Posted on March 23, 2017
Sarah Carroll, NEHI
FOR IMMEDIATE RELEASE
REWARDING RESULTS: MOVING FORWARD ON VALUE-BASED CONTRACTING
NEHI releases new white paper on one promising approach to managing biopharmaceutical costs
WASHINGTON, DC (March 23, 2017) – Amid national debate over biopharmaceutical prices, the Network for Excellence in Health Innovation (NEHI) today released a report on one approach to managing drug costs and obtaining better value for the money spent. Called “value based contracting,” these new arrangements between biopharmaceutical manufacturers and payers or purchasers aim to reward successful outcomes of medication use in patients, rather than paying manufacturers based on the volume of drugs sold.
In its white paper, Rewarding Results: Moving Forward On Value-Based Contracting, NEHI outlines theopportunities for, and obstacles to, these new value-based arrangements between manufacturers and payers, including private health insurers today and potentially government purchasers tomorrow. The report points out that achieving the full potential of these contracts will necessitate regulatory and other changes, including provisions to permit these contracts without triggering “Best Price” drug regulations in government programs such as Medicaid.
“There’s broad recognition that many effective biopharmaceutical treatments, and even cures, are coming onto the market, and that most will be high cost,” says Susan Dentzer, NEHI’s President and CEO. “Payers of all sorts, whether private insurers or the government, need a way to manage these costs, and pay biopharmaceutical manufacturers for securing the best outcomes for patients, and not on the volume of drugs sold as is typically the case today.”
NEHI’s recommendations to encourage value-based contracting for biopharmaceuticals include the following:
As the health care system overall moves away from volume-based to value-based payment, biopharmaceuticals also must be paid for under value-based arrangements. This paper and reccomendations aim tohelp create an environment in which these value-based agreements could be executed, and help to achieve better results for patients and a more sustainable rate of spending on health care.
NEHI’s white paper is available on NEHI's website: click here