Pharma Must Demonstrate Better Outcomes for Pay-Per-Performance

In the dramatically changing pharma industry, one key trend that overlays providers of care, payers, and drug manufacturers is the transition to pay-for-performance. Under this model, pharma will be tasked to prove that their medicines are effective, impact patient outcomes, provide value, and perform better than alternative forms of intervention.

Traditionally, pharma has controlled product pricing, causing these prices to skyrocket—especially for specialty drugs. This is changing as healthcare policymakers, payers, and patient groups are playing a more significant role in the valuation process. The entire healthcare industry is shifting toward value-based contracting as buyers demand proof of value and performance. For specialty drugs, additional variables exist, such as the escalating prevalence of rare disease, associated cost of drug studies and clinical trials, and the need for real-world evidence in bringing drugs to market and gaining market share.

Focus on Pharmaceutical Guarantees

In response, more drug makers are entering into arrangements with payers in which they agree to pay a rebate or refund if patients fail to respond to the drug—similar to the “Lemon Law” for car sales. To leverage this new model and participate in a value-driven, pay-for-performance environment, manufacturers must factor in the potential for less than optimal outcomes as they negotiate value-based agreements.

As payers and employers seek pricing that is economical and avoids over-spending on drugs—especially more costly specialty pharmaceuticals—they are turning to a specialty-focused pharmaceutical management organization that can provide essential guidance in support of validating efficiency.

Specialty-Focused Pharmaceutical Management

Partnering with a specialty-focused pharmaceutical management company can play a pivotal role in getting the right patients the drugs they need at a price they can afford. This relies upon astute negotiations with pharmacies and pharmaceutical companies on behalf of insurers and customers.

The optimal specialty-focused pharmaceutical management partner can demonstrate specialized expertise and deliver value throughout the care continuum, empowering health plans, employer groups, and third-party administrators to overcome the challenges of complex illness among plan members. This involves critical services and guidance that ensure drug safety, payment within approved terms, and management of the increasingly complex interactions from prescription to outcome measurement.

The complexities of today’s healthcare system and the move to pay-for-performance and value-based contracting requires approaches and strategies that deliver on the promise of better outcomes. While buying medicine is much more important than purchasing a car under warranty, the underlying tenet of performance guarantees drives both these negotiations.

  • Dea Belazi

    Dea Belazi, PharmD, MPH is President & CEO at AscellaHealth, a national PBM with almost two million lives under management. Dea has more than 20 years of experience in the healthcare industry, mostly developing and managing pharmacy benefit management companies.


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