Incorporation of Value-Based Payment Agreements into the Calculation of Medicaid Drug Rebates

enorman@mit.eduFoCUS, Research Briefs

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Value-Based Payment (VBP) agreements will play an important role in mitigating uncertainty in durable therapies, where it is unclear whether a large upfront payment is justified based on limited clinical data regarding magnitude and durability of benefits. Current Medicaid Drug Rebate regulations create significant uncertainty and financial exposure for manufacturers contemplating these agreements, as the current regulations are not designed for variable payments. The goal of this research brief is to identify alternative calculations of the Medicaid Drug Rebate for VBP agreements that address the needs of both manufacturers and the Medicaid program.

Download FoCUS Research Brief 2018F201v032

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