Health insurers go all in on value-based drug pricing

Judging by recent developments, health insurers are stepping up their efforts to embrace value-based purchasing for prescription drugs.

One of those insurers is UPMC Health Plan, which announced this week that it had created the Center for Value-Based Purchasing for Pharmaceuticals to “fundamentally change the way medications are paid for in the U.S.”

As part of the new venture, which is funded in part by a research grant from Express Scripts, scientists and providers will study the impact of various payment models, create and test new payment models for medications in multiple clinical domains, and develop optimal measures and outcomes for medications in specific populations.

"We anticipate that the models and learnings from this effort should be highly scalable to other insurance providers and pharmacy benefits managers, which will give the Center for Value-Based Purchasing for Pharmaceuticals the opportunity to rapidly influence pharmaceutical purchasing nationwide and promote greater value in medication use," said William Shrank, M.D., UPMC Health Plan’s chief medical officer.  

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Other payers are turning to collaborations with pharmaceutical companies to advance value-based purchasing.

Last week, UnitedHealth Group’s health services arm Optum and Merck announced that they will team up on a multiyear project called “Learning Laboratory,” which like UPMC’s new venture, will explore various value-based payment models and how they could be scaled up.

Optum will use its integrated claims and clinical data to allow it to work with Merck on developing and testing advanced predictive models. The organizations will also design outcomes-based risk-sharing agreements that reduce clinical and financial uncertainty surrounding payment for prescription drugs.

Harvard Pilgrim Health Care, meanwhile, announced that it signed two outcomes-based contracts with AstraZeneca for two different medicines. One, Brilinta, is used to treat acute coronary disease, and the other, Bydureon, helps control blood glucose levels in Type II diabetes patients.

“Real world performance may differ from what is observed in well-controlled clinical trials, and the willingness of pharmaceutical companies like AstraZeneca to go at risk for delivering on these outcomes sends a positive message to health plans, prescribing physicians and patients,” said Harvard Pilgrim Chief Medical Officer Michael Sherman.