Payers and biopharmaceutical companies are increasingly interested in outcomes-based agreements in which payments for a treatment are based on how well it helps patients meet specific health outcomes.
The exchange of health care economic information (HCEI) is vital in today’s changing health care environment. With a growing focus on determining the value of a treatment, payers and biopharmaceutical companies are increasingly interested in outcomes-based agreements in which payments for a treatment are based on how well it helps patients meet specific health outcomes. These contracts could help combat rising medical costs, gain acceptance for new products among more patients, and share the risk associated with the total cost of care.
However, biopharmaceutical companies are subject to federal laws and regulations that limit what they can say proactively about their products and under what circumstances. But these contracts require detailed information about how effective a treatment is compared with other therapies, whether it will help patients reach quality outcome measures, and its effect on readmissions or the total cost of care, among other questions. Not all of this information is contained in the label approved by the FDA, which is the basis for what is permissible in medical product communications. And until recently, there were prohibitions against, and uncertainty regarding, how and when biopharmaceutical companies could provide that important information to payers.
The exchange of HCEI had been governed by a mere 216 words in the Food and Drug Administration Modernization Act of 1997. Without further regulatory guidance, there was a lack of clarity on what could be shared, with whom, and under what conditions. Total cost of care is on the minds of many health care stakeholders, and it became clear that additional flexibility was needed to inform formulary committees, not just providers, about medication benefits, risks, and costs.
The National Pharmaceutical Council (NPC) has long been involved in this issue, playing a leadership role in the national conversation about HCEI since 2010, with research that raised awareness of the policy and legal ambiguities associated with case studies.1,2 We’ve held a town hall meeting on the topic for bio- pharmaceutical compa- nies, hosted conferences, and authored a series of articles addressing the issue.3 In addition, we provided testimony, submitted comments, and partnered with the Academy of Managed Care Pharmacy on recommendations to clarify how to exchange HCEI and what infor- mation should be available for payers to help plan and prepare for new product and new indication approvals, among other activities.
In June, the FDA issued final guidance regarding communications about HCEI between biopharmaceutical companies and payers. This new guidance specifies:
Having more information to better inform decisions benefits everyone. A study the NPC conducted with Xcenda found that payers want multiple types of information and that their current decision making is limited by the available data. Payers believe the benefits of broader communication outweigh the potential harms and that better information can improve patient outcomes and potentially lower costs.4
Although having better access to HCEI can enable broader conversations in which value-based contract terms are discussed, other barriers remain. As recent NPC research demonstrates, these other regulatory barriers make it challenging to advance value-based contracts.5 One of these challenges, the need for an antikickback safe harbor for value-based contracts, may soon be addressed. In August, the Department of Health and Human Services’ Office of Inspector General issued a request for information on how to address the regulatory provisions that may act as barriers to value-based care. Improving the information that can be shared as the FDA outlines in its guidance is the first step. Other changes are needed to make forward progress in contracting efforts.
In coming years, as more complex treatments and medical innovations are developed, the ways in which we organize, deliver, and pay for health care will only increase. The FDA guidance on communication between manufacturers and population health decision-makers and payers is the first step needed to pave the way for more value-based contracts, more efficient coverage determinations, robust health care decision-making, and, ultimately, better and more appropriate care for patients.
1. Garrison LP, Neumann, PJ, Radensky P, Walcoff SD. A flexible approach to evidentiary standards for comparative effectiveness research. Health Aff (Millwood). 2010;29(10):1812-1817. doi: 10.1377/hlthaff.2010.0692.
2. Neumann PJ, Saret CJ. When does FDAMA Section114 apply? Ten case studies. Value Health. 2015;18(5):682-689. doi: 10.1016/j.jval.2015.02.013.
3. Perfetto EM, Bailey JE, Gans-Brangs KR, Romano SJ, Rosenthal NR, Willke RJ. Communication about results of comparative effectiveness studies: a pharmaceutical industry view. Health Aff (Millwood). 2012;31(10):2213-2219. doi: 10.1377/hlthaff.2012.0745.
4. Xcenda/AmerisourceBergen and the NPC. Information wanted: finding the balance in pharmaceutical evidence exchange with payers and providers. NPC website. npcnow.org/system/files/research/download/NPC_Issue_Brief.pdf. Published August 2017.
5. NPC. Regulatory barriers impair alignment of biopharmaceutical price and value. NPC website. npcnow.org/system/files/research/download/NPC_PriceBarriersWhitePaper_Final.pdf.