If it works, we'll pay for it.

According to a release sent out by the Michigan Department of Health and Human Services, Michigan residents who benefit from Medicaid should experience more affordable prescription-based treatment under new approved state plan to incentivize drug makers to "provide more effective medications".

Michigan became the second state – joining Oklahoma – to gain federal Centers for Medicare and Medicaid Services approval to move forward with negotiating contracts with drug manufacturers that are based on patient outcomes. - MDHHS

According to the release, "the amendment to Michigan’s Medicaid State Plan addresses the impact that innovative and costly new drug therapies are having on state Medicaid programs nationwide. States are required to cover the cost of all products with federal Medicaid rebates. Under outcomes-based contract arrangements, drug manufacturers would be liable for increased supplemental rebate payments to the Medicaid program if the drug did not perform as claimed."

“This exciting new arrangement has the potential to improve the quality, value and efficiency of drug-based treatments covered by the Michigan Medicaid program,” said Kathy Stiffler, acting Medical Services director for the Michigan Department of Health and Human Services (MDHHS). “This is great news for the 2.4 million Michiganders who are Medicaid beneficiaries.”

“I applaud Michigan’s bold initiative, which will empower the state to demand results from drug companies and seek the best deal for patients,” said Seema Verma, administrator of the Centers for Medicare and Medicaid Services. “As we see innovation in biomedicine, it is incumbent on us to also develop innovative payment policies – as Michigan is doing today – in order to advance President Trump’s priority to lower drug prices.”