CMS mulls new payment models for drug pricing

generic drugs
CMS is eyeing new ways to pay for drugs, in an effort to reduce prices. (The Photographer/CC BY-SA 4.0)

The Centers for Medicare & Medicaid Services is developing new payment models aimed at reducing the cost of pricey drug treatments. 

CMS Administrator Seema Verma told Reuters in an interview that the agency is targeting expensive therapies, including gene therapy, for cancer and other diseases. 

One model under consideration is a system where patients would pay more depending on its success in certain conditions; for example, a patient might be charged extra for a drug that treats breast cancer more effectively than liver or lung cancer, according to the article. 

RELATED: Cleveland Clinic develops new front in drug price war 

The price of drugs is a hot-button healthcare topic. President Donald Trump has urged pharmaceutical companies to decrease their prices, and the cost of medication was also central to a Senate panel hearing last week for former pharmaceutical executive Alex Azar, Trump's pick for secretary of the Department of Health and Human Services. 

RELATED: Drug experts say hospitals—not pharma—to blame for rising healthcare costs 

Meanwhile, the National Academies of Sciences, Engineering and Medicine has issued a new report that states reducing the cost of drugs is crucial to improving public health. The group's report lists 27 actions the industry could take to decrease drug prices. Among them:

  • Allow HHS to negotiate drug prices with manufacturers.
  • Allow generic drugs to reach the market sooner, and foster competition between pharmaceuticals to drive price reductions.
  • Make financial data and profit margins in the pharmaceutical industry more transparent.
  • Modify insurance benefits packages to better cover the cost of drugs and ease the burden on patients.
  • Create and promote standards of conduct for pharma companies. 

“Over the past several decades, the biopharmaceutical sector in the United States has been successful in developing and delivering effective drugs for improving health and fighting disease,” said Norman Augustine, former chairman of the National Academy of Engineering and chair of the committee that conducted the study and wrote the report, in an announcement. “However, high and increasing costs of prescription drugs coupled with the broader trends in overall medical expenditures ... are unsustainable to society as a whole."