Monday, February 24, 2020

Value-Based Contracts Slowly Picking Up Steam

imageValue-based contracts (sometimes referred to as risk-sharing agreements or outcomes-based contracts) are a type of innovative payment model that brings together two key stakeholders—health care payers and biopharmaceutical manufacturers—to deliver medicines to patients. Under value-based contracts, biopharmaceutical manufacturers and payers agree to link coverage and reimbursement levels to a drug’s effectiveness and/or how frequently it is utilized. There are three types of value-based solutions:

1. Value-based drug coverage arrangements. In this case, payors cover only drugs that others have deemed valuable. Uptake on these has been slow, said Dr. Brixner, due to resistance on the part of both patients and manufacturers.

2. Outcomes-based contracts. These are a type of VBC in which the health plan works with manufacturers to study disease states with measurable clinical outcomes. Such arrangements are not always disclosed but seem to be increasing.

3. Value-based insurance designs. These arrangements look for areas to reduce or eliminate patients’ copays and deductibles for therapies that have demonstrated preventive and health care benefits. CVS recently implemented a plan with zero copays for preventive medicine.

Tyrone's Commentary:

These manufacturer revenues (rebate dollars) are in your PBM contract albeit the fine print. Most PBMs will try to exclude plan sponsors from participating in these cost-offsets but don't be fooled. You are entitled to every penny.

There are several potential factors limiting manufacturers’ interest in outcomes-based contracting, including a potential inability to obtain accurate data and outcomes measures, inability to discuss information that is outside the FDA-approved label, and regulatory barriers that prevent disclosing information, according to a recent AMCP membership survey (J Manag Care Spec Pharm 2018;24[5]:410-415).

The same survey found that payors, too, were concerned with identifying simple and easily measurable outcomes, wanted greater risk sharing with manufacturers, and were concerned with meeting a sufficient patient population to make the agreement worthwhile.

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