Open Access. Powered by Scholars. Published by Universities.®

Law Commons

Open Access. Powered by Scholars. Published by Universities.®

Articles

2018

Medicaid

Public Law and Legal Theory

University of Michigan Law School

Articles 1 - 1 of 1

Full-Text Articles in Law

Innovative Contracting For Pharmaceuticals And Medicaid’S Best-Price Rule, Nicholas Bagley Feb 2018

Innovative Contracting For Pharmaceuticals And Medicaid’S Best-Price Rule, Nicholas Bagley

Articles

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 newpricing 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 …