MACRA and Value-Based Contracts

Under US regulations, such as the Medicare Access and CHP Reauthorization Act of 2015 (MACRA), part of any US physician’s reimbursement will be based on patient outcomes. Similarly, value-based contracts will reward manufacturers for drugs that improve patient outcome, and penalize them for treatments that don’t show clear results. Insurers have moved to value-based contracts in hepatitis C and oncology drugs and are moving it to multiple sclerosis and rheumatoid arthritis, according to a recent study (1), Since 2015, Novartis, Lilly, Gilead, Amgen, Sanofi and Regeneron have set up such contracts for specific therapies (2-4).

This approach increases risk, because physicians and drug companies have little control over patient behavior. The key is developing methods that trick people into making the right decisions, says Dr. Bertalan Mesko, The Medical Futurist, a physician and blogger. He notes the health insurance company, Oscar, which offers its subscribers health trackers and gives gift cards to those who walk more than 10,000 steps per day. Currently, he says, a small number of people in the US use most of the nation’s healthcare services. Some insurers are considering strongarm tactics, such as dramatic increases in premiums, for patients who choose to live unhealthy lifestyles.

References

1. R. Desai, “Health Plans ae Interesting in Tying Drug Prices to Patient Outcomes,” Press Release, avalere.com, June 16, 2016, accessed April 7, 2017. 
2. “Cigna Implements Value-Based Contract With Novartis for Heart Drug,” News Release, cigna.com.
3. S. Barlas, “Health Plans and Drug Companies Dip Their Toes into Value-Based Pricing,” nih.gov, Pharmacy and Therapeutics, January 2016 41(1); 39,40, 41, 52.
4. T. Staton, “Most US Payers are Eyeing Outcomes-Based Drug Pricing Report,” fiercepharma.com.

Article Details

Pharmaceutical Technology
Vol. 41, No. 5
Pages: 18

Citation

When referring to this article, please cite it as A. Shanley, “MACRA and Value-Based Contracts” sidebar to “Innovating in a Value-Based World," Pharmaceutical Technology 41 (5) 2017.