Just as ASP has created this situation for generics, it has likewise affected the biosimilar market. Similar to the addition of generics to the marketplace, the introduction of biosimilars is expected to lower prices.
Because of the benefits, described throughout this paper, inherent portions of the ASP methodology are worth preserving or imitating in future reimbursement methodologies. Alternative Reimbursement Methodology With the recent focus on drug price controls, such as the International Pricing Index Model, and criticism of the current ASP reimbursement method, we investigated alternative ASP-based reimbursement methods to determine whether they are worth pursuing.
The objectives we desired with these alternatives included:. Methods Current proposed alternative methodologies to ASP include cap models, tiered models, and value frameworks. Brief definitions of these strategies are provided in Table 1. We used InfoDive, a strategic financial intelligence solution, to examine practice sites of varying sizes that reported medical claims information on patients covered by Medicare or Medicare Advantage from January to June The patients saw a medical oncologist or hematologist within the observation period.
Similarly, the SD 3 method established thresholds utilizing the average ASP per administration claim and then considered standard deviations from that average. Depending on how many standard deviations from average, the claim was determined the thresholds applied and the reimbursement add-on.
Details for these models are further illustrated in Table 2. Other tiered or capped models were evaluated but are not presented due to their failure to provide the desired outcomes.
Results The reimbursement based on the proposed methodologies for is shown in Figure 5. Each model aff ected drug categories differently relative to ASP 6. The SD 3 model had the largest effect on the targeted therapy category, which represents some of the greatest costs of oncology care; the effect of the fixed tier model on these categories distributed the add-on to incentivize the use of lower-cost drugs, such as chemotherapy and supportive care.
Practice settings were divided into 3 sizes: those with 5 or fewer medical doctors MDs , those with 6 to 10 MDs, and those with 10 or more MDs. The models affected each practice size differently. The average reimbursement per administration is shown in Table 3. Finally, the impact of each model on the top 30 drugs based on total ASP and claim volume were evaluated. The results are shown in Table 4. Our research showed that 2 alternative methods, 1 based on tiered reimbursement and 1 on average reimbursement and standard deviation, were able to provide the benefits of ASP 6, provide appropriate reimbursement to various sizes of oncology practices, and curb the growth rate of claims over time.
These methodologies provide information for future methods that use ASP as their basis and build upon this construct to provide reasonable rates for payers and sustainability for practices of different sizes, ultimately resulting in optimal patient care. It has tempered the overall growth of Part B expenditures and met the demands of an increasingly cost-concerned society, as well as a defensive medical community and pharmaceutical industry.
As the oncology community expects more value from drugs reimbursed through Part B, it is imperative to maintain the beneficial attributes of ASP and incorporate them into future reimbursement models. Otherwise, community oncology practices may no longer be able to acquire life-saving treatments during any given Medicare reimbursement period.
Incorporating a reimbursement model that engenders strong constraints rather than regulating absolutely allows for both patient and provider benefits. For the patient, such a model enables them, in conjunction with their provider, to remain a key stakeholder in determining clinical desirability weighed against financial risk. For providers, it allows the medical community to continue to align their desire for personalized or precision-based treatment, clinical experimentation, and clinical research with the multifaceted costs or savings of any given deviation from common standards by spreading the direct and indirect cost or benefit of a given variance across a range of participants.
Despite the difficulty of experimental design in public policy—based research, it is imperative moving forward that decisions regarding changes to Medicare Part B reimbursement be based upon empiric data. Currently, actuarial evidence rather than population-based data is utilized to estimate changes in price trends and adjustments to reimbursement. Additionally, recent criticisms of ASP are generally based on theoretical models; they lack the incorporation of confounding factors such as the uptake of B drug pricing, continued changes in pricing, and orphan drugs launching at high prices but then expanding to additional indications.
Overall, ASP is a market-based tool that can be leveraged in the future to create a sustainable reimbursement model that is beneficial to patients, payers, and providers. Weidner Intrinsiq. CMS fast facts. July Updated March 12, Chapter 2: The next generation of Medicare beneficiaries.
June Accessed October 17, Report to the Congress: Medicare and the health care delivery system. A data book: health care spending and the Medicare program. J Oncol Pract. Trends in weighted average sales prices for prescription drugs inMedicare Part B, The Moran Company.
December Lang K. Medicare Monday:what is ASP? PhRMA Catalyst. September 28, Accessed October 21, Federal Register. November 23, Accessed October 18, Does Medicare reimbursement drive up drug launchprices? Rev Econ Stat. HHS blueprint to lower drug prices and reduce out-of-pocket costs. May 16, Barlas S. LaPointe J. Potential Medicare reimbursement demo to lower Part B drug prices. Revcycle Intelligence.
October 26, Accessed February 11, Is tiered provider reimbursement on the horizon for Medicare Part B? June 13, Mathews, executive director, Medicare Payment Advisory Commission. Accessed January 15, Did changes in drug reimbursement after the Medicare Modernization Act affect chemotherapy prescribing?
J Clin Oncol. Prevalence of off-label use and spending in among patent-protected chemotherapies in a population-based cohort of medical oncologists. Report to the Congress: effects of Medicare payment changes on oncology services. January Doing more for more: unintended consequences of financial incentives for oncology specialty care. J Natl Cancer Inst. Physician agency and competition: evidence from a major change to Medicare chemotherapy reimbursement policy.
National Bureau of Economic Research. N Engl J Med. Health Aff Millwood. Learn more about America's biopharmaceutical companies and how they seek to improve patients' lives. We Work For Health aims to increase awareness by uniting workers throughout the industry. Patent protection should always be considered by an inventor during the initial stages of their invention.
Working to spread awareness and education about the importance of secure drug disposal. From accessing medicines to intellectual property to drug safety, PhRMA is devoted to advancing public policies that support innovative medical research, improve treatments and yield real results. ASP is a market-based price that reflects the weighted average of all manufacturer sales prices and includes all rebates and discounts that are privately negotiated between manufacturers and purchasers with the exception of Medicaid and certain federal discounts and rebates.
This methodology mirrors reimbursement for physician-administered drugs in the commercial market. The Part B reimbursement methodology includes a six percent add-on payment to account for variability in provider acquisition costs and the additional costs associated with the complexity of Part B drugs, many of which are used to treat serious illnesses such as cancer, cerebral palsy, and multiple sclerosis.
The six percent add-on helps cover:. The structure of the Part B drug benefit enables the program to capture the power of the market to save Medicare and beneficiaries money while maintaining adequate reimbursement for new treatments. An analysis by the Centers for Medicare and Medicaid Services found that prices for most higher volume drugs changed two percent or less, and prices for 17 of the top 50 drugs decreased.
Overall, average price growth in Medicare Part B is currently less than medical inflation. Spending on Part B drugs provided by physicians and hospital outpatient departments represents just 3 percent of total Medicare expenditures and has remained flat as a share of total expenditures in Part B 8 percent. Please be advised that this page contains pixel tags. To learn more about what pixel tags are, why and how we and third parties use pixel tags, and how that use affects you, visit our privacy policy and review "1.
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