Bill Summary
The GENE Therapy Payment Act allows states to pay for potentially curative treatments through risk-sharing value-based agreements, which must be approved by the Secretary. The Secretary is responsible for determining appropriate clinical parameters and issuing guidance to states on notifying them of changes in enrollees. The Secretary is also required to assess the agreements and report to Congress on their impact. This segment also outlines the rules for terminating agreements and includes conforming amendments to other sections of the Social Security Act.
Possible Impacts
1. A person with a rare genetic disease will now have access to a potentially curative treatment through their state's Medicaid plan, thanks to the GENE Therapy Payment Act.
2. A state will be able to make installment payments for a new, one-time use drug that could greatly improve the quality of life for individuals living with chronic illnesses, as approved by the Secretary under a risk-sharing value-based agreement.
3. The Secretary will closely monitor and assess the effectiveness of these agreements to determine if they result in greater or lesser federal spending, ultimately affecting the availability of funds for other healthcare programs.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5882 Introduced in House (IH)]
<DOC>
116th CONGRESS
2d Session
H. R. 5882
To amend title XIX of the Social Security Act to provide States with
the option under the Medicaid program to pay for covered outpatient
drugs through risk-sharing value-based agreements, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 12, 2020
Mr. Schrader (for himself, Mr. Marshall, Mr. Crow, Mr. Mullin, Mr.
Bera, Mr. Kelly of Pennsylvania, and Mr. Schweikert) introduced the
following bill; which was referred to the Committee on Energy and
Commerce
_______________________________________________________________________
A BILL
To amend title XIX of the Social Security Act to provide States with
the option under the Medicaid program to pay for covered outpatient
drugs through risk-sharing value-based agreements, 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 ``Generating Effective and Novel
Evidence for Therapy Payment Act'' or ``GENE Therapy Payment Act''.
SEC. 2. RISK-SHARING VALUE-BASED PAYMENT AGREEMENTS FOR COVERED
OUTPATIENT DRUGS UNDER MEDICAID.
(a) In General.--Section 1927 of the Social Security Act (42 U.S.C.
1396r-8) is amended by adding at the end the following new subsection:
``(l) State Option To Pay for Covered Outpatient Drugs Through
Risk-Sharing Value-Based Agreements.--
``(1) In general.--Beginning January 1, 2022, a State shall
have the option to pay (whether on a fee-for-service or managed
care basis) for covered outpatient drugs that are potentially
curative treatments intended for one-time use that are
administered to individuals under this title by entering into a
risk-sharing value-based payment agreement with the
manufacturer of the drug in accordance with the requirements of
this subsection.
``(2) Secretarial approval.--
``(A) In general.--A State shall submit a request
to the Secretary to enter into a risk-sharing value-
based payment agreement, and the Secretary shall not
approve a proposed risk-sharing value-based payment
agreement between a State and a manufacturer for
payment for a covered outpatient drug of the
manufacturer unless the following requirements are met:
``(i) Manufacturer has in effect a rebate
agreement and is in compliance with all
applicable requirements.--The manufacturer has
a rebate agreement in effect as required under
subsections (a) and (b) of this section and is
in compliance with all applicable requirements
under this title.
``(ii) No increase to projected net federal
spending.--
``(I) In general.--The Chief
Actuary certifies that the projected
payments for each covered outpatient
drug under a proposed risk-sharing
value-based payment agreement is not
expected to result in greater estimated
Federal spending under this title than
the net Federal spending that would
result in the absence of such
agreement.
``(II) Net federal spending
defined.--For purposes of this
subsection, the term `net Federal
spending' means the amount of Federal
payments the Chief Actuary estimates
would be made under this title for
administering a covered outpatient drug
to an individual eligible for medical
assistance under a State plan or a
waiver of such plan, reduced by the
amount of all rebates the Chief Actuary
estimates would be paid with respect to
the administering of such drug,
including all rebates under this title
and any supplemental or other
additional rebates, in the absence of
such an agreement.
