# Pay a flat fee for giving a Part B drug instead of 6% of its price

Source: https://onco.cc/ideas/idea-cost-asp-flat-fee/  
OnCo record `idea-cost-asp-flat-fee` (Idea). Data CC BY-NC 4.0, attribute "Data from OnCo (onco.cc)"; commercial use needs a licence.

## TL;DR

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.

## Fields

- Kind: Idea
- Last checked: 2026-09-10
- 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.
- Proposed 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

## Sources

- CMS: Part B drug payment (ASP pricing files): https://www.cms.gov/medicare/payment/part-b-drugs/asp-pricing-files
- MedPAC reports to Congress: https://www.medpac.gov/document-type/report/

## Connected records

- institutions: [National Cancer Institute (NIH)](https://onco.cc/institutions/nci/)
- terms: [340B Drug Pricing Program](https://onco.cc/terms/340b-program/), [Biosimilar](https://onco.cc/terms/biosimilar/)
- bottlenecks: [Incentives reward me-too drugs and marginal gains](https://onco.cc/bottlenecks/b-incentive-misalignment/), [Prices and value](https://onco.cc/bottlenecks/b-drug-pricing/)

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