffing
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • MORE +
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Medicaid
April 08, 2021 03:27 PM

MACPAC wants to cut Medicaid spending on high-cost specialty drugs

Michael Brady
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Getty Images

    The Medicaid and CHIP Payment and Access Commission is poised to recommend changes to how Medicaid pays for high-cost specialty drugs.

    At MACPAC's April meeting on Thursday, commissioners signaled they would recommend Congress increase the minimum rebate percentage and additional inflationary rebate on drugs approved by the Food and Drug Administration through the accelerated approval program. According to the draft recommendations, the increased minimum rebate percentage and additional inflationary rebate would apply to a drug until the drugmaker completes the confirmatory trial and gets full FDA approval. The commission decided not to move forward with any recommendations on cell and gene therapies at its March meeting.

    MACPAC commissioner Thomas Barker said it's up to Congress and the FDA to fix issues related to the accelerated approval process, not the Medicaid program.

    "If the Congress believes that, for example, manufacturers are not doing controlled trials when a drug gets approved under the accelerated pathway, then that's something that something could be changed in the Food Drug and Cosmetic Act. We shouldn't be using the drug rebate program as a surrogate to solve that problem," he said.

    The FDA's accelerated approval program allows for the early approval of drugs that treat serious conditions and fill an unmet need. The agency bases those approvals on lab measurements, radiographic images, physical signs or other markers that predict a clinical benefit. But drug companies must carry out studies to confirm the expected clinical benefit. If they don't, the FDA can pull the drug from the market.

    According to the commission, drugs that go through the accelerated approval process often take longer to complete their clinical trials than drugs that go through the standard approval process, forcing state Medicaid programs to pay high prices for unproven medicines.

    While the policy changes wouldn't affect the FDA's approval processes, they would probably lower Medicaid spending and encourage drugmakers to speed up their confirmatory trials, said Chris Park, a MACPAC principal analyst and data analytics advisor. The higher inflationary rebate should help offset any increases in list prices before the end of a drug's clinical trials.

    Drugmakers and some beneficiaries argue that higher Medicaid rebates could discourage pharmaceutical companies from investing in the research and development of new therapies or delay their availability. But many experts say those claims are overstated, as there was no apparent decrease in drug development after Congress increased the Medicaid minimum rebate under the Affordable Care Act. Drugmakers' decisions about a product's launch and development are affected by a range of factors, not just Medicaid rebates, according to MACPAC.

    The commission's staff said the recommendations might increase access to high-cost specialty drugs if states are willing to lower coverage and prior authorization restrictions as costs drop.

    Pharma could boost launch prices or try to raise costs for other payers because of additional Medicaid rebates. But it's unclear how that might play out since drugmakers already have financial incentives to do both.

    "Accelerated approval pathway still has benefits as it would provide earlier access to the market and allow the drug to generate revenue and establish market share while the confirmatory trial is underway," MACPAC said.

    The Congressional Budget Office found the policy changes would reduce federal spending by up to $50 million in the first year and $1 billion over five years. CBO assumed a 10% increase in the minimum rebate and a 20% rise in the inflationary rebate if the drugmaker doesn't wrap up its clinical trial after five years.

    Before accounting for rebates, Medicaid spent about $1 billion on drugs approved through the accelerated pathway in 2019.

    Clarification: This story was updated to make clear that MACPAC will not vote on a cell and gene therapy recommendation.
    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    medicaid_money_i_i.jpg
    Hospital system says it's hurt by lack of Medicaid expansion
    mom_with_baby_getty_i.jpg
    States extend Medicaid for new mothers — even as they reject broader expansion
    Sponsored Content
    Daily Dose Newsletter: Sign up to receive a late afternoon weekday roundup of that day’s breaking news and developments in healthcare.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • COVID-19
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Digital Health
    • Insights
      • ACA 10 Years After
      • Best Practices
      • Special Reports
      • Innovations
    • Data/Lists
      • Rankings/Lists
      • Interactive Databases
      • Data Points
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Transformation Summit
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Supply Chain Revenue Cycle
        • - Hospital at Home
        • - Workplace of the Future
        • - Virtual Health
        • - Future of Healthcare Staffing
      • Custom Media Event: ESG Summit
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • MORE +
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing