New York Times Article on Value-Based Contracting Doesn’t Tell Full Story, Says Academy of Managed Care Pharmacy

Alexandria, VA, July 31, 2017 — Conclusions reached in a recent New York Times article on outcomes-based contracting are premature, if not inaccurate, stated Academy of Managed Care Pharmacy (AMCP) CEO Susan A. Cantrell, RPh, CAE, adding, “It’s still the early innings for outcomes-based, or value-based, contracting for prescription drugs, and therefore, too soon to dismiss.”

In a letter to the editor, Cantrell wrote:

          The diagnosis of outcomes-based contracting in “Considering the Side Effects of Drugmakers’ Money-Back Guarantees” (July 10) is premature, if not inaccurate: “Scant evidence” of cost savings? Well, then, it doesn’t work, is the suggestion.  

It’s still the early innings for outcomes-based, or value-based, contracting (VBC) for prescription drugs, and therefore, too soon to dismiss. More important is its potential, as evidenced by the broad-based interest at our recent conference in reducing barriers to VBC. 

In addition, VBC is not just about lowering drug costs. In this era of biopharmaceutical innovation, it’s an innovative way to give patients access to extraordinary, but expensive new therapies, while controlling costs through incentives that reward real-world value. In fact, by getting patients medicines that truly improve outcomes, VBC should reduce total health care costs. 

With the overall health care system’s shift towards rewarding quality over quantity, pharmacy benefit managers too must explore new ways to pay for medications.

According to Cantrell, the Times’ July 10 article also mischaracterized a pay-for-performance program in Italy. In a letter to the Times editor, Luca Pani, MD, former general director at the Italian Medicines Agency and the principal architect of the country’s pay-for-performance program, noted the article cited the results of a research study based on 2014 data – concluding that “the amount of money refunded by the companies was trifling.” However, Dr. Pani stated, the registry system for the program wasn’t fully operational until the end of 2014, and the study in the article fails to capture 2015 results. That year saw nearly $200 million dollars refunded to the Italian drugs budget, and annual reimbursements since the full system was implemented are steadily increasing.

Furthermore, the article fails to address how Italy has successfully used the system to not only guarantee the performance of new medicines, but also secure better pricing in negotiations with the companies before granting access. For example, Dr. Pani points out that Italy’s prices for therapies in areas such as Hepatitis C are very competitive compared with prices paid by other countries. “Our team who put the system in place is now asked by other governments to help them deliver similar results for their health systems and insurers,” he wrote.

“AMCP believes value-based contacting is a promising concept worth pursuing,” Cantrell said. “Our health care system continues shifting towards rewarding value over volume, and we must explore new ways to pay for prescription drugs, to ensure patients get the medicines they need and health care resources are used wisely.”