- As value-based contracts gain increasing traction in the healthcare system, Merck and UnitedHealth are teaming up to investigate exactly what makes those deals tick and how to improve them.
- On Thursday, the duo announced a multiyear project under which they will use patient information collected by the UnitedHealth's Optum, a health services business, to create and test pay-for-performance models. The goal is to explore such models' "potential for broad adoption among health insurance companies, pharmacy benefit managers (PBMs), and pharmaceutical companies," according to a statement.
- The premise of outcome-based deals is that payers or PBMs offer rebates and discounts to drugmakers depending on how well a medication helps patients — more if the health benefit is high, less if it's low. In essence, these are compromises between the former parties, which want to pay as little as possible for a drug, and medicine developers, which want coverage and formulary inclusion for their products.
"One of the challenges that's existed in these types of agreements broadly in the space is that payers have access to claims information which … is a really good way to look at event utilization and cost, but doesn't really provide a depth of clinical information around the patient's profile and particular disease state," Optum Life Sciences president Curt Medeiros told BioPharma Dive.
"A big part of what we're trying to do is: how can we leverage electronic health record data attached to claims to have a better profile of the patient that we can use to both design as well as adjudicate outcomes-based contracts," he said.
Medeiros added that the partnership has an early phase that researches value-based deals and their models and methods, and then a later phase that would assess "potential opportunities of mutual interest between Optum and Merck to pursue." Optum is also open to working with other drugmakers on better understanding and shaping such contracts.
Merck, meanwhile, has been experimenting with value-based contracts in recent months like many of its big pharma peers.
Last October, for instance, the drugmaker inked a deal with insurer Aetna that tied rebates for the type 2 diabetes medications Januvia (sitagliptin) and Janumet (sitagliptin and metformin HCl) to certain "treatment objectives," though the companies didn't elaborate further in a statement. Outcomes-based deals for diabetes drugs, however, have hinged on patients' blood sugar levels.
In large part, the newfound interest reflects the growing need for pricing solutions across the healthcare spectrum.
Drugmakers, battered by criticism from lawmakers, patient advocacy groups and the media for the hefty price tags on some of their products, are working to ensure that backlash doesn't tear away market share. To that end, pharmaceutical companies have doubled down efforts to price their drugs lower to keep them on store shelves and covered in insurance plans.
At the same time, payers and PBMs have strengthened their negotiating power, putting added pressure on pharmaceutical companies to find new agreement models.
“Our collaboration will create a unique data-driven platform to enable modeling and analysis of innovative contracts that are needed to move to a value-based health care model,” Susan Shiff, senior vice president for Merck's Center for Observational and Real-world Evidence, said in a May 26 statement.