``(III) Information.--The Chief
Actuary shall make the certifications
required under this clause based on the
most recently available and reliable
drug pricing and product information.
The State and manufacturer shall
provide the Secretary and the Chief
Actuary with all necessary information
required to make the estimates needed
for such certifications.
``(iii) Launch and list price
justifications.--The manufacturer submits all
relevant information and supporting
documentation necessary for pricing decisions
as deemed appropriate by the Secretary, which
shall be truthful and non-misleading, including
manufacturer information and supporting
documentation for launch price or list price
increases, and any applicable justification
required under section 1128L.
``(iv) Confidentiality of information;
penalties.--The provisions of subparagraphs (C)
and (D) of subsection (b)(3) shall apply to a
manufacturer that fails to submit the
information and documentation required under
clauses (ii) and (iii) on a timely basis, or
that knowingly provides false or misleading
information, in the same manner as such
provisions apply to a manufacturer with a
rebate agreement under this section.
``(B) Consideration of state request for
approval.--
``(i) In general.--The Secretary shall
treat a State request for approval of a risk-
sharing value-based payment agreement in the
same manner that the Secretary treats a State
plan amendment, and subpart B of part 430 of
title 42, Code of Federal Regulations,
including, subject to clause (ii), the timing
requirements of section 430.16 of such title
(as in effect on the date of enactment of this
subsection), shall apply to a request for
approval of a risk-sharing value-based payment
agreement in the same manner as such subpart
applies to a State plan amendment.
``(ii) Timing.--The Secretary shall consult
with the Commissioner of Food and Drugs as
required under subparagraph (C) and make a
determination on whether to approve a request
from a State for approval of a proposed risk-
sharing value-based payment agreement (or
request additional information necessary to
allow the Secretary to make a determination
with respect to such request for approval)
within the time period, to the extent
practicable, specified in section 430.16 of
title 42, Code of Federal Regulations (as in
effect on the date of enactment of this
subsection), but in no case shall the Secretary
take more than 180 days after the receipt of
such request for approval or response to such
request for additional information to make such
a determination (or request additional
information).
``(C) Consultation with the commissioner of food
and drugs.--In considering whether to approve a risk-
sharing value-based payment agreement, the Secretary,
to the extent necessary, shall consult with the
Commissioner of Food and Drugs to determine whether the
relevant clinical parameters specified in such
agreement are appropriate.
``(3) Installment-based payment structure.--
``(A) In general.--A risk-sharing value-based
payment agreement shall provide for a payment structure
under which, for every installment year of the
agreement (subject to subparagraph (B)), the State
shall pay the total installment year amount in equal
installments to be paid at regular intervals over a
period of time that shall be specified in the
agreement.
``(B) Requirements for installment payments.--
``(i) Timing of first payment.--The State
shall make the first of the installment
payments described in subparagraph (A) for an
installment year not later than 30 days after
the end of such year.
``(ii) Length of installment period.--The
period of time over which the State shall make
the installment payments described in
subparagraph (A) for an installment year shall
not be longer than 5 years.
``(iii) Nonpayment or reduced payment of
installments following a failure to meet
clinical parameter.--If, prior to the payment
date (as specified in the agreement) of any
installment payment described in subparagraph
(A) or any other alternative date or time frame
(as otherwise specified in the agreement), the
covered outpatient drug which is subject to the
agreement fails to meet a relevant clinical
parameter of the agreement, the agreement shall
provide that--
``(I) the installment payment shall
not be made; or
``(II) the installment payment
shall be reduced by a percentage
specified in the agreement that is
based on the outcome achieved by the
drug relative to the relevant clinical
parameter.
``(4) Notice of intent.--
``(A) In general.--Subject to subparagraph (B), a
manufacturer of a covered outpatient drug shall not be
eligible to enter into a risk-sharing value-based
payment agreement under this subsection with respect to
such drug unless the manufacturer notifies the
Secretary that the manufacturer is interested in
entering into such an agreement with respect to such
drug. The decision to submit and timing of a request to
enter into a proposed risk-sharing value-based payment
agreement shall remain solely within the discretion of
the State and shall only be effective upon Secretarial
approval as required under this subsection.
