Prime Therapeutics, Eli Lilly support patient-centered value-based arrangements for prescription drugs

Next generation agreements may increase affordability, improve patient outcomes

July 28, 2020

With the backdrop of an unprecedented worldwide pandemic, Prime Therapeutics (Prime) continues to evolve its member-centric care strategies. The global health crisis has brought economic uncertainty, and the pharmaceutical industry is laser focused on the development of a coronavirus (COVID-19) vaccine. Meanwhile, the need to create affordable, accessible treatments that deliver their intended value must remain a priority for legislators and all stakeholders in the health care delivery chain.

U.S. health care spending increased 4.6% to reach $3.6 trillion in 2018, while retail prescription drug spending rose 2.5% to $335 billion.¹ A new wave of treatments for rare and orphan diseases used by a small number of patients can run up costs to $250,000 or more. By 2025, 10-20 of these revolutionary treatments that carry million-dollar price tags will be approved each year. As therapy costs rise, patients’ out-of-pocket costs are also increasing, and other barriers to care – like lack of transportation or proper nutrition – can keep medicines out of reach for some. These growing health care costs are unsustainable, creating a need for payment solutions that provide timely access to therapy.

As more curative and chronic disease therapies come to market, payers and pharmaceutical manufacturers must come together to prioritize patient needs with the goals of improving affordability and access to life enhancing therapies and removing barriers to a positive patient experience. To that end, Prime and Eli Lilly and Company (Lilly) issued a white paper aligning on policies for successful next generation value-based arrangements (VBAs). These innovative contracts between payers and manufacturers tie a drug’s net payments (list price minus discounts) to measures of value. VBAs may be designed to effectively prioritize patient needs, improve disease management and enhance overall quality of life.

“For more than a decade, Prime has led the industry in the VBA arena,” said Kelly McGrail-Pokuta, vice president, pharmaceutical trade relations for Prime. “We use our longstanding relationships with manufacturers to help ensure our clients’ investment in drugs yields patient outcomes commensurate with price of therapy. Our real-world pharmacy and medical claims data are integral to building an effective VBA. And Prime has an expert clinical team to track long-term measures that examine health care costs and events over time in addition to those who discontinued therapy. While progress has begun in addressing some policy barriers to greater deployment of value-based contracting, more needs to be done to fully realize the potential of VBAs across all markets.”

Next Generation Value-Based Agreements

VBAs are here to stay. They are one tool in a payer’s toolbox and may be leveraged to provide direct value to patients. For example, traditional VBAs have focused on outcomes measurable in claims data with substantial financial limitations due to Medicaid Best Price rules and anti-kickback statutes. But with next generation, patient-centered VBAs, potential patient benefits may include: the opportunity for patients to report real-world therapy outcomes, reduced out-of-pocket costs through benefit design or other affordability solutions, care management and support services that might improve medication adherence, and better data sharing among payers, manufacturers and providers which can lead to more accurate prescribing. These next generation VBAs have tremendous potential but do require meaningful policy changes.

To help inform VBA negotiated terms, Prime utilizes the Institute for Clinical and Economic Review (ICER) reports. ICER is an independent third-party organization that evaluates the cost-effectiveness of a drug. ICER uses the quality-adjusted life year (QALY) value assessment metric– a standard for measuring how well a medical treatment improves patients’ lives relative to the therapy cost. Prime incorporates findings from ICER and other evidenced-based groups into VBAs, which its clients can use to steer patients to therapies proven to be safe and effective while also reducing a patient’s share of a drug’s cost through formulary benefit design.

“Above all, improvements to VBAs require that the ‘value’ represents value to patients and reflects improvements in meaningful clinical outcomes and quality of life metrics,” said Erin Huntington, Lilly senior director, PRA strategy & marketing.”

VBAs alone will not solve for high cost drugs. Solutions are also needed for certain regulatory and operational challenges. Prime and Lilly recommend state and federal policymakers consider adopting policy changes to meet these challenges, including the development of shared electronic health records (EHR) platforms for increased data transferability and enacting change that would allow payers and manufacturers to freely provide support services, like transportation to a health clinic, under so-called “safe harbors,” free from the scrutiny of anti-kickback statutes.

Many pharmacy industry and patient advocacy groups have a stake in effecting regulatory and policy changes. The Network for Excellence in Health Innovation (NEHI), a nonprofit health policy institute, brings together payers grappling with VBAs to explore ways to bring a patient voice to the forefront, and to translate that into VBA success metrics. On April 16, Prime participated in NEHI’s roundtable working session as part of its project titled “Next Generation Value-based Arrangements: What Are the Stakes for Patients.” Payers, manufacturers, pharmacy benefit mangers (PBMs) and patient groups will discuss how VBAs reward actual results in patient outcomes, health care utilization and medication adherence achieved by medicines.

“In the last decade, VBAs have evolved from medication adherence agreements to include financial compensation when drugs are in excess of their relative value. Prime is pleased to have many successful VBAs and proud that we use our unique capabilities to fulfill contract terms.” Pokuta added, “Currently, we’re looking forward to outcomes-based arrangements and those that reduce total cost of care. We’re headed for a future state where patient-reported outcomes are layered into success measures, along with Prime’s integrated medical and pharmacy data. This will require collaboration with providers and pharmacies and will better enable us to assess treatment and disease progression. And, as the regulatory environment allows to account for some of the issues identified in this paper, we’ll structure VBAs to streamline medication access and lower member cost sharing.”

In addition to managing drugs using VBAs, Prime provides PreserveRxSM to clients, an industry-leading reinsurance product for gene therapies. As part of Prime’s value and health outcomes strategy, this innovative offering is designed to provide additional financial protection for clients and preserve patient access to lifechanging therapies.

  1. CMS Office of the Actuary Releases 2018 National Health Expenditures. Centers for Medicare & Medicaid Services. Accessed March 10, 2020.
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