{"entity":{"id":"idea-cost-asp-flat-fee","kind":"idea","name":"Pay a flat fee for giving a Part B drug instead of 6% of its price","aka":[],"tldr":"Medicare pays clinics the drug's average sales price plus 6%, so a dearer drug earns the clinic more; replacing the percentage with a flat handling fee removes the incentive to pick the expensive option.","summary":"Under Part B, clinician-administered drugs are reimbursed at the average sales price plus 6% (reduced by sequestration). The add-on scales with price, so two equally effective drugs earn a practice very different margins. A flat per-administration fee, set to cover handling and inventory cost, would make the choice between a biosimilar and its reference product, or between two similar checkpoint inhibitors, financially neutral for the prescriber. MedPAC has recommended variants of this for a decade.","asOf":"2026-09-10","links":[{"label":"CMS: Part B drug payment (ASP pricing files)","url":"https://www.cms.gov/medicare/payment/part-b-drugs/asp-pricing-files"},{"label":"MedPAC reports to Congress","url":"https://www.medpac.gov/document-type/report/"}],"tags":[],"related":[],"cancers":[],"sections":[],"technologies":[],"targets":[],"drugs":[],"companies":[],"institutions":["nci"],"pathways":[],"terms":["biosimilar","340b-program"],"trials":[],"people":[],"bottlenecks":["b-drug-pricing","b-incentive-misalignment"],"keyPapers":[],"journals":[],"dependsOn":[],"notes":[],"hypothesis":"Switching the Part B add-on to a flat fee will raise biosimilar share in oncology by at least ten percentage points within two years and lower Part B oncology drug spending per patient without reducing the number of patients treated.","rationale":"The 340B and biosimilar literature shows prescribers respond to margins. Removing the margin difference is a cheaper lever than negotiating every price.","test":"A CMS Innovation Center model in a set of regions with a flat fee, comparing biosimilar share, drug spend and treatment volumes against matched control regions over two years.","maturity":"speculative","actor":"policy","cost":"medium","horizonYears":3},"route":"/ideas/idea-cost-asp-flat-fee/","neighbours":{"institution":[{"id":"nci","kind":"institution","name":"National Cancer Institute (NIH)","route":"/institutions/nci/"}],"term":[{"id":"340b-program","kind":"term","name":"340B Drug Pricing Program","route":"/terms/340b-program/"},{"id":"biosimilar","kind":"term","name":"Biosimilar","route":"/terms/biosimilar/"}],"bottleneck":[{"id":"b-incentive-misalignment","kind":"bottleneck","name":"Incentives reward me-too drugs and marginal gains","route":"/bottlenecks/b-incentive-misalignment/"},{"id":"b-drug-pricing","kind":"bottleneck","name":"Prices and value","route":"/bottlenecks/b-drug-pricing/"}]}}