``(B) Treatment of subsequently approved drugs.--
``(i) In general.--In the case of a
manufacturer of a covered outpatient drug
approved under section 505 of the Federal Food,
Drug, and Cosmetic Act or licensed under
section 351 of the Public Health Service Act
after the date of enactment of this subsection,
not more than 90 days after meeting with the
Food and Drug Administration following phase II
clinical trials for such drug (or, in the case
of a drug described in clause (ii), not later
than March 31, 2022), the manufacturer must
notify the Secretary of the manufacturer's
intent to enter into a risk-sharing value-based
payment agreement under this subsection with
respect to such drug. If no such meeting has
occurred, the Secretary may use discretion as
to whether a potentially curative treatment
intended for one-time use may qualify for a
risk-sharing value-based payment agreement
under this section. A manufacturer notification
of interest shall not have any influence on a
decision for drug approval by the Food and Drug
Administration.
``(ii) Application to certain subsequently
approved drugs.--A drug described in this
clause is a covered outpatient drug of a
manufacturer--
``(I) that is approved under
section 505 of the Federal Food, Drug,
and Cosmetic Act or licensed under
section 351 of the Public Health
Service Act after the date of enactment
of this subsection; and
``(II) with respect to which, as of
January 1, 2022, more than 90 days have
passed after the manufacturer's meeting
with the Food and Drug Administration
following phase II clinical trials for
such drug.
``(iii) Parallel approval.--The Secretary,
in coordination with the Administrator of the
Centers for Medicare & Medicaid Services and
the Commissioner of Food and Drugs, shall, to
the extent practicable, approve a State's
request to enter into a proposed risk-sharing
value-based payment agreement that otherwise
meets the requirements of this subsection at
the time that such a drug is approved by the
Food and Drug Administration to help provide
that no State that wishes to enter into such an
agreement is required to pay for the drug in
full at one time if the State is seeking to pay
over a period of time as outlined in the
proposed agreement.
``(iv) Rule of construction.--Nothing in
this paragraph shall be applied or construed to
modify or affect the timeframes or factors
involved in the Secretary's determination of
whether to approve or license a drug under
section 505 of the Federal Food, Drug, and
Cosmetic Act or section 351 of the Public
Health Service Act.
``(5) Special payment rules.--
``(A) In general.--Except as otherwise provided in
this paragraph, with respect to an individual who is
administered a unit of a covered outpatient drug that
is reimbursed under a State plan by a State Medicaid
agency under a risk-sharing value-based payment
agreement in an installment year, the State shall
remain liable to the manufacturer of such drug for
payment for such unit without regard to whether the
individual remains enrolled in the State plan under
this title (or a waiver of such plan) for each
installment year for which the State is to make
installment payments for covered outpatient drugs
purchased under the agreement in such year.
``(B) Death.--In the case of an individual
described in subparagraph (A) who dies during the
period described in such subparagraph, the State plan
shall not be liable for any remaining payment for the
unit of the covered outpatient drug administered to the
individual which is owed under the agreement described
in such subparagraph.
``(C) Withdrawal of approval.--In the case of a
covered outpatient drug that is the subject of a risk-
sharing value-based payment agreement between a State
and a manufacturer under this subsection, including a
drug approved in accordance with section 506(c) of the
Federal Food, Drug, and Cosmetic Act, and such drug is
the subject of an application that has been withdrawn
by the Secretary, the State plan shall not be liable
for any remaining payment that is owed under the
agreement.
``(D) Alternative arrangement under agreement.--
Subject to approval by the Secretary, the terms of a
proposed risk-sharing value-based payment agreement
submitted for approval by a State may provide that
subparagraph (A) shall not apply.
