Cost versus Cure: Achieving a Value-Based Care Algorithm We Can Live With

Specialty Pharmacy TimesJuly/August 2016
Volume 7
Issue 4

Payers, providers, manufacturers, and patients will need to navigate a complicated landscape in the shift to value-based health care.

WHEN THE SPECIALTY PHARMACY TIMES EDITORIAL TEAM proffered the topic of cost versus cure, and the responsibility of the payer (including the employer and patient), prescriber, patient or pharmacy, I hesitated.

Answering the question by making one party more responsible than another reinforces the legacy silos that must be razed if we wish to transform health care into a value-based system. Arriving at one responsible party would necessitate a single-payer system, which is far from likely in the United States.

Since that is the case, every party shares an equal burden of responsibility on decision points relating to cost versus cure. Cure is the key word. We have cured hepatitis C. But we have yet to cure cancer. In fact, cancer is going to trend toward being a hugely expensive chronic condition in the near future.

According to an article by Alice Park in the April 4, 2016 edition of Time, there are currently 3400 immunotherapy trials ongoing in the United States. The better questions for the editorial team to ask are how long is it going to take the needed parties to engage in non-threatening, meaningful dialogue to create solutions, and who leads that conversation?

The short answer to the second question is all of the above and more. Real alignment among all stakeholders, inclusive of the aforementioned, is arguably the most urgently needed new practice in health care. There must be immediate meaningful discussions about the value of care (including pharmaceutical therapies) and the value of life, led by plan sponsors, commercial and government payers, manufacturers, pharmacy benefit managers, policy makers, patients, and patient advocates.

As with any industry, health care decisions are all about the allocation of scarce resources. Those allocations are based on the value placed on every element that serves or receives service from the industrial players. Perhaps the most difficult assignment of value involves that of the extension of life, a figure that US health care policy makers have yet to quantify. In 2014, the independent Institute for Clinical and Economic Review set the value of each quality adjusted life year (QALY) at $100,000 to $150,000.

This range includes, among other elements, the incremental costs associated with drugs, medical devices, and procedures. It should be noted that the question of how to define health care value extends well beyond the United States. The approach to quantifying the value of new pharmacological therapies in the UK, for example, is supported by the National Institute for Health and Care Excellence (NICE).

This organization is tasked with providing evidence-based guidance about the cost-efficacy of new treatments, among other responsibilities, and national law requires that therapies approved by NICE be included in the National Health Service. In general, NICE refuses to recommend medications that cost more than £20,000 to £30,000 per QALY. Historically, these non-recommended therapies have not been covered under the UK single-payer system.

Back home, it appears that until US health care policy makers assign a similar QALY value determination nationwide, we will continue to wade through a disjointed process by which access to, and prices for, specialty medications, including nascent immunotherapeutics, are determined. In the foreseeable future, here is what payers, manufacturers, prescribers, patients, and specialty pharmacists should expect and do in order to navigate the shift to value-based health care.


Expect to prove you are taking steps to prevent events detrimental to your well-being or events that frequently lead to acute care requirements. Acquire your electronic health record and be prepared to provide increasing access to your health history as a coming “price of admission.” When it comes to pharmaceuticals specifically, be 100% adherent to your medication regimens and be prepared to prove that you are.


Be prepared to educate your patients on step therapy and the importance of adherence. Be further prepared to provide outcomes data, including lab data, to your pharmacist partners and payers in order for your patients to gain access to the most appropriate and effective medication therapy available. Refer your patients who require specialty drugs to companies that can help them navigate the prior authorization process so you and your staff can focus on provision of care.


Expect the drumbeat of those railing against ever-increasing drug costs to continue to rise. Be prepared to accept a shift in thinking about the amount of time required to recoup research and development expenditures for new therapies. It will almost certainly be a longer cycle than the one you currently drive toward. An industry expert recently posited the idea of payment, based only on manufacturing costs for breakthrough therapies, until a sufficient amount of real-world data is collected on efficacy to determine value-based pricing and reimbursement.

You can also expect serious downward pressure on patent length. Demonstration of the therapies’ efficacy and value in real-world conditions will be among the top ways to show value to satisfy your shareholder, payer, patient and policy maker constituents. Engage patient support services companies and pharmacy fulfillment providers proven to improve adherence and outcomes, especially within your limited distribution networks.

Payers & PBMs

Expect your spending on prescription medications, especially specialty pharmaceuticals, to rise unless you are prepared to limit access and increase patient out-of-pocket costs and copays considerably. Expect uncertainty in the amount of time your customers, including patients, will need to spend on new prescription therapies, especially immunotherapeutics and immuno-oncolytics. Insist on robust clinical trials, or better, real-world results for value derivation and pricing for specialty drugs. Install electronic health records systems that enable physicians and pharmacists to deliver and access outcomes data critical to value-based care and analysis.

Specialty Pharmacists

In the short to midterm, expect to assign additional resources to the prior authorization process if you are concerned about patient access to therapies and improving health outcomes. Be prepared for challenges in acquiring lab data needed to demonstrate that your medication management protocols bring real-world outcomes to validate the prices of the drugs you are dispensing from your patients’ prescribers due to ongoing resource constraints.

Ultimately, value-based care will require a value algorithm, perhaps customized by disease state. The development of that algorithm will require difficult conversations among multiple parties not accustomed to collaboration. But, the time is coming soon that we will have to rip off the band aid and tackle these decidedly difficult questions, together, in order to affect meaningful change. Otherwise, we are much more likely to suffocate in our individual silos.

About the Author

MARC O’CONNOR is chief operating officer for Curant Health. Curant Health treats patients nationwide through its medication management protocols, including medication reconciliation and establishment of personalized medication regimens, and supports its provider partners and care coordination with its award-winning EHR, MedPlan. Curant’s health care professionals provide individualized care proven to improve the lives and reduce the overall health care costs of chronically ill patients.

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