After paying homage to Drug Channels Institute President Dr Adam Fein, Burt Zweigenhaft, PhD, executive director, AVBCC, kicked off a panel about payers and value-based contracting at Asembia 2024 by discussing the current state of value-based contracting and the gross net problem, or as he simply phrased it, “distortion in health care pricing”. 

He described the 21st Centuries Cures Act and its role in opening the pathway for interoperability to easily transfer patient data so it can “freely flow through electronic medical records (EMRs) and other systems to help patients transfer the data [and receive] better clinical decision support.”

But when you think about infrastructure, Mr Zweigenhaft asked, “do we have the infrastructure to be able to ingest data and calculate [it]?” His statement highlighted a major obstacle: obtaining data is a positive step forward, but the data is useless if the industry doesn’t know how to use it properly.

When thinking about how health care in general defines value, Lucy Ruwitch Langer, MD, MSHS, national medical director, oncology and genomics, UnitedHealthcare, explained that when it comes to quality and cost, experts must also think about the patient and how we define quality for them.

Ross Hoffman, MD, cardiologist, former chief medical officer, Centene, shared his perspective that there is plenty of money flowing within the industry. The nation spends a tremendous number of resources on health care. He often referred to the health care industry as a “team sport,” and to solve the infrastructure and many of the issues in pricing, the team needs to “[build] bridges with partners across the ecosystem so we can create win-wins that are necessary to create a sustainable, accessible, affordable health care system.” He saw a glimmer of hope for the industry, stating “as much complexity as there is, it’s my belief that there is talent and [that talent] will solve those [issues].”  

The panel jointly highlighted several themes, one of which was the relationship between pharmaceutical companies and the supply chain. Kent Rogers, venture partner, ARCH Venture Partners, explained that for decades, the relationship between the two has historically been transactional. Yet, in the provider space, they are starting to fix this notion of fee-for-service by leveraging value-based contracts. However, it has not been applied well. There are implementation issues related to logistics, stemming back from the original question of how to define value. Having data interoperability is a step in the right direction, but without logistics and proper implementation, it’s impossible to use.

Mr Rogers said, “Am I getting what I’m paying for? In the supply chain, the value to the patient is to improve their lives—is there waste in the system that [payers] can remove?” He also mentioned the perspective of employers, outlining that employers are often confused about whether they are getting value for what they pay for.  The logistics of setting up agreements usually stems from dealing with “what you have.” 

Dr Langer, as a practicing oncologist, felt that part of the issue is that the patient and the member should be front and center and that equity and access can be accomplished through thoughtful value-based contracting and partnership.

“When we’re having these conversations [about value-based care and contracting], they really are the ones that are getting squeezed. Our mission is to ensure that our members are receiving the highest quality care [and] determining what is that quality of care, [and] how do we keep it affordable, not just for the patient but also for the system,” she said.

According to Jayson Slotnik, JD, partner, Health Policy Strategies, Inc., when there is a complex problem to solve in health care, the teams need to find the common denominator everyone can agree on. From there, everything else should follow. 

“The definition of value is what’s in the best interest of the patient because it’s in the interest of the patient…We still care about the patient at the end of the day, [and] we understand and move forward with a principle that whatever we decide to do in the private sector [we should] not let the government decide what value is,” he said. 

Emily Colaizy, VP, Pharmaceutical Trade Relations, Prime Therapeutics, described that the driving benefit for any stakeholder (eg, payer, pharmaceutical company, or member) is an agreement that is mutually beneficial and not punitive. She emphasized that payers want members to be adherent, and they can partner with other stakeholders on outreach programs or partner with pharmaceutical companies and pharmacy benefit managers (PBMs) to help patients remain adherent. 

Ms Colaizy provided a recent example with Novartis for its drug Entresto. Through its new value-based agreement for Entresto, the program developed allows members to have access to the medication, which ultimately lowered the cost of care. 

“Allowing members the access to that medication lowered the total cost of care by 22%,” she said. “We ended up [removing] prior authorization altogether, completely removing barriers to access.” 

Using this framework, Ms Colaizy described that value for a member is their ability to access drugs, and the value to a pharmaceutical company is providing access to patients. These two factors should drive the total cost of care and provides value to health plans.

The panelists further discussed the challenges of implementing value-based care and the lack of clarity in defining value across different health care systems and payment models. They emphasized the need for collaboration among stakeholders to address issues such as high prescription costs, lack of transparency in pricing negotiations, and the need to focus on patient outcomes rather than just cost. Overall, they advocated for a more open-minded and collaborative approach to designing value-based care contracts and improving access to medicines for patients.

Reference 
Colaizy E, Slotnik J, Ruwitch Langer L, et al. Payers and Value Based Contracting – What is the Future. Presented at: Asembia Summit 2024; April 30, 2024; Las Vegas, NV.