September 26, 2019

State Efforts To Implement Innovative Prescription Drug Payment Models Face Continuing Challenges

With health care expenditures accounting for larger and larger percentages of state budgets, many states are exploring alternatives to traditional volume-based payments for prescription drugs.  These alternatives include value-based pricing models that tie payments to observed outcomes.  A September 2019 report by Duke University examined these efforts and found the primary challenges in launching alternative payment models are operational factors, such as the availability of limited data to identify and assess outcome measures and the increased complexity in administering such models.  The report also concludes that the lack of clarity around what is and isn’t permissible under the current law and regulations hinders the ongoing drug payment reform efforts.