``(E) Guidance.--Not later than January 1, 2022,
the Secretary shall issue guidance to States
establishing a process for States to notify the
Secretary when an individual who is administered a unit
of a covered outpatient drug that is purchased by a
State plan under a risk-sharing value-based payment
agreement ceases to be enrolled under the State plan
under this title (or a waiver of such plan) or dies
before the end of the installment period applicable to
such unit under the agreement.
``(6) Treatment of payments under risk-sharing value-based
agreements for purposes of average manufacturer price; best
price.--The Secretary shall treat any payments made to the
manufacturer of a covered outpatient drug under a risk-sharing
value-based payment agreement under this subsection during a
rebate period in the same manner that the Secretary treats
payments made under a State supplemental rebate agreement under
sections 447.504(c)(19) and 447.505(c)(7) of title 42, Code of
Federal Regulations (or any successor regulations) for purposes
of determining average manufacturer price and best price under
this section with respect to the covered outpatient drug and a
rebate period and for purposes of offsets required under
subsection (b)(1)(B).
``(7) Assessments and report to congress.--
``(A) Assessments.--
``(i) In general.--Not later than 180 days
after the end of each assessment period of any
risk-sharing value-based payment agreement for
a State approved under this subsection, the
Secretary shall conduct an evaluation of such
agreement which shall include an evaluation by
the Chief Actuary to determine whether program
spending under the risk-sharing value-based
payment agreement aligned with the projections
for the agreement made under paragraph
(2)(A)(ii), including an assessment of whether
actual Federal spending under this title under
the agreement was less or more than net Federal
spending would have been in the absence of the
agreement.
``(ii) Assessment period.--For purposes of
clause (i)--
``(I) the first assessment period
for a risk-sharing value-based payment
agreement shall be the period of time
over which payments are scheduled to be
made under the agreement for the first
10 individuals who are administered
covered outpatient drugs under the
agreement except that such period shall
not exceed the 5-year period after the
date on which the Secretary approves
the agreement; and
``(II) each subsequent assessment
period for a risk-sharing value-based
payment agreement shall be the 5-year
period following the end of the
previous assessment period.
``(B) Results of assessments.--
``(i) Termination option.--If the Secretary
determines as a result of the assessment by the
Chief Actuary under subparagraph (A) that the
actual Federal spending under this title for
any covered outpatient drug that was the
subject of the State's risk-sharing value-based
payment agreement was greater than the net
Federal spending that would have resulted in
the absence of the agreement, the Secretary may
terminate approval of such agreement and shall
immediately conduct an assessment under this
paragraph of any other ongoing risk-sharing
value-based payment agreement to which the same
manufacturer is a party.
``(ii) Repayment required.--
``(I) In general.--If the Secretary
determines as a result of the
assessment by the Chief Actuary under
subparagraph (A) that the Federal
spending under the risk-sharing value-
based agreement for a covered
outpatient drug that was subject to
such agreement was greater than the net
Federal spending that would have
resulted in the absence of the
agreement, the manufacturer shall repay
the difference to the State and Federal
Governments in a timely manner as
determined by the Secretary.
``(II) Termination for failure to
pay.--The failure of a manufacturer to
make repayments required under
subclause (I) in a timely manner shall
result in immediate termination of all
risk-sharing value-based agreements to
which the manufacturer is a party.
``(III) Additional penalties.--In
the case of a manufacturer that fails
to make repayments required under
subclause (I), the Secretary may treat
such manufacturer in the same manner as
a manufacturer that fails to pay
required rebates under this section,
and the Secretary may--
``(aa) suspend or terminate
the manufacturer's rebate
agreement under this section;
and
``(bb) pursue any other
remedy that would be available
if the manufacturer had failed
to pay required rebates under
this section.
``(C) Report to congress.--Not later than 5 years
after the first risk-sharing value-based payment
agreement is approved under this subsection, the
Secretary shall submit to Congress and make available
to the public a report that includes--
``(i) an assessment of the impact of risk-
sharing value-based payment agreements on
access for individuals who are eligible for
benefits under a State plan or waiver under
this title to medically necessary covered
outpatient drugs and related treatments;
``(ii) an analysis of the impact of such
agreements on overall State and Federal
spending under this title;
``(iii) an assessment of the impact of such
agreements on drug prices, including launch
price and price increases; and
``(iv) such recommendations to Congress as
the Secretary deems appropriate.
