Benefits and Challenges of Performance-Based Managed Entry Agreements: Report From an ISPOR Payer Summit


Brian O’Rourke, PharmD, Chair of the ISPOR HTA Council, Ottawa, Ontario, Canada; Mark Trusheim, MSc, NEW Drug Development ParadIGmS, Massachusetts Institute of Technology, Boston, MA, USA; H. Arturo Cabra, MSc, ISPOR, Lawrenceville, NJ, USA


As more innovative therapies for life-altering and life-threatening diseases enter the global marketplace, the clinical and financial uncertainty associated with the new treatments presents a major challenge for decision makers. An increase in accelerated regulatory approvals and high costs for many new treatments amplify the challenge. Performance-based managed entry agreements can help manage that risk for all stakeholders and so promote appropriate and timely patient access to promising therapies.1 However, payers continue to assess the benefits and challenges of performance-based contracting. For example, payers have expressed concerns regarding their complexity and administrative burden, and questioned if the financial rewards justify those added costs.

In April 2021, ISPOR sponsored a virtual payer summit to provide a forum to discuss the benefits and challenges of performance-based managed entry agreements, to identify efficient approaches to develop and scale up these types of agreements, and to identify best practices in their development and implementation. The ISPOR Payer Summit attracted over 60 participants. To ensure perspectives from multiple stakeholders were being addressed, the summit included representatives from health technology assessment (HTA) agencies, the pharmaceutical industry, patient groups, and academia as well as representatives from public and private payers in North America and Europe.

The summit consisted of 2 phases. Phase 1 involved a series of short presentations about the benefits and challenges of implementing performance-based agreements. Phase 2 consisted of breakout sessions to address specific topics and strategies to capitalize on the benefits of performance-based managed entry agreements.  The summit was organized by the ISPOR HTA Council and moderated by Mark Trusheim, MSc, Strategic Director, NEWDIGS and Visiting Scientist, Massachusetts Institute of Technology, Cambridge, MA, USA.


Martin Wenzl, PhD and Suzanne Chapman, health policy analysts at the Organisation for Economic Co-operation and Development Directorate for Employment, Labor and Social Affairs, summarized the results of a survey and publication on performance-based managed entry agreements for new medicines.2 The work included assessing the effectiveness of performance-based managed entry agreements in achieving their stated goals and identifying good practices and opportunities for improvement. Chapman pointed out that patient-level “Payment by Result” and population-level “Coverage with Evidence Development” were the most common performance-based agreement designs.

"Performance-based managed entry agreements should be reserved for specific situations. They should be designed to better address uncertainties and they should promote transparency of the process and on-product performance."

She explained that most of the agreements to date place financial objectives at the forefront, leaving uncertainty around product performance in the shadow. Chapman emphasized that most concerns associated with managed entry agreements stem from their limited ability to reduce uncertainty regarding product performance due to data quality or methodological issues; challenges encountered during coverage-associated decision making; high levels of confidentiality that is a barrier to independent evaluation; and administrative burden, particularly related to data collection and analysis. Chapman pointed out that performance-based managed entry agreements should be reserved for specific situations. They should be designed to better address uncertainties and they should promote transparency of the process and on-product performance.

Detlev Parow, PhD, Head of the Department of Medicines, Therapeutic Appliances and Remedies, DAK-Gesundheit, Hamburg, Germany, provided an overview of the German healthcare system and explained that Germany does not use managed entry agreements; however, they do use a form of selective contracting for one-time therapies that closely resembles the managed entry agreements process. “These products have mostly weak evidence at the time of launch, but they have very high promise or expectations. They are supposed to be a game changer cure for previously untreatable conditions.”

He pointed out that there are generally no entry barriers for pharmaceutical therapies in Germany as medicines can be launched immediately after regulatory approval. During the first year of market access, the product undergoes a health technology assessment by Germany’s Institute for Quality and Efficiency in Health Care to estimate its added benefit when compared to the current standard of care. He emphasized that due to the incredibly high price point with many new medicines, payers have a multitude of concerns, including those of patient benefit. To address these concerns, Germany is piloting a new “Pool of High-Risk Patients” program in which patients’ healthcare costs beyond a certain threshold are shared among all payers, thus relieving the financial burden of a single healthcare insurance company.

