CMS Calls for Innovative Payment Models

New drug approval highlights the need for value-based payment models for Medicare and Medicaid.

In light of the approval of tisagenleclucel (Kymirah) for patients with pediatric and younger patients with leukemia, the Centers for Medicare & Medicaid Services (CMS) published a press release calling for novel payment models and arrangements.

Tisagenlecleucel is a personalized genetically-modified autologous T cell immunotherapy designed to harness a patient’s T cells to kill leukemia cells with CD19 antigens on the surface. This is the first gene therapy approved in the United States for the condition.

Due to this historic approval, the CMS is looking to explore the continued development of innovative payment models and arrangements for life-saving drugs, such as tisagenlecleucel, according to the release.

“CMS congratulates all of the scientists and researchers involved in the development of Kymriah (tisagenlecleucel),” said CMS Administrator Seema Verma. “Innovations like this reinforce our belief that current healthcare payment systems need to be modernized in order to ensure access to new high-cost therapies, including therapies that have the potential to cure the sickest patients. Improving payment arrangements is a critical step towards fulfilling President Trump’s promise to lower the cost of drugs.”

The CMS reports they are currently working with stakeholders, such as state officials, to explore potential avenues to implement unprecedented payment arrangements, which could include outcomes-based pricing for drugs.

Additionally, the CMS will be providing future guidance on how pharmaceutical manufacturers can partake in innovative payment models. The CMS said they will also work with states on other ways to manage the cost of novel drugs, according to the release.

The agency will continue to pursue pricing arrangements that mirror the value provided for patients. The CMS will also aim to identify and change regulatory barriers for Medicare and Medicaid to explore payment and service models that reflect value-based reimbursement, according to the release.

Medicare and Medicaid should aim for incentives to achieve optimal health outcomes at lower costs through flexibility and simplification. The CMS states they are working to create these incentives, while also expanding access to high-value healthcare, according to the CMS.