We believe the answer is yes. It is possible for everyone in the health care sector — patients, pharmacists, physicians, the biopharmaceutical industry, insurers and others — to have a constructive dialogue about ways that we can work together toward health system improvements.
And while it isn’t a comprehensive list, we wanted to share a few ideas to spark a forward-thinking conversation.
Consider risk-sharing agreements
Under risk-sharing agreements (RSAs), health care payers and biopharmaceutical manufacturers agree to link coverage and reimbursement levels to a drug’s effectiveness and/or how frequently it is utilized.
According to a recent study, there are benefits to these arrangements. Manufacturers can use RSAs to differentiate and demonstrate the effectiveness of their product versus their competitors’ products, which can assist payers in making formulary decisions. Payers can utilize RSAs to gain experience with a product, reducing uncertainty regarding clinical value, performance and financial impact.
Yet, existing barriers, such as the effort and expense involved in patient monitoring, make it difficult to design and implement RSAs in the current U.S. health care environment.
Move from ‘how much’ to ‘how well’ we spend
One approach toward reducing health care costs currently being tested in the Medicare program and by some employers is value-based insurance design. V-BID shifts the focus from “how much” to “how well” we spend health care dollars.
V-BID is driven by the concept of clinical nuance, which recognizes that medical services differ in the benefit they provide, as well as the benefit each individual patient experiences from a particular service. By incentivizing consumers to utilize the treatments that are most beneficial to them, this could shift spending to higher-value care.
Recognize patient differences via co-payments
Each patient may respond differently to a particular treatment, meaning that a biopharmaceutical listed on the first tier of a formulary may not work well for everyone. The individual who does not respond well to that first biopharmaceutical might need to try one or more treatment options until finding one that works best, which might be on a higher, or more expensive, tier of the formulary. Should that person be required to pay more for a medicine — whether it’s brand or generic — simply because his or her biological response is different?
Recognize full value of treatments
With the increased interest in determining value for all components of health care, value assessment tools are being developed as one of many important inputs to complex decisions related to treatments. Yet, there is no single answer to a value assessment, and the results will depend on the evidence, methods, models and assumptions underlying the assessment.
Given that value assessments are an evolving area, it is important that guiding practices are established to ensure value assessments become effective tools to support patient care and outcomes, rather than well-intentioned but flawed tools that impede it.
Understand and address gaps in quality measurement
Quality measures play a critical role in the implementation of accountable care organizations (ACOs), as physician payments will be based on how they measure up against quality metrics. It’s important to understand how and if these delivery and payment structures save money, as well as whether they result in improved patient health.
A first step is to examine where gaps exist in quality measurements for prevalent and costly health conditions such as breast cancer, HIV, diabetes and stroke, and to evaluate whether we are incenting the most appropriate and effective treatments for patients with these illnesses. We need to continue strengthening our understanding of how new payment models may be impacting individual patient care and health outcomes, as well as how biopharmaceuticals fit into these models.
Collaborate on data
Thanks to innovation in the technology sector, we are now starting to see the benefits of a revolution in health care data and, with it, the potential to make health care payment and delivery even more effective and cost efficient. Through electronic health records, claims data and even wearable devices, we are able to gather insightful, real-world evidence about how health care is being delivered, the quality of that care and how biopharmaceutical treatments are performing in patients in everyday settings.
This is even an area in which segments of the biopharmaceutical and insurance sectors have been able to collaborate to conduct real-world studies designed to determine how to most effectively and economically treat disease. How payers will utilize this evidence in making coverage decisions is still a work in progress, however, as new methods are being developed to ensure the quality of the data and how the research study is conducted, as well as how the evidence is evaluated.
Similarly, broader access to research-quality, taxpayer-funded databases could help researchers tackle a host of health care questions that cannot be addressed through other information sources. Although the Centers for Medicare & Medicaid Services now allows biopharmaceutical companies to access certain federal databases, access to state all-payer claims databases remains limited.
More open conversation
Section 114 of the Food and Drug Administration Modernization Act (FDAMA) of 1997 established a special mechanism for health care economic information that biopharmaceutical companies can share with payers. According to research on FDAMA 114 funded by the National Pharmaceutical Council, “the language of Section 114 is sufficiently vague … leaving legal, regulatory, health economics and other teams within drug companies to interpret the statute and gauge the company’s risk tolerance. The seemingly limited use of Section 114 to date may reflect companies’ uncertainty about its scope … In practice, it is hard to know exactly what the law allows, given the imprecision of the statute and the lack of guidance about its scope.”
The uncertainty around Section 114 can present a barrier to the exchange of important information that payers need to make formulary decisions.
We’re certain that there are more topics that we could add to this list of ideas, but these offer a solid place to start the conversation. And it’s important for all of us stakeholders to have that conversation sooner rather than later. After all, patients are relying on all of us to ensure that they will have the care that they need now, as well as access to innovations that could provide cures in the future.
Dan Leonard is president of the National Pharmaceutical Council.