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The cost of medications continues to rise, spurred in part by the introduction of new and costly drug therapies. These increased costs have caused policymakers, public payers (i.e., Medicare and Medicaid), and commercial health insurers to closely examine the results achieved by such therapies and consider the growing disparities in drug access and outcomes. The Inflation Reduction Act (IRA) — passed last summer — included provisions to introduce drug price negotiations in Medicare. Policymakers also have proposed other policies, including patent reforms, international reference pricing, and out-of-pocket spending caps.
One other potential vehicle for improving access to and benefit from pharmaceutical drugs is using value-based payment (VBP) models, which tie payment for delivery of health services to outcomes on cost, quality, and equity of care.
Promise of VBP Models to Encourage Appropriate and Equitable Use of Drugs
VBP models can change how health care is paid for, with the goal of delivering high-quality, efficient health care aimed at treating the whole person. These payment models began to spread widely in 2010; evidence to date demonstrates modest cost savings and quality improvements. The Centers for Medicare and Medicaid Services (CMS) has set the ambitious goal of having all Medicare beneficiaries served by VBP models by 2030.