Bipartisan Bill Would Allow Value-Based Drug Payments

Insurers and hospitals will be allowed to pay drugmakers based on the effectiveness of their products, if a bipartisan Senate bill that amends the Social Security Act is passed.

Under current law, insurers, hospitals and clinics are limited in their ability to pay for drugs or devices based on proven effectiveness. The Patient Affordability, Value and Efficiency Act, sponsored by Sens. Mark Warner (D-Va.) and John Cassidy (R-La.) would create “narrowly tailored exemptions” allowing drugmakers to make performance-linked payment deals with insurers.

“With input from experts and key stakeholders, we’ll be able to ensure that pharmaceutical companies and medical device manufacturers are incentivized to develop more effective treatments at a better price,” Warner said.