ICYMI: Survey highlights key barriers limiting number and scale of new approaches to paying for medicines

Michelle Drozd
Michelle Drozd March 27, 2017


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In recent years we have seen remarkable scientific breakthroughs in the discovery of new therapies to treat some of the most challenging diseases faced by patients. These groundbreaking medicines have the power to change and save lives, but to help ensure patients have affordable access to these therapies, we need a payment system as innovative as today’s medicines.

To get to this new system, the private market has started to develop payment models that link reimbursement to real patient outcomes, and, in recent years, we’ve seen a steady increase in the number of innovative payment arrangements that tie payment for medicines to clinical results or otherwise reduce payer risk.

This progress is an important step in the right direction but regulations developed for an earlier era are limiting the number and scope of these new payment approaches. A recent survey of PhRMA member companies sheds light on the regulatory and operational barriers impeding broader implementation of innovative contracting arrangements.

Outdated rules in the following three key areas: government price reporting, Anti-Kickback Statute (AKS), and FDA rules on communications with payers, were reported by survey respondents as the greatest legal/regulatory barriers to advancing new approaches to paying for medicines—largely echoing earlier results from a payer survey on the same topic, as well recent NEHI recommendations based on insights from leading biopharmaceutical companies, payers and pharmaceutical benefit managers.

In addition to regulatory barriers cited in the PhRMA member survey, biopharmaceutical companies noted that significant operational barriers are standing in the way, as well—particularly when it comes to paying for outcomes based on patients’ real-world experiences with a particular medicine. In fact, companies cited inability to measure and/or track such real-world outcomes as leading barriers to implementation of new approaches to paying for medicines.

In response to these challenges, stakeholders from across the continuum have begun to coalesce around common-sense solutions to these issues, including the need to:

  1. Modernize price reporting requirements so that stakeholders can explore larger scale contracts that increase competition.
  2. Create a new safe harbor to the AKS to protect value-based arrangements and provide clarity for companies.
  3. Allow a full range of truthful and non-misleading communications between innovators and payers for all medically accepted uses of medicines.
  4. Improve capability for measurement through initiatives that make it easier for stakeholders to track outcomes across the health system, prioritizing measurement of factors that matter most to patients.

Read more about the biopharmaceutical industry’s leadership in partnering to advance a value-driven health care system here.  

Topics: Alternative Payment Models, FDA Modernization