SB 1637, the Medicaid VBPs for Patients Act or MVP Act, would amend the Social Security Act to make it easier for Medicaid and Medicare to use value-based purchasing arrangements for prescription drugs and biological products. These arrangements tie payment, rebates, or other manufacturer remuneration to patient outcomes or performance measures, rather than paying a fixed price regardless of results. The bill codifies how such arrangements can be treated under Medicaid’s drug rebate rules, including allowing multiple best price points for a single drug when the manufacturer offers the arrangement to all states, and clarifies how installment-based payments and outcome-based rebates are counted.
The bill also directs the Department of Health and Human Services to issue rules and guidance within 180 days on implementing these changes, including guidance for state Medicaid agencies on inpatient drugs reimbursed separately from hospital payment and on multi-state arrangements. It adds an explicit anti-kickback safe harbor for certain outcome-based remuneration under Medicaid value-based purchasing arrangements. In addition, it requires the Government Accountability Office to study how these arrangements affect access, outcomes, costs, disparities, and federal drug pricing programs, with a report due by June 30, 2029.
Impact
The bill would amend key provisions of Medicaid drug rebate law in section 1927 of the Social Security Act, Medicare Part B payment calculations in section 1847A, and the federal anti-kickback statute in section 1128B. It would also require HHS rulemaking and OIG rulemaking to implement the new framework, and it would create a GAO study mandate. The practical effect would be to give drug manufacturers and state Medicaid programs clearer authority to structure outcome-based contracts, while changing how best price and average sales price are calculated for drugs sold under those contracts.
Sentiment
The bill appears generally supportive of value-based drug pricing and is framed as a bipartisan effort, with introduction by Senators Mullin, Hassan, and Scott of South Carolina. The text emphasizes improving access to transformative therapies, including rare disease gene therapies, lowering costs, and reducing disparities, suggesting a favorable policy posture toward these arrangements. No committee transcript or vote record is provided, so there is no recorded opposition or amendment debate in the supplied materials.
Contention
The main policy tensions are likely to center on how value-based arrangements interact with Medicaid best price rules, average manufacturer price calculations, Medicare average sales price reporting, and the anti-kickback statute. Potential concerns include administrative complexity, compliance burdens for states and manufacturers, and whether the new rules could affect pricing in Medicaid, 340B, and Medicare Part B. The bill itself anticipates these issues by directing HHS and the Inspector General to issue implementing rules and by requiring GAO to study which pricing structures work best and whether states that do not enter such arrangements could see different drug prices.
Kids' Access to Primary Care Act of 2025This bill modifies payments for Medicaid primary care services. Specifically, the bill applies a Medicare payment rate floor to Medicaid primary care services that are provided after the date of enactment of the bill and extends the payment rate to additional types of practitioners (e.g., obstetricians).The Centers for Medicare & Medicaid Services must conduct a study on the number of children enrolled in Medicaid, the number of providers receiving payment for primary care services, and associated payment rates before and after the bill's implementation.