"Trust and collaboration between payers, providers, and policymakers is essential to address the challenges of significant variation in policies, guidelines, and regulations globally."


Donna L. Sullivan, PhD, Chief Pharmacy Officer, Washington State Prescription Drug Program, Olympia, WA, USA, shared the US payer perspective. She highlighted some of the barriers and challenges that US payers face when considering the use of managed entry agreements. For example, under the Medicaid Best Price program, manufacturers are required to report their average manufacturer price to the Centers for Medicare and Medicaid Services (CMS), which in turn sets the rebate for all Medicaid programs. “Manufacturers have been hesitant to enter into outcomes-based agreements with commercial payers in the United States because it is not clear how that would impact their average manufacturer’s price and how it would then be reported to the CMS.”

However, the CMS will be introducing substantial changes to their programs by distinguishing between the average manufacturer price for commercial purchasers that enter into outcomes-based agreements, and those who do not. This will create more opportunities for commercial outcomes-based agreements in the United States. Additionally, Sullivan pointed out that smaller purchasers experience the greatest challenges as they often lack in-house expertise for negotiations, data collection, and analysis. This could be averted by introducing analytic work-related cost-sharing between the manufacturers and the purchasers so that purchasers can utilize performance-based managed entry agreements with a better return on investment.

Indranil Bagchi, PhD, Senior Vice President and Head, Global Value and Access, Novartis, Switzerland, provided a perspective from industry using the current and future landscape of cell and gene therapies as an example. He emphasized that while there are fewer than 10 approved cell and gene products today over 1000 are in the pipeline, and the US Food and Drug Administration expects that by 2025 they will be approving 10-20 cell and gene products annually.

To better prepare for this influx of novel therapies, the needs and goals of each stakeholder must be considered. Bagchi presented Novartis’ experience with bringing cell and gene therapies to the global market via managed entry agreements and outlined multiple pathways through which these products have been brought to market. Additionally, he noted that trust and collaboration between payers, providers, and policymakers is essential to address the challenges of significant variation in policies, guidelines, and regulations globally.

"When patients are included in the development of the agreement, meaningful outcomes and key decision points can be better incorporated into it."


Results From the Breakout Sessions
The participants at the summit were divided into 6 breakout groups to discuss 3 separate topics associated with performance-based managed entry agreements implementation. Two groups focused on the types of products suitable for performance-based contracts, 2 groups discussed implementation barriers and opportunities to scale up performance-based contracting, and 2 groups reviewed best practices by highlighting some successful and unsuccessful examples of performance-based managed entry agreements.

Results From the Groups Discussing Product Suitability
Both groups pointed out that rather than identifying specific product classes or diseases, it is more important to consider characteristics of a particular technology or condition that might make it a suitable candidate for performance-based managed entry agreements. Most importantly, the characteristics of the condition itself should be considered. Products most suitable are those that could benefit patients suffering from life-threatening or severely debilitating conditions, particularly when no other viable treatment options exist. Other characteristics include high burden conditions or conditions that pose a severe health risk if immediate access to treatment is delayed. Additionally, technologies with high budget impact or exceedingly high costs should be considered. These types of drugs or technologies often offer theoretical efficacy and promise clinical benefits at product launch, but they typically enter the market with limited evidence and high uncertainty about the degree and durability of response. To minimize the clinical and financial uncertainties of the product and to demonstrate its value during the term of a performance-based contract, the groups proposed that centralized, standardized, measurable, and patient-focused data endpoints and outcome metrics should be established for product classes and therapeutic areas.

They also pointed out that products with existing evidence that have demonstrated the clinical and economic benefits of a treatment would not be good candidates for performance-based managed entry agreements. Additionally, products targeting health conditions with a lower burden of illness and relatively low health risk associated with delaying access should not be prioritized for these types of contracts. From a value standpoint, products with an unclear or low value proposition as well as products with marginal benefits are not considered good candidates. Finally, it was suggested to exclude products for conditions where outcomes are poorly defined or hard to measure as well as products where multiple competitors are available or soon to be launched.

