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Outcomes trumping volume

How payers, pharmas are experimenting with outcomes based reimbursement

In their quest to establish value for money, payers in the U.S. are asking drug manufacturers to experiment with new contracting models that tie rebates and discounts to health outcomes instead of drug volumes.

At least seven outcomes-based contracts have been disclosed since 2009. The latest was announced in March, when Merck KGaA's EMD Serono Inc. subsidiary and regional pharmacy benefit manager Prime Therapeutics LLC reached a deal for multiple sclerosis drug Rebif interferon beta-1a.

While traditional rebates are based on volume of drugs purchased, the newer model is meant to align the partners' incentives around better outcomes for the patient, according to Cyndy Nayer, co-founder, president and CEO of the not-for-profit Center for Health Value Innovation.

"In an outcomes-based contract, the drug company, payer, purchaser and patient must all share in the rewards and the risk," she said.

For example, Thom Stambaugh, SVP and chief clinical officer of Cigna Corp.'s specialty pharmacy management, said the company passes savings from its outcomes programs back to its clients through rebates.

Most of these deals include traditional risk-sharing features similar to those first seen with the U.K.'s National Institute for Health and Clinical Excellence: if a drug does not improve

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