``(8) Guidance and regulations.--
``(A) In general.--Not later than January 1, 2022,
the Secretary shall issue guidance to States seeking to
enter into risk-sharing value-based payment agreements
under this subsection that includes a model template
for such agreements. The Secretary may issue any
additional guidance or promulgate regulations as
necessary to implement and enforce the provisions of
this subsection.
``(B) Model agreements.--
``(i) In general.--If a State expresses an
interest in pursuing a risk-sharing value-based
payment agreement under this subsection with a
manufacturer for the purchase of a covered
outpatient drug, the Secretary may share with
such State any risk-sharing value-based
agreement between a State and the manufacturer
for the purchase of such drug that has been
approved under this subsection. While such
shared agreement may serve as a template for a
State that wishes to propose, the use of a
previously approved agreement shall not affect
the submission and approval process for
approval of a proposed risk-sharing value-based
payment agreement under this subsection,
including the requirements under paragraph
(2)(A).
``(ii) Confidentiality.--In the case of a
risk-sharing value-based payment agreement that
is disclosed to a State by the Secretary under
this subparagraph and that is only in effect
with respect to a single State, the
confidentiality of information provisions
described in subsection (b)(3)(D) shall apply
to such information.
``(C) OIG consultation.--
``(i) In general.--The Secretary shall
consult with the Office of the Inspector
General of the Department of Health and Human
Services to determine whether there are
potential program integrity concerns (including
issues related to compliance with sections
1128B and 1877) with agreement approvals or
templates and address accordingly.
``(ii) OIG policy updates as necessary.--
The Inspector General of the Department of
Health and Human Services shall review and
update, as necessary, any policies or
guidelines of the Office of the Inspector
General of the Department of Health and Human
Services (including policies related to the
enforcement of section 1128B) to accommodate
the use of risk-sharing value-based payment
agreements in accordance with this section.
``(9) Rules of construction.--
``(A) Modifications.--Nothing in this subsection or
any regulations promulgated under this subsection shall
prohibit a State from requesting a modification from
the Secretary to the terms of a risk-sharing value-
based payment agreement. A modification that is
expected to result in any increase to projected net
State or Federal spending under the agreement shall be
subject to recertification by the Chief Actuary as
described in paragraph (2)(A)(ii) before the
modification may be approved.
``(B) Rebate agreements.--Nothing in this
subsection shall be construed as requiring a State to
enter into a risk-sharing value-based payment agreement
or as limiting or superseding the ability of a State to
enter into a supplemental rebate agreement for a
covered outpatient drug.
``(C) FFP for payments under risk-sharing value-
based payment agreements.--Federal financial
participation shall be available under this title for
any payment made by a State to a manufacturer for a
covered outpatient drug under a risk-sharing value-
based payment agreement in accordance with this
subsection, except that no Federal financial
participation shall be available for any payment made
by a State to a manufacturer under such an agreement on
and after the effective date of a disapproval of such
agreement by the Secretary.
``(D) Continued application of other provisions.--
Except as expressly provided in this subsection,
nothing in this subsection or in any regulations
promulgated under this subsection shall affect the
application of any other provision of this Act.
``(10) Appropriations.--For fiscal year 2020 and each
fiscal year thereafter, there are appropriated to the Secretary
$5,000,000 for the purpose of carrying out this subsection.
``(11) Definitions.--In this subsection:
``(A) Chief actuary.--The term `Chief Actuary'
means the Chief Actuary of the Centers for Medicare &
Medicaid Services.
``(B) Installment year.--The term `installment
year' means, with respect to a risk-sharing value-based
payment agreement, a 12-month period during which a
covered outpatient drug is administered under the
agreement.
