WASHINGTON — The Trump administration gave Michigan’s Medicaid program permission to pay for drugs based in part on how well the drugs work, Centers for Medicare and Medicaid Services Administrator Seema Verma announced Wednesday.

“Michigan’s waiver will empower it to demand results from drug manufacturers in exchange for paying for medicines,” Verma said in a speech at an industry conference.

Unlock this article by subscribing to STAT Plus and enjoy your first 30 days free!


What is it?

STAT Plus is STAT's premium subscription service for in-depth biotech, pharma, policy, and life science coverage and analysis. Our award-winning team covers news on Wall Street, policy developments in Washington, early science breakthroughs and clinical trial results, and health care disruption in Silicon Valley and beyond.

What's included?

  • Daily reporting and analysis
  • The most comprehensive industry coverage from a powerhouse team of reporters
  • Subscriber-only newsletters
  • Daily newsletters to brief you on the most important industry news of the day
  • Online intelligence briefings
  • Frequent opportunities to engage with veteran beat reporters and industry experts
  • Exclusive industry events
  • Premium access to subscriber-only networking events around the country
  • The best reporters in the industry
  • The most trusted and well-connected newsroom in the health care industry
  • And much more
  • Exclusive interviews with industry leaders, profiles, and premium tools, like our CRISPR Trackr.

Leave a Comment

Please enter your name.
Please enter a comment.

  • I would appreciate it if you could try to forward this message to Ms. Verma. I have tried to get through to CMS with no response.
    Dwayne Wilson R.P. Lincoln, NE
    PBM making money from rebates from drug companies to get managed care to choose more expensive meds.
    I am a now retired pharmacist. When working as a hospital pharmacist in charge of our Employee Specialty Pharmacy.
    We became aware of a case where the PBM denied a claim for a med. The Doctor appealed as the denial, and was constantly denied. The patient was on an oral med that was controlling his Psoriatic Arthritis. Before starting this med he was having 3 or 4 hospital admissions per year, due to cellulitis from minor wounds in the area of the psoriasis.
    They gave the doctor three therapeutic choices, each of which was more expensive by far, than the medication he was currently on that was reducing his admissions to one or none per year. The doctor then provided the patient with samples of the med that the patient had been on.
    Can you smell rebates? I contacted the hospital administration of the situation, and suggested that they ask for transparency before renewing contract with the PBM.
    They said that they had already done so.
    I would suggest that you ask for transparency concerning the Rebates paid to the PBM.
    In my opinion these rebates are a root cause of increasing drug costs.
    Also, in my opinion, it would be better for the health plan to insist on no rebates be paid to the PBM that you choose and deal directly with the manufacturer to switch to an outcome based rebate as follows:
    What I would suggest would be a possible rebate to the parties responsible for an outcome that leads to improvement in patient’s prognosis, symptoms and a validated health assessment questionnaire.
    Before a patient starts a new medication, they take a baseline health assessment such as a SF-12 (the shortened version of the SF-36) or another validated questionnaire. Rheumatologists frequently have their own that they use, called a Rapid-3. This is shorter and easier to score, but not sure that it is actually validated like the SF-12.
    Most of the Specialty drugs are dispensed one month at a time, with generally a 3-month limit.

  • “Drug companies and the state would have to agree on the outcome measure…” If the statement is true, it will be a problem. First, the state or Medicaid program, as the purchaser of the drug or of a drug within a class of drugs, should decide what the outcome measure(s) should be. The decision should be based on current science and should include generally accepted outcome measures dealing with morbidity and mortality improvements, side effect and overall safety profile and cost.

    Second, if the drug companies are at the negotiating table, they will be able to bring more resources in the form of research papers, scientists, lawyers and inducements( we won’t go there).It’s clear to me that the playing field is not level when the drug companies deal with the FDA with its complaints of chronic overwork and under staffing.

    In the end the drug companies have more incentives to get a drug on a formulary then a Medicaid program have to keep a drug off. It will be interesting to see how this ruling plays out and whether or not it saves any money

Sign up for our Daily Recap newsletter

A roundup of STAT’s top stories of the day in science and medicine

Privacy Policy