7:50 PM
 | 
Oct 19, 2018
 |  BioCentury  |  Product Development

New shops for value-based deals

How new players in value-based pricing are taking the model to new territory

Value-based payment models are starting to appear beyond the high-profile insurers and PBMs that have dominated the scene, with a series of deals struck since August by the Oklahoma Health Care Authority and the University of Pittsburgh Medical Center.

The new players are extending the scope to drugs already on the market and the total cost of care rather than just the cost of the drug.

OHCA, which administers Oklahoma’s Medicaid program covering about 800,000 individuals, struck deals with Alkermes plc, Melinta Therapeutics Inc. and an undisclosed company. UPMC oversees an employer-sponsored plan covering about 3.4 million members, and signed deals with Alkermes and Boehringer Ingelheim GmbH.

Though still few in number, the deals show how companies can work with non-traditional payers to test different outcomes models and expand the range of data about how their drugs work in the real-world setting.

Until now, outcomes-based deals have been the province of a select group of large insurers and PBMs, such as Cigna Corp. and Prime Therapeutics LLC, as well as a handful of regional players such as Harvard Pilgrim Health Care Inc., a pioneer of the model.

While those payers’ deals covered newly launched therapies, OHCA and UPMC’s deals involve drugs that launched up to 12 years ago.

Both OHCA and UPMC hope to establish themselves as testing grounds for innovative arrangements and plan to use their first deals to home in on the best outcomes to track. Some of the deals could become templates for other payers with similar goals.

“Value-based deals are one of the ways that smaller and mid-sized plans and PBMs are going to be able to get more for their drug spend.”

Roger Longman, Real Endpoints

Roger Longman, chairman at reimbursement consultancy Real Endpoints LLC, told BioCentury, “Value-based deals are one of the ways that smaller and mid-sized plans and PBMs are going to be able to get more for their drug spend.”

Longman thinks the deals can attract pharmas...

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