Group Releases First Report Examining Alternative Payment Models for Prescription Drugs Within State Medicaid Programs


PORTLAND, ORE. (September 9, 2016) – The Center for Evidence-based Policy at the Oregon Health & Science University today announced the launch of the State Medicaid Alternative Reimbursement and Purchasing Test for High-Cost Drugs, or SMART-D. The collaborative effort funded by the Laura and John Arnold Foundation is focused on exploring alternative payment models (APMs) to help manage prescription drug costs within state Medicaid programs.


The SMART-D group today released a report examining the landscape of Medicaid drug purchasing, specifically focusing on state Medicaid program’s ability to pursue APMs that may alleviate the burden of high-cost specialty drugs on state budgets.  The report, entitled “SMART-D Summary Report” suggests that multiple opportunities exist help to improve patient access to evidence-based therapies while allowing states to predict and manage prescription drug costs.


“Today’s payment landscape is especially challenging for state Medicaid programs, which are struggling to balance budgets as more and more innovative treatments become available, often at a higher cost,” said Pam Curtis, director, Center for Evidence-based Policy. “This research can help to achieve the triple win of maintaining access to treatments for Medicaid enrollees while also ensuring that drug manufacturers are reimbursed and states manage costs as effectively as possible.”


The research report released today focused on 64 high-cost specialty drugs that have a disproportionate impact on state Medicaid budgets. Though these drugs resulted in 1.5 percent of Medicaid claims in 2015, they resulted in 32 percent of total drug reimbursement dollars, or $16.9 billion in reimbursements (gross of rebates). There are more than 100 similar drugs in the pipeline for the next two years.


“Exploring voluntary ways for manufacturers and states to engage in conversations about alternative payment models is necessary in today’s environment,” said Susan Stuard, SMART-D Project Director. “Our research suggests that there are several realistic options to do so, and we look forward to working with states to put these models to use and ultimately maintain access to drugs for Medicaid enrollees.”


The SMART-D team plans to detailed background reports providing in depth analysis of legal and compliance implications, the high-cost specialty drug pipeline, APMs, and overall best practices that are summarized in today’s report. Following report release, the project will shift to working with several states to explore opportunities to collaborate with drug manufacturers, and providing implementation and technical assistance to the states.


For more information about SMART-D and to read the report, visit


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About The Center for Evidence-based Policy


Since 2003, the Center for Evidence-based Policy has served as a national leader in evidence-based decision making and policy design.


For over a decade we have worked with federal, state and local policymakers to use high-quality evidence to guide decisions, maximize resources and improve health outcomes for the people they serve. Housed within Oregon Health Science University, our team of researchers and policy experts are committed to providing the highest quality information to address today’s biggest policy challenges.


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