MVP Act
- Sponsor
- Rep. Guthrie, Brett [R-KY-2]
- Committees
- Energy and Commerce Committee (primary)
- Last action
- Mar 9, 2026
Bottom line
The bill aims to encourage the adoption of value-based purchasing for prescription drugs in federal healthcare programs by providing regulatory clarity and reducing legal barriers.
What it actually does
This bill amends the Social Security Act to formally recognize and facilitate value-based purchasing (VBP) arrangements for prescription drugs within the Medicaid and Medicare programs. It clarifies how VBP-related payments and outcomes affect drug pricing calculations, specifically for 'best price,' 'average manufacturer price' (AMP), and 'average sales price' (ASP). Additionally, it creates an exception under the Anti-Kickback Statute for certain VBP remuneration and mandates federal guidance for VBP of inpatient drugs under Medicaid.
Proponents argue
Proponents argue that the bill will foster innovative payment models that link drug payments to patient outcomes, rather than just volume, which can lead to improved patient access to transformative therapies, especially for rare diseases. They contend that clarifying complex drug pricing rules and providing an Anti-Kickback Statute exception will remove significant regulatory hurdles, ultimately lowering overall health system costs and improving health outcomes.
Opponents contend
Opponents might argue that the bill introduces additional complexity into already intricate drug pricing calculations, potentially making it more challenging to ensure transparency and robust oversight. Concerns could be raised that allowing 'multiple best price points' or excluding certain VBP-related refunds from AMP/ASP calculations could inadvertently reduce government savings or obscure the true lowest prices, impacting federal and state budgets.
The bill is concise and can be read relatively quickly, but a full understanding of its implications requires familiarity with complex drug pricing regulations and federal healthcare statutes.
Section 2(a)
Codifying Multiple Best Price Points under Medicaid
This provision amends the Medicaid 'best price' rule, which typically requires drug manufacturers to offer states the lowest price available to any commercial purchaser. It now allows manufacturers to report multiple best price points for a single drug dosage and strength if that drug is part of a value-based purchasing arrangement, provided the manufacturer offers the same arrangement to all states. This aims to accommodate the variable nature of outcomes-based VBP payments.
Supporters argue
Supporters argue this flexibility is crucial for VBP arrangements to be viable, as outcomes-based payments can vary. It removes a significant barrier to VBP adoption by ensuring manufacturers are not unfairly penalized by the 'best price' rule for offering innovative payment models.
Critics contend
Critics might contend that allowing multiple best price points could complicate oversight and potentially reduce the transparency of drug pricing, making it harder for states to ensure they are consistently receiving the true lowest price.
Tradeoffs
The provision balances the desire to encourage innovative payment models (VBP) with the long-standing objective of maintaining low drug costs for Medicaid through the 'best price' rule.
Section 2(b)
Excluding VBP-Related Remuneration from Average Manufacturer Price (AMP)
This section modifies how the Average Manufacturer Price (AMP) is calculated for drugs under VBP arrangements. It specifically excludes refunds, rebates, reimbursements, or free goods from the manufacturer (or a third party) that are triggered when a patient fails to achieve defined outcomes under a VBP arrangement. It also specifies that for VBP arrangements with installment payments, the aggregate price is considered paid in full in the first installment for AMP calculation purposes, ensuring a clear reporting method.
Section 3
Excluding VBP Remuneration from Medicare Average Sales Price (ASP)
This section amends the calculation of Average Sales Price (ASP) under Medicare Part B. It specifies that for drugs sold under VBP arrangements where the manufacturer has elected multiple best price points (as allowed by Section 2(a) of this bill), any amount excluded from the Medicaid AMP calculation (as per Section 2(b)) shall also be excluded from the Medicare ASP calculation. This change aligns Medicare and Medicaid drug pricing rules for VBP arrangements.
Section 4
HHS Guidance on VBP for Inpatient Drugs under Medicaid
This section directs the Secretary of Health and Human Services (HHS) to issue guidance to State Medicaid agencies within 180 days of enactment. This guidance will cover the option of entering into VBP arrangements with manufacturers for drugs or biological products provided as part of inpatient hospital services. Crucially, the guidance must also address how multiple states can enter into agreements to facilitate fund transfers for patients who receive VBP drugs in a different state than their residence, streamlining cross-state care.
Section 5
Anti-Kickback Statute Exception for VBP Refunds
This section amends the Anti-Kickback Statute (AKS) to create a new, specific exception. It states that any remuneration provided by a manufacturer (or a third party on their behalf) to a state under a Medicaid VBP arrangement, specifically when a patient fails to achieve defined outcomes following drug administration, will not be considered a prohibited kickback. This addresses a legal ambiguity that could have deterred manufacturers from entering into VBP arrangements.
Section 6
GAO Study and Report on Value-Based Purchasing Arrangements
This section mandates the Comptroller General of the United States (GAO) to conduct a comprehensive study on the effectiveness of value-based purchasing (VBP) arrangements. The study will assess how VBP facilitates patient access to drugs, improves patient outcomes, and lowers overall health system costs in federal healthcare programs. It specifically requires an analysis of the Act's impact on access to transformative therapies, socioeconomic disparities, various drug pricing programs (Medicaid rebate, 340B, Medicare Part B), state Medicaid expenditures, and prices in non-participating states. A report containing the study's results is due to Congress by June 30, 2029.
A rule of construction stating that nothing in the amendments made by subsection (a) may be construed to prohibit a manufacturer from treating a value-based purchasing arrangement as a bundled sale.
Section 2(a)(2)
Why it matters:This is standard legislative practice to clarify the intent of the law and avoid unintended interpretations, ensuring that VBP arrangements can be structured in ways that align with existing commercial practices. It is a necessary clarification rather than an evasive tactic.
Case for: Proponents argue this provides additional flexibility and clarity for manufacturers, ensuring that VBP arrangements can be structured in ways that align with existing commercial practices like bundled sales, further encouraging their adoption without fear of conflicting interpretations.
Case against: Critics might argue that allowing VBP arrangements to be treated as bundled sales could add another layer of complexity to price reporting and auditing, potentially making it harder to discern the true price of individual drugs within a bundle, thus impacting transparency.
Estimated impact: Clarifies a specific legal interpretation for manufacturers, potentially easing the administrative burden and increasing the viability of VBP arrangements that involve bundled sales.
A special rule for certain value-based purchasing arrangements, stating that for VBP arrangements where payment for a drug is made in installments, the average price paid to a manufacturer for AMP purposes shall be determined as if the aggregate price per the terms of the arrangement were paid in full in the first installment during the rebate period.
Section 2(b)(1)(B)
Why it matters:This is a technical clarification necessary for the practical application of VBP arrangements with non-standard, installment-based payment schedules within the existing AMP calculation framework. It ensures a consistent and predictable method for reporting rather than being an evasive tactic.
Case for: Proponents argue this rule is essential for manufacturers to offer VBP arrangements with installment payments without facing undue complexity or uncertainty in their AMP calculations. It provides a clear, predictable method for reporting, which is vital for compliance.
Case against: Opponents might argue that treating the full aggregate price as paid in the first installment could distort the reported AMP for that specific rebate period, potentially affecting the rebate amounts paid to states, especially if the VBP arrangement's outcomes are not fully realized or if the installments span multiple rebate periods.
Estimated impact: Standardizes the AMP calculation for VBP arrangements involving installment payments, potentially impacting the timing and amount of reported AMPs and associated rebates for specific periods.