The "Multiple Best Prices" Model: What it means, how it works, and why it may create an innovative pathway for meaningful value-based pricing arrangements

On 17 June 2020 the Centers for Medicare and Medicaid Services (CMS) issued a landmark proposed rule that supports the ability of manufacturers to offer value-based purchasing arrangements (VBPs) to the commercial market, with state Medicaid programs automatically receiving the same value-based pricing based on the same product performance measures.

The proposed rule interprets the 30-year-old "best price" (BP) statute to permit manufacturers to report multiple BPs for a therapy under the Medicaid Drug Rebate Program, if the prices are tied to a VBP, so that the Medicaid program can receive the same levels of pricing automatically through the existing statutory regime.

On Wednesday, 8 July, members of the Hogan Lovells Drug Pricing team along with KPMG Partner Rick Zimmerer and KPMG Managing Director Jennifer Lospinoso walked through CMS's proposed "multiple best prices" model. The webinar covered the following topics:

  • How the multiple best prices model could work.
  • How the Medicaid rebate formula is calculated and applied under the multiple best prices model.
  • The types of VBPs that most readily lend themselves to the multiple best prices model.
  • An exemplar commercial value-based pricing arrangement and how BP reporting and Medicaid rebates would work under the proposed model.
  • 340B considerations raised by the multiple best prices model.

To view the on-demand recording, please click here.

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