Value-Based Contracting in Commercial Insurance. Risk-sharing agreements, also referred to outcomes-based or value-based contracting, are an underutilized but slowly growing type of payment model that brings together health care payers and pharmaceutical manufacturers to provide drugs to patients. Under risk-sharing agreements, pharmaceutical manufacturers and payers engage in an agreement that attaches financial and clinical outcomes directly to a product or service.
While risk-sharing agreements are more frequent in Europe and with the Centers for Medicare & Medicaid Services (CMS), there is only a small number of announced contracts in the U.S. commercial insurance market. Access Market Intelligence, through discussions with industry observers and participants, found that while both parties may be willing, developing a risk-sharing agreement is more difficult to complete.
Although value-based drug pricing has gained more attention, there is still only a small number of contracts between payers and drug or device makers. In the commercial insurance market, the reasons such contracts have not gained more traction to date generally revolve around the fact that they are difficult to develop as participants determine how to measure value and how do tie payment to value.
In nominating Scott Gottlieb to become the next commissioner of the FDA, President Donald Trump might have given a boost to pharmaceutical payment models that seek to link the price of drugs more closely to their economic benefit.
In AMI’s report, Value-Based Contracting in Commercial Insurance, we reviewed publicly-available information to present background on risk-sharing and insight into risk-sharing agreements from a payer’s and manufacturer’s perspective. Sample information from the report is available here.
The report’s Table of Contents:
Value-Based Contracting – pgs. 4-16
- Health Plan Interest
- Risk-Sharing Models
- Announced Contracts
Payers– pgs. 17-32
- Harvard Pilgrim
- Health Alliance Plan
- Priority Health
Manufacturers – pgs. 33-46
- Eli Lilly
- EMD Serono
- Gilead Sciences