What Might a Part B IPI Model Do to Drug Innovation, Patient Care?

by Michael Parenti

On Oct. 25, 2018, the Centers for Medicare and Medicaid Services (CMS) issued an advance notice of proposed rulemaking (ANPRM) to test whether phasing down the Medicare payment amount for selected Part B drugs to more closely align with international prices leads to higher quality of care for beneficiaries and reduced expenditures for the Medicare program. To achieve this, the Center for Medicare and Medicaid Innovation (CMMI) plans to explore an International Pricing Index (IPI) model based on data from 13 comparable countries. The model would go into effect spring 2019 and evaluation would take place over a five-year period (spring 2020 to spring 2025). Payments for most Part B drugs would be lowered to drug-specific, IPI-determined rates based on a blend of average sales price (ASP) and a 30% cost reduction price.

The IPI model has the potential to lead to some of the most sweeping changes to Medicare in history. However, while the IPI model supports the goal of providing a value-based, transparent system, industry stakeholders are concerned about the impact of structural market change on patient outcomes.

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