It’s that time of year where we’re busy heading into the final quarter of the year. In 2018, we have witnessed a fundamental change in the concept of value, going far beyond pharmacological properties and clinical effects, to not only to include patient value, quality of life and patient management, but also to integrate systems and societal value dimensions more broadly.Where are we in our journey towards the new frontier in the ‘paying for value’ discussion in the US?
Anticipate Deal Governance and Approach to Issue Resolution
As discussed up to this point, preparing and implementing an OBA requires addressing multiple complex and technical issues. In order for the partners to effectively and successfully tackle these, it is paramount to set up the right governance from Day 1 with a proper steering committee and clear decision-making rules.
First the health plan and the manufacturer should involve appropriate senior leadership to co chair the steering committee. This will ensure that both parties will set the right vision for the partnership and provide significant decision power to resolve most of the issues within the steering committee. They will also be able to make some recommendations about potential needs for an amendment of the agreement if needed. Each group should then include committee members that represent the key critical skills to set up and manage the agreement.
The composition of the committee should be open enough to potentially evolve when the agreement transitions from preparation to execution, as responsibilities and activities will change. In the preparation phase, the committee will focus on designing and negotiating the different items of the OBA, namely articulating the rationale for the agreement, selecting the outcome, defining precisely the patients included in the performance evaluation, the performance threshold or events that will trigger payments or additional rebates, the financial
deal structure, the data source(s) and methods to assess the performance, the frequency of performance assessments, and adjudication process in case of disagreement. The steering committee will also ensure that the right capabilities are developed to support the execution, and will manage internal and external communications around the agreement. In the execution phase, the steering committee should primarily focus on reviewing the performance assessments and validating payments/additional rebates. Additionally, it will be responsible for resolving issues that could arise, which could revolve around disagreement on the performance assessment, but also possibly renegotiating part or all of the agreement in case of exceptional events.
As in any partnership, the steering committee will play a key role in making it a success or failure. Hence, companies should take the time upfront to carefully select the team members they will include and agree on the mandate of the committee.