OBJECTIVES: Rising pharmaceutical prices and focus on pay-for-performance are driving U.S. health plans to consider entering into risk-based contracts (RBCs) with drug companies whereby net price is tied to specific clinical metrics. This study seeks to gauge payer willingness to enter these contracts and how their preferred metrics for measuring efficacy vary by indication.

METHODS: Payer willingness to participate in RBCs was obtained by a survey of 30 pharmacy and medical directors at U.S. commercial health plans in January 2018. Preferred RBC metrics ifor type 2 diabetes, chronic obstructive pulmonary disease, and bipolar disorder were obtained by surveys covering 90 total directors in early 2018.

RESULTS: Surveyed payers expressed willingness to enter into RBCs, including 37% indicating they were “very willing” and 57% “somewhat willing” to do so for bipolar disorder. The preferred metrics for specific indications overwhelmingly favored a measurable clinical outcome in line with treatment guidelines. For instance; 76% and 60% of payers cited HbA1c control and medication compliance, respectively, for type 2 diabetes; for bipolar disorder, the most commonly preferred metric was reduction in cognitive impairment (64%). Meanwhile 67% of payers identified improvements in patient exacerbation, patient lung function, and readmission as preferred metrics for COPD. Financial measures ranked lower as a preferred metric for COPD and type 2 diabetes.

CONCLUSIONS: U.S. payers are willing to enter RBCs and their preferred metrics are mostly focused on clinical data typically captured as part of regular checkup appointments with physicians. The reduced emphasis on cost metrics suggest that payers want to divorce efficacy from downstream spending, likely reflecting a strategy of cautiously moving into RBCs. As payers and pharma become more comfortable with RBCs, financial metrics such as effect on total spending per patient will likely become more entrenched as preferred metrics for these contracts.