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NATIONAL HARBOR, MD. – Paying for value over volume is being seen as a key part of driving down the cost of prescription drugs. But setting up value-based contracts can be a challenge.
“In Utah, we thought we would be an appropriate laboratory to try and figure out, ‘Is there a way that we can do this different?’ ” Diana Brixner, PhD, of the University of Utah, Salt Lake City, said at the annual meeting of the Academy of Managed Care Pharmacy. “How can we be creative and have alternatives to high-deductible plans in Utah through value-based–type programs?”
The state considered three different options, she noted. The first option was value-based drug coverage, which pays for only those drugs that are deemed valuable by an independent source. Uptake on these types of contracts has been slow, Dr. Brixner noted, particularly as patient advocates have argued that some drugs may not be cost effective but are still the best choice for certain patients. In those cases, value-based drug coverage has the potential to hinder access.
“There are certainly still different areas and issues that need to be worked out, but in concept, this could potentially help the solution of getting more affordable care to patients,” Dr. Brixner said.
The second option is outcomes-based contracting, which involves working with manufacturers to determine appropriate disease states with vetted outcomes measures and building pharmacy contracts around them.
“We are very optimistic about the potential for outcomes-based contracting as well,” Dr. Brixner said.
CVS has looked into zero copays for preventive medicines, Dr. Brixner said. She added that studies have shown the potential for millions in savings from these kinds of arrangements.
But there are concerns with all of these designs. Drug manufacturers, for instance, have concerns about getting accurate data to determine the payment parameters. Another concern from the manufacturer side is the inability to discuss information about off-label drug use that could be important to negotiating a value-based contract.
For payers, a key concern is making sure there are measurable outcomes, as well as appropriate risk sharing.
In the end, different conditions lend themselves to different types of value-based contracting, Dr. Brixner said. For example, multiple sclerosis is better suited to a value-based drug coverage contract, while rheumatoid arthritis fits better in an outcomes-based contracting design.
Kenneth Schaecher, MD, associate chief medical officer of the University of Utah Health Plan, highlighted some of the challenges of value-based care from a payer perspective, including determining outcomes to use in contracts.
“One of the challenges that we get is trying to decide what is a measure that is important to both the health plans and the patients and the providers,” he said. “If the measure is not reflective of an outcome relative to those, it is going to be very hard to impact it” through a value-based contract. He noted that patient-reported outcomes do not work well in value-based contracts.
The timeliness of the data can also present a challenge, especially when factoring in member turnover from health plans.
But there are examples of success, he noted. Dr. Schaecher highlighted a few examples, including an outcomes-based contract between Cigna and Merck for Januvia and Janumet, which included higher discounts for improvements in hemoglobin A1c across the insured population. Additional discounts were offered if adherence improved. And if both outcomes and adherence improved, Cigna would move the drugs to formulary tiers with lower copays.
NATIONAL HARBOR, MD. – Paying for value over volume is being seen as a key part of driving down the cost of prescription drugs. But setting up value-based contracts can be a challenge.
“In Utah, we thought we would be an appropriate laboratory to try and figure out, ‘Is there a way that we can do this different?’ ” Diana Brixner, PhD, of the University of Utah, Salt Lake City, said at the annual meeting of the Academy of Managed Care Pharmacy. “How can we be creative and have alternatives to high-deductible plans in Utah through value-based–type programs?”
The state considered three different options, she noted. The first option was value-based drug coverage, which pays for only those drugs that are deemed valuable by an independent source. Uptake on these types of contracts has been slow, Dr. Brixner noted, particularly as patient advocates have argued that some drugs may not be cost effective but are still the best choice for certain patients. In those cases, value-based drug coverage has the potential to hinder access.
“There are certainly still different areas and issues that need to be worked out, but in concept, this could potentially help the solution of getting more affordable care to patients,” Dr. Brixner said.
The second option is outcomes-based contracting, which involves working with manufacturers to determine appropriate disease states with vetted outcomes measures and building pharmacy contracts around them.
“We are very optimistic about the potential for outcomes-based contracting as well,” Dr. Brixner said.
CVS has looked into zero copays for preventive medicines, Dr. Brixner said. She added that studies have shown the potential for millions in savings from these kinds of arrangements.
