MVP Act
Bill: H.R.7389 | Sponsor: Rep. Schrader, Kurt (D-OR)
Policy area: Health

Summary:
Medicaid VBPs for Patients Act or the MVP Act
This bill provides statutory authority for regulations that allow for the use of varying best price points under value-based purchasing arrangements for purposes of the Medicaid Drug Rebate Program. (Value-based purchasing arrangements refer to arrangements in which the price of a drug is linked to clinical outcomes; such arrangements are particularly used for new high-cost treatments, such as gene therapies.)
The Government Accountability Office must study the impact of value-based purchasing arrangements on federal health care programs, including with respect to the bill's changes.

To amend title XIX of the Social Security Act to codify value-based 
purchasing arrangements under the Medicaid program and reforms related 
  to price reporting under such arrangements, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicaid VBPs for Patients Act'' or 
the ``MVP Act''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) Value-based payment (VBP) arrangements are a critical 
        component of a modernized reimbursement system. By codifying 
        elements of the recently finalized ``multiple best price'' 
        policies of the Centers for Medicare & Medicaid Services, 
        Congress is enshrining a sustainable and flexible payment 
        approach for innovative treatments and cures.
            (2) Many of these treatments, including gene therapies, are 
        different from traditional pharmaceutical and biologic products 
        in that they can offer long-lasting--sometimes lifelong--
        benefits for patients and long-term value for the health care 
        system alike.
            (3) There are hundreds of innovative, curative, and life-
        changing treatments currently in development in the United 
        States. However, the current reimbursement structure was not 
        designed with these therapies in mind, and allowing for 
        innovative payment arrangements will spur greater development 
        and access to future cures and treatments.
            (4) Medicaid is currently losing out on innovative ways to 
        ensure patients have access to these treatments, while private 
        payors continue to see the value provided through flexible 
        payment arrangements.
            (5) VBP arrangements include the ability to pay based on 
        evidence-based outcomes and, over time, spreading the risk 
        across all entities involved in the contract and ensuring that 
        these often costly treatments are accessible.
            (6) Evidence-based outcomes can demonstrate decreased cost 
        to the health system and to patients, including reduced 
        hospitalizations and lower utilization of other health care 
        expenditures, including lab work, other medications, and office 
        visits.
            (7) By allowing VBPs in Medicaid, the health care system 
        will continue to move towards quality over quantity, holding 
        manufacturers and providers accountable for the best treatment 
        for every patient.

SEC. 3. CODIFYING VALUE-BASED PURCHASING ARRANGEMENTS UNDER MEDICAID 
              AND REFORMS RELATED TO PRICE REPORTING UNDER SUCH 
              ARRANGEMENTS.

    (a) Codifying the VBP Rule.--The revision to section 447.505(a) of 
title 42, Code of Federal Regulations related to the inclusion of 
varying best price points available under a value-based purchasing 
arrangement (as defined in section 1927(k)(12) of the Social Security 
Act (42 U.S.C. 1396r-8(k)(12), as added by subsection (d) of this 
section) for a single dosage form and strength of a covered outpatient 
drug if a manufacturer offers such pricing structure to all States, as 
published by the Secretary of Health and Human Services on December 31, 
2020 (85 Federal Register 87000), shall have the force and effect of 
law.
    (b) Quarterly Reporting Obligation.--
            (1) In general.--Section 1927(b)(3)(A) of the Social 
        Security Act (42 U.S.C. 1396r-8(b)(3)(A)) is amended--
                    (A) in clause (iv), by striking at the end ``and'';
                    (B) in clause (v), by striking at the end the 
                period and inserting ``; and'';
                    (C) by inserting after clause (v) the following new 
                clause:
                            ``(vi) for calendar quarters beginning on 
                        or after July 1, 2022, in conjunction with 
                        reporting required under clause (i), in the 
                        case of a covered outpatient drug that is sold 
                        under a value-based purchasing arrangement (as 
                        defined in subsection (k)(12)) made available 
                        by the manufacturer to a State plan--
                                    ``(I) the pricing structure for 
                                such drug based on pre-defined outcomes 
                                or measures specified in such value-
                                based purchasing arrangement; and
                                    ``(II) the best price for such 
                                covered outpatient drug outside of a 
                                value-based purchasing arrangement, 
                                which in the event such drug is sold 
                                exclusively through such an 
                                arrangement, means the lowest price 
                                available net of any discounts or 
                                offsets that are unrelated to a refund, 
                                rebate, reimbursement, free item, 
                                withholding, or repayment made under a 
                                value-based purchasing arrangement for 
                                such drug.''; and
                    (D) by adding at the end of the flush left matter 
                at the end the following new sentence: ``Information 
                reported with respect to a rebate period under clause 
                (i)(I) relating to average manufacturer price and 
                clause (i)(II) relating to best price shall be updated 
                for such rebate period if, subsequent to the date such 
                information was reported, cumulative discounts, 
                rebates, or other arrangements adjust such average 
                price actually realized or best price available to the 
                extent that such cumulative discounts, rebates, or 
                other arrangements are not excluded under this section 
                from the determination of average manufacturer price or 
                best price.''
            (2) Rules of construction.--Nothing in the amendments made 
        by paragraph (1) shall be construed as--
                    (A) requiring--
                            (i) a State to enter into a value-based 
                        purchasing arrangement with a manufacturer for 
                        a covered outpatient drug; or
                            (ii) a manufacturer to enter into a value-
                        based purchasing arrangement with a State for a 
                        covered outpatient drug;
                    (B) prohibiting a manufacturer from treating a 
                value-based purchasing arrangement as a bundled sale; 
                or
                    (C) precluding the execution of a supplemental 
                rebate agreement, as provided in section 1927(a)(1) of 
                the Social Security Act (42 U.S.C. 1396r-8(a)(1)), for 
                a covered outpatient drug sold under a value-based 
                purchasing arrangement.
    (c) Definition of Average Manufacturer Price.--Section 1927(k)(1) 
of the Social Security Act (42 U.S.C. 1396r-8(k)(1)) is amended--
            (1) in subparagraph (B)(i)--
                    (A) in subclause (IV), by striking at the end 
                ``and'';
                    (B) in subclause (V), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subclause:
                                    ``(VI) in accordance with 
                                subsection (b)(3)(A)(vi), with respect 
                                to such covered outpatient drug that is 
                                sold under a value-based purchasing 
                                arrangement (as defined in paragraph 
                                (12)) during the rebate period--
                                            ``(aa) a refund, rebate, 
                                        reimbursement, or free goods 
                                        from the manufacturer or third 
                                        party on behalf of the 
                                        manufacturer; or
                                            ``(bb) the withholding or 
                                        reduction of a payment to the 
                                        manufacturer or third party on 
                                        behalf of the manufacturer;
                                that is triggered by a patient who 
                                fails to achieve outcomes or measures 
                                defined under the terms of such value-
                                based purchasing arrangement during the 
                                period for which such agreement is 
                                effective.''; and
            (2) by adding at the end the following new subparagraph:
                    ``(D) Special rule for certain value-based 
                purchasing arrangements.--For purposes of subparagraph 
                (A), in determining the average price paid to the 
                manufacturer for a covered outpatient drug that is sold 
                under a value-based purchasing arrangement (as defined 
                in paragraph (12)) that provides that payment for such 
                drug is made in installments over the course of such 
                agreement, such price shall be determined as if the 
                aggregate price per the terms of the agreement was paid 
                in full in the first installment during the rebate 
                period.''.
    (d) Definition of Value-Based Purchasing Arrangement.--Section 
1927(k) of the Social Security Act (42 U.S.C. 1396r-8(k)) shall be 
amended by adding at the end the following paragraph:
            ``(12) Value-based purchasing arrangement.--The term 
        `value-based purchasing arrangement' means an arrangement or 
        agreement intended to align pricing or payments to an observed 
        or expected therapeutic or clinical value in a select 
        population and includes--
                    ``(A) evidence-based measures, which substantially 
                link the cost of a covered outpatient drug to existing 
                evidence of effectiveness and potential value for 
                specific uses of that product; or
                    ``(B) outcomes-based measures, which substantially 
                link payment for the covered outpatient drug to that of 
                the drug's actual performance in patient or a 
                population, or a reduction in other medical 
                expenses.''.
    (e) Effective Date.--The amendments made by this section shall 
apply beginning on July 1, 2022.

