Guest post: Developing new payment models to ensure patients have access to high-investment therapies

Like many health care stakeholders, managed care pharmacy professionals applaud the accelerating pace of biopharmaceutical innovation.

Guest ContributorSeptember 6, 2018

Guest post: Developing new payment models to ensure patients have access to high-investment therapies.


Conversations and healthy debate about issues facing our industry and the health care system are critical to addressing some of today’s challenges and opportunities. The Catalyst welcomes guest contributors, including patients, stakeholders, innovators and others, to share their perspectives and point of view. Views represented here may not be those of PhRMA, though they are no less key to a healthy dialogue on issues in health care today.

Like many health care stakeholders, managed care pharmacy professionals applaud the accelerating pace of biopharmaceutical innovation. Medical research and development is bringing forward hundreds of new therapies that offer the promise of cures or “near-cures” for many of history’s most dreaded and deadly diseases.

This is great news for humanity. And it’s a testament to the remarkable work of the biopharmaceutical industry.

But it goes without saying that challenges remain. The key challenge for managed care pharmacy is how to ensure that needed products are broadly covered and widely available for patients in an era of constrained budgets. In other words, how can we continue to afford the many high-investment and high-cost therapies coming to market each year?

The challenge is compounded by the dynamic nature of our insurance system, in which patients may switch among carriers before the effects of a therapy are fully realized.

The Academy of Managed Care Pharmacy (AMCP) is working hard to address this challenge. It was the topic of our July Partnership Forum, Designing Benefits and Payment Models for Innovative, High-Investment Medications. The two-day event in Baltimore gathered insights and suggestions of more than 30 experts representing health plans, integrated delivery systems, pharmacy benefit managers, employers, national professional associations, the federal government and biopharmaceutical companies. We are also happy to note that PhRMA was one of the stakeholders providing input.

Participants agreed that developing new models will be imperative if we hope to maintain our health care system’s financial viability. Promising suggestions that emerged included the use of long-term annuity payments, reinsurance markets, performance-based payments and milestone contracting. But participants also agreed there is no “one-size-fits-all” approach to address the needs of all stakeholders and all emerging therapies.

Selecting the appropriate payment model will be driven by factors such as the number of patients affected by a disease, the payer size and whether a therapy is curative or addresses a chronic condition.

The forum also brought to light significant regulatory and policy issues that must be addressed to facilitate pilot programs around these models. Hurdles now include the Medicaid best price requirements and the federal Anti-Kickback Statute that constrain the use of value-based contracting and other innovative ideas. Participants agreed that safe harbors should be created to allow innovative and creative approaches to be piloted.

In addition, participants noted that stakeholders must have access to real-world evidence to evaluate the efficacy and safety of new therapies over time. The fact that patients frequently switch among payers, however, can constrain timeframes for payment contracts.

These ideas and more will be published in greater detail in an upcoming issue of the Journal of Managed Care & Specialty Pharmacy (JMCP). The “proceedings” document will include an overview of current financial payment models, specific challenges inherent in each model, a list of potential solutions and a list of legal, regulatory and operational hurdles that must be considered in development of solutions.

I am proud of the work AMCP does in bringing together stakeholders from across the health care spectrum to address tough challenges. Our Partnership Forums provide a safe environment in which we can set aside preconceived notions and develop consensus solutions that will ensure all patients receive the best health care possible.

Susan A. Cantrell, RPh, CAE, is CEO of the Academy of Managed Care Pharmacy.

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