Council for Affordable Health Coverage asks organizations to sign onto Senate Finance Committee Letter

The Council for Affordable Health Coverage is asking organizations to sign onto a letter to the Senate Finance Committee in support of including bipartisan legislation that removes barriers to value-based payment arrangements. The text of the letter is below. To sign your organization onto the letter, contact by June 28, 2019.

June XX, 2019

Senator Chuck Grassley
Chairman, Senate Finance Committee
219 Dirksen Senate Office Building
Washington, DC 20510

Senator Ron Wyden
Ranking Member, Senate Finance Committee
219 Dirksen Senate Office Building
Washington, DC 20510

Dear Chairman Grassley and Ranking Member Wyden:

The undersigned organizations write in strong support of including bipartisan legislation that removes barriers to value-based payment arrangements (VBAs), which can improve prescription drug affordability and access as part of your work to lower the costs of prescription drugs for all Americans.

As you know, our nation’s healthcare system is undergoing a monumental shift as payers move aggressively to reward value and deliver affordable, quality care to consumers. Furthermore, we are witnessing a new era in medicine with the recent approval of several transformative therapies, along with dozens more in development. Some of these products can even be administered in a single treatment, potentially providing years of benefit. Public and private payers should be provided with multiple options for coverage of these transformative therapies. Linking payment for medicine with patient-centered outcomes is a critical aspect of this continued shift to modernizing our health care system with innovative models that pay for value over volume.

Archaic laws are hindering these private sector innovations from flourishing in federal health programs such as Medicare and Medicaid. This shortchanges taxpayers and, most importantly, patients. As bipartisan leaders in health care policy, you are uniquely positioned to support changes this flawed status quo through commonsense solutions such as:

• Offering a safe harbor from the anti-kickback statute for VBAs: Enacted in 1972, the Anti-Kickback Statute (AKS) serves an important purpose in federal health programs, but its broad interpretation also has been used to prevent the adoption of VBAs. A list of exceptions – or “safe harbors” – to the statute exist, but none explicitly protect these innovative payment models from undue penalties. AKS also hinders drug manufacturers and other entities from providing physicians and patients with adherence support programs designed to improve patient health outcomes in VBAs. We support including provisions in any future VBA legislation that would palliate these arrangements from anti-kickback regulations that tie reimbursement for medications to agreed-upon patient outcomes.

• Providing an exemption for VBAs from Medicaid’s “Best Price” and Average Manufacturer Price Rules: As lawmakers know, the Medicaid best price law requires drug manufacturers to charge the Medicaid program the lowest or “best” price they negotiate with any other buyer – a figure that is also factored into a drug’s Average Manufacturer Price (AMP). While laudable in its goal of providing access to our country’s most vulnerable population, the best price law has the unintended consequence of creating artificial pricing floors that eliminate incentives for VBAs that could lower prescription drug costs even further; benefitting patient out-of-pocket costs and lowering overall system expenditures in turn saving the federal government taxpayer dollars.

The debate over prescription drug affordability is among the most biting in Washington, however, these policies represent vetted, consensus-based solutions that enjoy broad support across industry sectors and deserve swift consideration and action on Capitol Hill.

The undersigned represents a diverse cross-section of stakeholders who believe encouraging value-based arrangements in Medicare and Medicaid provides an avenue for real solutions that will improve prescription drug affordability and access.

We are eager to work with your offices on improving access to value-based arrangements for prescription drugs in the near term and urge you not to delay in this important effort.

Thank you for your careful consideration of these comments and your service to all Americans.


The Council for Affordable Health Coverage