What Would (Should) CMS Do? A Debate on Options for Drug Price Negotiations


Moderator: Daniel Ollendorf, PhD, Center for the Evaluation of Value and Risk in Health, Tufts Medical Center, Boston, MA, USA
Panelists: Jane Horvath, MHSA, Horvath Health Policy, College Park, MD, USA; Sean Tunis, MD, MSc, Tufts Center for Evaluation of Value and Risk in Health, Boston, MA, USA; Steven Pearson, MD, MSc, nstitute for Clinical and Economic Review (ICER), Boston, MA, USA

Presentation Documents

ISSUE: With the passage of the Inflation Reduction Act, CMS now has the ability to directly negotiate prices with manufacturers for a limited set of drugs. Dan Ollendorf will moderate the session and present an overview of the use of summary health measures, clinical benefit ratings, and multifaceted approaches for determining drug value. Jon Campbell will focus on summary measures and present the rationale for using cost-effectiveness as a key input for price determination. Sean Tunis will discuss how clinical benefit assessment does or does not align with CMS’ historical approach to medical necessity determination. Jane Horvath will present an industry and policy perspective, and will raise questions as to whether affordability, value, or some other metric should be the driving force behind negotiations.

OVERVIEW: The Inflation Reduction Act empowers CMS to directly negotiate drug prices with manufacturers, but there is no detail on the method that will be employed to arrive at a “fair” price. There is a need for the agency to “get this right” so that the ultimate approach is deemed to be balanced and inclusive of stakeholder input, even if it is not universally embraced by all. This session will review some of the major options for measurement and communication of a candidate drug’s benefit and/or value, debate the potential merits and drawbacks of each, discuss other elements of a CMS process (e.g., deliberation by an independent committee) that may be crucial for its success, and develop a set of recommendations for how the process should be defined initially, updated and expanded, and most importantly, communicated to patients, caregivers, clinicians, and other key stakeholders.




Health Policy & Regulatory