``(C) Potentially curative treatment intended for
one-time use.--The term `potentially curative treatment
intended for one-time use' means a treatment that
consists of the administration of a covered outpatient
drug that--
``(i) is a form of gene therapy for a rare
disease, as defined by the Commissioner of Food
and Drugs, designated under section 526 of the
Federal Food, Drug, and Cosmetic Act, and
approved under section 505 of such Act or
licensed under subsection (a) or (k) of section
351 of the Public Health Service Act to treat a
serious or life-threatening disease or
condition;
``(ii) if administered in accordance with
the labeling of such drug, is expected to
result in either--
``(I) the cure of such disease or
condition; or
``(II) a reduction in the symptoms
of such disease or condition to the
extent that such disease or condition
is not expected to lead to early
mortality; and
``(iii) is expected to achieve a result
described in clause (ii), which may be achieved
over an extended period of time, after not more
than 3 administrations.
``(D) Relevant clinical parameter.--The term
`relevant clinical parameter' means, with respect to a
covered outpatient drug that is the subject of a risk-
sharing value-based payment agreement--
``(i) a clinical endpoint specified in the
drug's labeling or supported by one or more of
the compendia described in section
1861(t)(2)(B)(ii)(I) that--
``(I) is able to be measured or
evaluated on an annual basis for each
year of the agreement on an independent
basis by a provider or other entity;
and
``(II) is required to be achieved
(based on observed metrics in patient
populations) under the terms of the
agreement; or
``(ii) a surrogate endpoint (as defined in
section 507(e)(9) of the Federal Food, Drug,
and Cosmetic Act), including those developed by
patient-focused drug development tools, that--
``(I) is able to be measured or
evaluated on an annual basis for each
year of the agreement on an independent
basis by a provider or other entity;
and
``(II) has been qualified by the
Food and Drug Administration.
``(E) Risk-sharing value-based payment agreement.--
The term `risk-sharing value-based payment agreement'
means an agreement between a State plan and a
manufacturer--
``(i) for the purchase of a covered
outpatient drug of the manufacturer that is a
potentially curative treatment intended for
one-time use;
``(ii) under which payment for such drug
shall be made pursuant to an installment-based
payment structure that meets the requirements
of paragraph (3);
``(iii) which conditions payment on the
achievement of at least 2 relevant clinical
parameters (as defined in subparagraph (C));
``(iv) which provides that--
``(I) the State plan will directly
reimburse the manufacturer for the
drug; or
``(II) a third party will reimburse
the manufacture in a manner approved by
the Secretary; and
``(v) is approved by the Secretary in
accordance with paragraph (2).
``(F) Total installment year amount.--The term
`total installment year amount' means, with respect to
a risk-sharing value-based payment agreement for the
purchase of a covered outpatient drug and an
installment year, an amount equal to the product of--
``(i) the unit price of the drug charged
under the agreement; and
``(ii) the number of units of such drug
administered under the agreement during such
installment year.''.
(b) Conforming Amendments.--
(1) Section 1903(i)(10)(A) of the Social Security Act (42
U.S.C. 1396b(i)(10)(A)) is amended by striking ``or unless
section 1927(a)(3) applies'' and inserting ``, section
1927(a)(3) applies with respect to such drugs, or such drugs
are the subject of a risk-sharing value-based payment agreement
under section 1927(l)''.
(2) Section 1927(b) of the Social Security Act (42 U.S.C.
1396r-8(b)) is amended--
(A) in paragraph (1)(A), by inserting ``but
excluding any drugs for which payment is made by a
State under a risk-sharing value-based payment
agreement under subsection (l))'' after ``for coverage
of such drugs''; and
(B) in paragraph (3)--
(i) in subparagraph (C)(i), by inserting
``or subsection (l)(2)(A)'' after
``subparagraph (A)''; and
(ii) in subparagraph (D), in the matter
preceding clause (i), by inserting ``, under
subsection (l)(2)(A),'' after ``under this
paragraph''.
<all>