S. 1637 — MVP Act

This section codifies the treatment of value-based purchasing arrangements—payment models that tie manufacturer reimbursements for covered outpatient drugs to patient health outcomes (as defined in 42 C.F.R. §447.502)—in the Medicaid Drug Rebate Program (SSA §1927). Specifically, it (1) permits multiple best price points for a single dosage form and strength of a drug under such an arrangement if offered to all states; (2) includes in average manufacturer price (AMP) calculations any refunds, rebates, or payment reductions triggered by failure to achieve defined outcomes under the arrangement (including for non-retail drugs such as inhalations, infusions, instillations, implants, or injectables); and (3) deems installment payments under such arrangements as fully paid in the first installment for AMP purposes. The Secretary of Health and Human Services must implement these changes through rulemaking within 180 days of enactment.

This section modifies the calculation of average sales price (ASP) for Medicare Part B drugs and biologics by excluding, from such ASP, any remuneration under value-based purchasing arrangements (i.e., payment arrangements tied to performance or clinical outcomes) that is excluded from the average manufacturer price (AMP) under current law, provided the manufacturer elects to report multiple best price points for the drug. (Thus, this aligns ASP reporting with AMP exclusions for these arrangements, potentially lowering Medicare Part B reimbursement rates for affected drugs.)

This section directs the Secretary of Health and Human Services, not later than 180 days after enactment, to issue guidance to state Medicaid agencies on entering value-based purchasing arrangements (i.e., arrangements tying manufacturer payments to drug performance outcomes, as defined in SSA §1927(k)(12)) with manufacturers for drugs or biological products provided as part of, or incident to, inpatient hospital services under Medicaid plans (or waivers) where such drugs are reimbursed separately from hospital payments. (Thus, the guidance enables multi-state agreements with manufacturers that permit fund transfers between states to ensure out-of-state Medicaid enrollees are treated as receiving such drugs in their state of residence.)

This section establishes a new exception (safe harbor) under the anti-kickback statute (42 U.S.C. 1320a-7b(b)(3)) for remuneration provided by a manufacturer, or third party on behalf of a manufacturer, to a state under a Medicaid value-based purchasing arrangement (as defined in SSA §1927(k)(12)) when a patient fails to achieve outcomes or measures specified in the arrangement following administration of a covered outpatient drug (as defined in SSA §1927(k)(2)). (The anti-kickback statute generally prohibits offering or accepting remuneration to induce or reward referrals for services or items reimbursable by federal health care programs.) It further requires the HHS Inspector General to implement this exception through notice-and-comment rulemaking not later than 180 days after enactment.

This section directs the Comptroller General of the United States to conduct a study on value-based purchasing arrangements (as defined in section 1927(k)(12) of the Social Security Act), including their effects on patient access to covered outpatient drugs, patient outcomes, overall health system costs, and costs for patients in federal health care programs. The study must (1) examine the impact of this Act on access to transformative therapies (including rare disease gene therapies), mitigation of socioeconomic disparities in drug access through Medicaid's use of commercial pricing structures, compliance and effects on the Medicaid drug rebate program, 340B drug pricing program, and Medicare Part B, Medicaid expenditures, and prices in states not using such arrangements; (2) analyze types of value-based purchasing pricing structures, identifying which perform well on price and implementation ease and which need improvement; and (3) assess potential long-term savings for states entering such arrangements. The Comptroller General must submit a report on the study to Congress by June 30, 2029.