SEC. 4. REMUNERATION IN FEDERAL HEALTH CARE PROGRAMS.

    (a) In General.--Section 1128B(b)(3) of the Social Security Act (42 
U.S.C. 1320a-7b(b)(3)) is amended--
            (1) in subclause (J)--
                    (A) by moving the left margin of such subparagraph 
                2 ems to the left; and
                    (B) by striking ``and'' after the semicolon at the 
                end;
            (2) in subclause (K)--
                    (A) by moving the left margin of such subparagraph 
                2 ems to the left; and
                    (B) by striking the period at the end and inserting 
                ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(L) any remuneration provided by a manufacturer 
                or third party on behalf of a manufacturer to a plan 
                under a value-based purchasing arrangement (as defined 
                in section 1927(k)(12)) in the case a patient fails to 
                achieve outcomes or measures defined in such 
                arrangement following the administration of a covered 
                outpatient drug (as defined in section 1927(k)(2)).''.
    (b) Effective Date.--The amendments made by this section shall 
apply beginning on July 1, 2022.

SEC. 5. GAO STUDY AND REPORT ON USE OF VALUE-BASED PURCHASING 
              ARRANGEMENTS.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study on the extent to which value-based purchasing 
arrangements (as defined in section 1927(k)(12) of the Social Security 
Act (42 U.S.C. 1396r-8(k)(12)) facilitate patient access to covered 
outpatient drugs, improve patient outcomes, lower overall health system 
costs, and lower costs for patients in Federal health care programs. In 
conducting such study, the Comptroller General shall--
            (1) study the impact of this Act on--
                    (A) access to transformative therapies, including 
                rare disease gene therapies, generally;
                    (B) mitigating socioeconomic disparities in 
                accessing covered outpatient drugs sold under value-
                based purchasing arrangements through its requirement 
                that State Medicaid programs have access to the same 
                value-based purchasing arrangement pricing structure 
                that are available in the commercial market for such 
                drugs; and
                    (C) the Medicaid drug rebate program under section 
                1927 of the Social Security Act (42 U.S.C. 1396r-8), 
                the 340B drug pricing program under section 340B of the 
                Public Health Service Act (42 U.S.C. 256b), and part B 
                of title XVIII of the Social Security Act (42 U.S.C. 
                1395j et seq.), including compliance with such 
                programs; and
            (2) using data submitted pursuant to clause (vi) of section 
        1927(b)(3)(A) of the Social Security Act (42 U.S.C. 1396r-
        8(b)(3)(A)), as added by section 3 of this Act, analyze all the 
        types of value-based purchasing arrangement pricing structures, 
        which structures are working well (as measured by price and 
        ease of implementing), and which need improvement.
    (b) Report.--Not later than June 30, 2027, the Comptroller General 
of the United States shall submit to Congress a report containing the 
results of the study conducted under subsection (a).
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