• DOI:10.1215/03616878-4249796
• Corpus ID: 3598090

Innovative Contracting for Pharmaceuticals and Medicaid's Best-Price Rule.

@article{Sachs2018InnovativeCF,
  title={Innovative Contracting for Pharmaceuticals and Medicaid's Best-Price Rule.},
  author={Rachel Sachs and Nicholas Bagley and Darius N. Lakdawalla},
  journal={Journal of health politics, policy and law},
  year={2018},
  volume={43 1},
  pages={
          5-18
        }
}

• R. Sachs, Nicholas Bagley, D. Lakdawalla
• Published 1 February 2018
• Medicine
• Journal of health politics, policy and law

In recent years, drug manufacturers and private payers have expressed interest in novel pricing models that more closely link a drug's price to its value. Indication-based pricing, outcome-based pricing, drug licenses, and drug mortgages have all been discussed as alternatives to paying strictly for volume. Manufacturers and payers have complained, however, that Medicaid's "best-price rule" inhibits their ability to enter into these new pricing arrangements. This article examines the best-price rule and assesses to what extent, if any, it might frustrate the goal of paying for value. We conclude that the best-price rule is not as serious a problem as it is sometimes made out to be but that it is also not simply a convenient excuse for refusing to try something new. The law here is complex, and moving to a pay-for-value model for drugs will require close coordination among manufacturers, payers, and regulators.