Conflicting Definition of Value for Payers, Other Stakeholders
Each specialty pharmacy stakeholder has a different definition of value.
There are many moving parts that must be incorporated into value proposition. In health care, these factors must work together seamlessly, despite traditionally being kept separate. Stakeholders all have different concerns and perspectives regarding value proposition.
In a session titled Variables of Value Proposition—Payer Perspectives presented at the Asembia Specialty Pharmacy Summit 2017, panelists provided the unique viewpoint of payers and the factors that help determine value. The panelists noted that for manufacturers, there is a focus on the drug itself and how it affects the patient.
Payers must determine how a product provides value for a specific patient instead of the entire health care industry. They look at population management across its members, which is drastically different from the manufacturer’s perspective. Specialty pharmacies are tasked with ensuring a patient receives the proper treatment and remains adherent to it.
In the past 5 years, specialty pharmacies have become ultra-focused on disease and specialized, while payers have started including accountable care organizations and integrated delivery networks. This shift has changed how payers perceive value in limited networks, according to panelist Dawn Rich, principal, Global Pricing & Market Access, Skysis.
“There’s a lot of angst around it because we’re trying to figure out how to manage the spend in health care and how to communicate the value of our products within a smaller section of membership,” Rich said.
Another consideration is that manufacturers are increasing in size or are trying to diversify themselves through research and development partnerships. This can cause barriers in planning value proposition, according to the panel. Another limiting factor is limited distribution networks, which may affect how payers manage value, since specialty pharmacy is always changing.
This means that payers must change their models along with pharmacies. The speakers also noted that limited distribution networks can severely restrict their cost-containment strategies and force payers to spend a substantial portion of time getting the most valuable specialty pharmacy in their network.
Another trend discussed during the session was that payers are now calling for specialty pharmacies to provide real-world data that can be leveraged to drive formulary and contracting decisions. Looking at a particular episode of care, it may be challenging for payers to discern value for a drug, especially in low-volume disease states where multiple drug treatments exist.
This can result in limited data for each drug and would require a partnership with a specialty pharmacy to determine value, according to the panelists. The speakers also stated that if payers see value a drug brings to a patient, then they can better understand that the high cost for a specialty drug is worth the price.
“Each stakeholder has a definition of value. As a health plan, we’re committed to providing access to affordable health care,” said panelist John Fox, senior medical director, Priority Health. “When the addition of a new therapeutic regimen adds to the total cost of health care without a measureable reduction of other elements of care, it’s very challenging.”
Value is no longer just about the price of a drug, but also involves the integration of clinical programs and outcomes. The clinical outcome is tied to the standard of care, but sometimes is irrelevant to the payer because they are not able to track that particular outcome, causing a disconnect about the definition of value, according to the panel.
If the payer is able to obtain patient data, it is sometimes unusable, despite being valuable in other sectors of the industry, according to Fox.
“One of the key elements of any performance-based contract is agreeing on clinically relevant measure and having access to that measure in a consistent, timely fashion,” Fox, said. “Perhaps in the future, we would be able to incorporate patient-reported outcomes into an outcomes-based contract. In general, we have a hard time evaluating patient-reported outcomes as payers—we just don’t have a good way of incorporating those in a contract.”