Welcoming Big Pharma to the Big Tent of Value-Based Care

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The article, titled “The Big Tent of Value-Based Care Has Room for Big Pharma,” asserts that rising pharmaceutical costs are an ever growing challenge for healthcare organizations across the country. “At Intermountain Healthcare and other integrated health systems, prescription medications represent the fastest-growing expense category — rising by about 13 percent per year,” the article says.

Intermountain has long been focused on improving the value of the care it provides to the communities it serves, which has required constant collaboration amongst hospitals, physicians, and payers. Kaiser and Lee say that the fundamental question facing integrated systems like Intermountain is: “As payers and providers work together to improve value, will pharmaceutical companies join that effort, or will they act as vendors that merely maximize short-term profits for shareholders?”

The article contends that pharmaceutical companies can benefit from being involved in the effort to improve value. For example, their industry is facing rapidly increasing regulations and restrictions from state and national legislation.

“So far in 2016, at least 14 U.S. state legislatures have considered bills to address the rising cost of prescription drugs and to increase transparency on how pharmaceutical companies price their products,” the article says. “If market forces cannot control costs, regulation will step in, as the pharmaceutical industry is aware.”

Kaiser and Lee propose four ways pharmaceutical companies could be involved in value-based care:

  1. Rebates based on a drug’s effectiveness. A drug manufacturer could contractually agree that when a patient does not respond to the therapy as expected, the company will rebate the cost of the therapy.
  2. A fixed rate per patient. Drug companies could agree on a fixed rate for each medication (or group of medications within a therapeutic category), allowing for more predictable expenses and copays.
  3. Collaboration in bringing drugs to market. Health systems could aid drug companies in bringing new drugs to the market faster for less cost by allowing them to utilize the systems’ anonymized patient data.
  4. Joint analysis, with providers, of prescribing practices. This will allow drug makers to become more of a partner with providers in improving prescribing behavior, medication adherence, and related patient outcomes.

Each of these four ideas is further explained in the article, and various examples of success are provided as well.

“Achieving value-based care is difficult when some stakeholders operate outside the tent. Providers, payers, and patients are waiting with open arms for drug companies to come inside,” the article concludes.

Click to read the whole NEJM Catalyst article.