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CMS calls for innovative payment models for new cancer treatment and other therapies

The Food and Drug Administration on Wednesday approved acute lymphoblastic leukemia treatment Kymriah, that comes with a $475,000 price tag.

Susan Morse, Senior Editor

Credit: NovartisCredit: Novartis

As hospitals gear up to treat childhood leukemia using new gene therapy, the Centers for Medicare and Medicaid Services said it is exploring the development of payment models for this and other potentially life-saving treatments.

The U.S. Food and Drug Administration on Wednesday approved Kymriah for use in acute lymphoblastic leukemia. It has a $475,000 price tag.

[Also: American Hospital Association urges CMS to delay cuts to Medicaid disproportionate share hospital payments]

To tie cost to value and potentially lower the price of new treatment options, CMS said it is working with stakeholders, including state officials, on innovative payment arrangements. These arrangements may, for example, include outcome-based pricing for medicines in relation to clinical outcomes.

The Center for Medicare and Medicaid Innovation will aim to identify and alleviate regulatory barriers in Medicare and Medicaid as may be necessary to test payment and service delivery models that involve value-based payment arrangements, CMS said.

[Also: CMS targets providers that have high error rates in new claims processing, fraud reviews]

CMS will be issuing future guidance to explain how pharmaceutical manufacturers can engage in innovative payment arrangements and will continue to work with states on other options, as well help them manage the cost of new therapies and cures, the agency said.

"CMS congratulates all of the scientists and researchers involved in the development of Kymriah (tisagenlecleucel)," said CMS Administrator Seema Verma. "Innovations like this reinforce our belief that current healthcare payment systems need to be modernized in order to ensure access to new high-cost therapies, including therapies that have the potential to cure the sickest patients. Improving payment arrangements is a critical step towards fulfilling President Trump's promise to lower the cost of drugs."

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