But there are concerns with all of these designs. Drug manufacturers, for instance, have concerns about getting accurate data to determine the payment parameters. Another concern from the manufacturer side is the inability to discuss information about off-label drug use that could be important to negotiating a value-based contract.
For payers, a key concern is making sure there are measurable outcomes, as well as appropriate risk sharing.
In the end, different conditions lend themselves to different types of value-based contracting, Dr. Brixner said. For example, multiple sclerosis is better suited to a value-based drug coverage contract, while rheumatoid arthritis fits better in an outcomes-based contracting design.
Kenneth Schaecher, MD, associate chief medical officer of the University of Utah Health Plan, highlighted some of the challenges of value-based care from a payer perspective, including determining outcomes to use in contracts.
“One of the challenges that we get is trying to decide what is a measure that is important to both the health plans and the patients and the providers,” he said. “If the measure is not reflective of an outcome relative to those, it is going to be very hard to impact it” through a value-based contract. He noted that patient-reported outcomes do not work well in value-based contracts.
The timeliness of the data can also present a challenge, especially when factoring in member turnover from health plans.
But there are examples of success, he noted. Dr. Schaecher highlighted a few examples, including an outcomes-based contract between Cigna and Merck for Januvia and Janumet, which included higher discounts for improvements in hemoglobin A1c across the insured population. Additional discounts were offered if adherence improved. And if both outcomes and adherence improved, Cigna would move the drugs to formulary tiers with lower copays.
NATIONAL HARBOR, MD. – Paying for value over volume is being seen as a key part of driving down the cost of prescription drugs. But setting up value-based contracts can be a challenge.
“In Utah, we thought we would be an appropriate laboratory to try and figure out, ‘Is there a way that we can do this different?’ ” Diana Brixner, PhD, of the University of Utah, Salt Lake City, said at the annual meeting of the Academy of Managed Care Pharmacy. “How can we be creative and have alternatives to high-deductible plans in Utah through value-based–type programs?”
The state considered three different options, she noted. The first option was value-based drug coverage, which pays for only those drugs that are deemed valuable by an independent source. Uptake on these types of contracts has been slow, Dr. Brixner noted, particularly as patient advocates have argued that some drugs may not be cost effective but are still the best choice for certain patients. In those cases, value-based drug coverage has the potential to hinder access.
“There are certainly still different areas and issues that need to be worked out, but in concept, this could potentially help the solution of getting more affordable care to patients,” Dr. Brixner said.
The second option is outcomes-based contracting, which involves working with manufacturers to determine appropriate disease states with vetted outcomes measures and building pharmacy contracts around them.
“We are very optimistic about the potential for outcomes-based contracting as well,” Dr. Brixner said.
CVS has looked into zero copays for preventive medicines, Dr. Brixner said. She added that studies have shown the potential for millions in savings from these kinds of arrangements.
But there are concerns with all of these designs. Drug manufacturers, for instance, have concerns about getting accurate data to determine the payment parameters. Another concern from the manufacturer side is the inability to discuss information about off-label drug use that could be important to negotiating a value-based contract.
For payers, a key concern is making sure there are measurable outcomes, as well as appropriate risk sharing.
In the end, different conditions lend themselves to different types of value-based contracting, Dr. Brixner said. For example, multiple sclerosis is better suited to a value-based drug coverage contract, while rheumatoid arthritis fits better in an outcomes-based contracting design.
Kenneth Schaecher, MD, associate chief medical officer of the University of Utah Health Plan, highlighted some of the challenges of value-based care from a payer perspective, including determining outcomes to use in contracts.
“One of the challenges that we get is trying to decide what is a measure that is important to both the health plans and the patients and the providers,” he said. “If the measure is not reflective of an outcome relative to those, it is going to be very hard to impact it” through a value-based contract. He noted that patient-reported outcomes do not work well in value-based contracts.
The timeliness of the data can also present a challenge, especially when factoring in member turnover from health plans.
But there are examples of success, he noted. Dr. Schaecher highlighted a few examples, including an outcomes-based contract between Cigna and Merck for Januvia and Janumet, which included higher discounts for improvements in hemoglobin A1c across the insured population. Additional discounts were offered if adherence improved. And if both outcomes and adherence improved, Cigna would move the drugs to formulary tiers with lower copays.
REPORTING FROM AMCP NEXUS 2019