Congress Proposes Bill to Expand New Technology Add-On Payments for Antibiotics under Medicare

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In the July/August 2013 RPM Report, I co-wrote an article with Avalere's Scott Gottlieb and Lauren Barnes discussing the potential to use the new technology add-on payments (NTAPs), a novel pathway created by Congress in 2001, as a foundation for new policies that support innovation and address public health goals.
Please note: This is an archived post. Some of the information and data discussed in this article may be out of date. It is preserved here for historical reference but should not be used as the basis for business decisions. Please see our main Insights section for more recent posts.

Recently, on March 11, Reps. Peter Roskam, R-Ill., and Danny Davis, D-Ill.,, released the “Developing an Innovative Strategy for Antimicrobial Resistant Microorganisms (DISARM) Act,” which would create an entirely new IPPS pathway for separate payment for qualified antibiotics that are provided in specific hospitals.. The proposed policy applies to a limited class of antimicrobials termed ‘New Antimicrobial Drug,’ defined as new products, or supplemental applications of existing products, that:

    are approved on or after Jan. 1, 2014.
    are indicated on their FDA label to treat an infection caused by, or likely to be caused by, a qualifying pathogen.
    satisfies an unmet medical need.
    the pathogen at issue is associated with high rates of mortality of significant morbidity, as determined by the Secretary in consultation with the CDC and infectious diseases.
    the prescribing hospital must participate in the existing Antimicrobial Use module of the CDC’s National Healthcare Safety Network (on in another reporting program as determined by the Secretary).

Otherwise, there are three big differences between the existing NTAP pathway and the DISARM pathway:

    NTAP provides a max of 3 years of extra payments, whereas DISARM would be permanent for the qualified drugs.
    NTAP is additional amounts to the IPPS, whereas DISARM is budget neutral via a lower base rate for the IPPS.
    NTAP is available for any hospital paid under the IPPS, whereas DISARM would only be available for hospitals participating in the Antimicrobial Use and Resistance Module of the National Healthcare Safety Network of the Centers for Disease Control and Prevention.

If passed, the new payment policy would be effective for discharges on or after Oct. 1, 2014.

By providing NTAPs for antibiotics used in the inpatient setting to treat pathogens associated with high rates of mortality and that meet an unmet medical need, this bill signals an overall push toward spurring developments in the field of antibiotics and microbial resistance across several government agencies. The bill also comes on the heels of the president’s budget request released earlier this month and a CDC report last year, both of which included provisions intended to combat antibiotic resistance. Earlier this month, HHS proposed new 2020 targets for its National Action Plan to Prevent Healthcare-Associated Infections (HAI): Road Map to Elimination. The HAI Action Plan focuses on reducing the incidence of specific health care-associated infections and increasing adherence to specific sets of recommended prevention practices. The specific targets highlight the added room for improvement and that addressing the prevention, treatment, and management of infections remains a national priority. NTAP and other payment incentives warrant more consideration. Payment incentives, coupled with incentives for drug development (such as the GAIN Act for antibiotics), can be a powerful combination in promoting innovation.

With the national focus on infectious diseases, life science companies should expect more incentives tied to this area moving forward.

View our initial NTAP story here.

For more information, please reach out to me directly at

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