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?
We decided to initiate a 15-part series on our blog, where our US access experts take us through the shifting landscape for innovative contracting. Come join us as we explore a new world where quality benchmarks and patient outcomes performance define reimbursement and risk, and where the ability to translate value from clinical trial results into the messy real world of clinical practice becomes the currency of market access success. We’d love to get your feedback on our thoughts below, come back every Wednesday and Friday for a new edition.
Consider Enhancing your OBA with “Beyond the Pill” Interventions
While the discussion above has focused on fairly straightforward OBAs structured around new therapies, there is tremendous interest in including non-pharmacological interventions that can enhance the performance and value of therapies.
As we’ve seen in practice, several factors can influence the effectiveness and safety of treatments in real-life and partners should investigate early-on what are these factors, how they are distributed in the health plan population, and what is their expected impact. Once the partners have this basis of shared understanding, there is a common interest in trying to add interventions that can steer the use of the therapy towards patients where it is most effective and safe, so that performance is maximized for the health plan’s members and the financial risk is minimized for the Biopharma company.
For example, contracts for therapies in diabetes or hypercholesterolemia consider including a disease management program to reinforce adherence, which is known to be a key driver of effectiveness in these diseases. As we have seen, an alternative is to include a provision where non-adherent patients are out of scope of the contract. Still, even with this type of provision, there is interest to minimize the proportion of these patients so that the OBA can deliver its full value to each partner and ultimately to the patients. Other interventions can include physician support programs to ensure that the treatment is given to patients who benefit the most from it (e.g., based on severity profile, prior treatment history, specific biomarkers, co-morbidities…)
Merck has reached agreements with Aetna for Januvia (sitagliptin) and Janumet (metformin/sitagliptin): If Aetna members with type-2 diabetes don’t meet certain clinical goals – such as hitting their hemoglobin A1C or bloodsugar targets – Merck pays a rebate which increases depending on the number of patients who miss the targets, measured by analyzing data from Aetna’s claims. But in addition to such a classic performance contract, Merck/ Aetna also worked out an agreement for commercial patients that involves predictive analytics to identify 500 at-risk patients diagnosed with hypertension or diabetes. The objective was to identify at-risk members with commercial insurance coverage who are participating in two accountable care organizations (ACOs) in northern New Jersey. For the payer, the data will be analyzed to create improved-care procedures that are aimed at helping patients improve adherence to therapy with social support such as phone calls and in-person visits from Aetna nurses on a regular basis. Merck agreed to provide adherence tools and educational resources.
So-called “beyond the pill” interventions are a key opportunity for insurers to maximize the outcomes in their patient population, while paying for the actual value of the treatment through the OBA. At the same time, they represent an opportunity for manufacturers to minimize their financial risk on the OBA, as well as to possibly enhance their volumes by optimizing adoption and use of their treatment by physicians and patients.
A recent survey revealed that, in the eyes of senior sector leaders, the biggest driver for the transformation in healthcare is pricing pressures over the next 5-10 years. 47% of C-level executives cited the “adoption of value-based or risk-sharing pricing models” as their top choice, compared with 38% of respondents who listed “scientific breakthroughs”.2
United HealthGroup, the largest health insurer in the US, released data showing that in 2017 about half of its $130 billion annual medical spending occurred through value-based models, a share the group seeks to increase to 60% over the next two years. UnitedHealth reports that nearly one in three of its plan members already receive care from providers in value-based arrangements.3
As health systems are driven to accept increasing accountability and downside risk, payers and providers are looking for the biopharmaceutical industry to share the risks around performance of their products – based on outcomes measured in the actual healthcare setting.