Medicaid: BIO's Comments on CMS's Draft NARP Methodology

Dear Mr. Reed:

The Biotechnology Industry Organization (BIO) is pleased to submit the following comments on the Draft Methodology for Estimating National Average Retail Prices (NARP) for Medicaid Covered Outpatient Drugs, commissioned from Myers & Stauffer LC by the Centers for Medicare and Medicaid Services (CMS). BIO represents more than 1,100 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products.

As the representative of an industry that is devoted to improving health care through the discovery of new therapies, BIO believes that appropriate reimbursement based on an accurate payment methodology is essential to protecting beneficiary access to care and encouraging continued investment in innovation. The results of the NARP survey have the potential to impact how State Medicaid programs set reimbursement for drugs and biologics, therefore it is important that stakeholders understand the types of transactions that are included in the published results. As CMS continues to take steps to create and publish a monthly pricing database for Medicaid covered outpatient drugs, BIO encourages the Agency to provide greater clarity as to what it intends the NARP to represent as an "average drug price benchmark."  Specifically, we urge CMS to issue a revised methodology report that provides greater detail around the data sources and processes associated with reporting NARP input data to Myers & Stauffer and CMS, the rationale for the inclusion or exclusion of certain types of claims data, whether and how the inclusion or exclusion of specific types of claims data may impact the NARP, and the potential sources of distortion from data exclusions/inclusions. We offer the following comments to help achieve these important goals.