Results From the Groups Discussing Barriers and Opportunities
Building on the first discussion, these groups also emphasized the high uncertainty around data collection and key outcome metrics as one of the major barriers to decision making and successful performance-based managed entry agreement implementation. They pointed out that the selected outcomes should be meaningful for patients, clearly defined, easily measurable, and potentially organized to be shared amongst payers. However, this becomes an issue for conditions where only mid- to long-term outcomes are clinically meaningful and relevant for the patient. In these cases, interim measures are often considered, but these interim outcomes must also be measurable and clinically meaningful. Another issue brought up was the lack of transparency in reporting clinical data, which can lead to a lack of trust between stakeholders. Payers would like to see a distinct shift in the financial risks associated with new products toward the manufacturer, particularly when the endpoints, milestones, or length of time to continue measurement are not clearly defined. Additionally, manufacturers or a third-party contractor could provide administrative and analytical support to payers to facilitate execution and management of the performance-based contract.

"If standardized frameworks are to be created for certain conditions or therapeutic areas, they must be anchored in science and allow for flexibility and outcome measure modifications if needed."


The group suggested several ideas to increase transparency and trust among the stakeholders. First and foremost, clinically meaningful and easily measurable ex-ante outcomes should be defined. To address the lack of national or international standards, a global policy provision or guideline on best practices, outcomes, and design of performance-based managed entry agreements would be beneficial. It was also suggested that a shared database of success stories should be created to enhance dialogue and information sharing, increase transparency, and set standards for outcome measurement and reporting. Most importantly, the groups noted that patient perspectives should be integrated into defining and identifying meaningful outcomes.

Results From the Groups Discussing Actual or Perceived Best Practices
The most important best practice identified for successful examples was the development of trust between manufacturers, patients, and payers. During all stages of the process of initiating and managing performance-based managed entry agreements there should be open dialogue between the stakeholders, especially with patients. It was felt that successful agreements are those that focus on the needs of patients. When patients are included in the development of the agreement, meaningful outcomes and key decision points can be better incorporated into it.

Additional best practices for performance-based managed entry agreements were identified. They should clearly outline outcome measures, data uncertainty, cost containment, real-world evidence collection and evaluation processes, and the process for performance adjudication. Dedicated data analytics expertise must be provided. The groups felt that if standardized frameworks are to be created for certain conditions or therapeutic areas, they must be anchored in science and allow for flexibility and outcome measure modifications if needed. In addition to having a nonrespondent refund or rebate, participants suggested that well-designed performance-based managed entry agreements also include explicit progress monitoring and a clearly outlined exit criteria.


How Can ISPOR help?
ISPOR continuously works on creating guidelines and tools to help improve decision making and to bridge gaps between stakeholders. ISPOR provides many training opportunities through workshops, short courses, and webinars, and with the help of the participants of this payer summit, several areas were identified for consideration by ISPOR:

1. Convene stakeholder groups to build trust via identifying feasible and meaningful outcome metrics for various conditions. The main barriers recognized during the summit were those involving the level of uncertainty and the lack of trust. Therefore, ISPOR could help facilitate multistakeholder working groups or task forces to develop guidelines, templates, and methodologies and to centralize and standardize outcomes for various therapeutic areas.

2. Leverage the ISPOR Patient Council to transparently get ahead of the technology curve in advance of the next waves of innovation. Working with patient groups and existing horizon-scanning organizations/networks, ISPOR could help identify and communicate promising therapeutic areas potentially amenable to performance-based managed entry agreements. The patient groups could also be engaged with other stakeholders to support data collection, identify outcomes of importance to patients, and participate in guideline development.

3. Develop a list of barriers and opportunities and update best practice guidance documents to reflect the current state of performance-based managed entry agreements. ISPOR has previously created multiple best practice guidelines that are widely used within the drug development and reimbursement arenas—these should be updated regularly to reflect the current barriers and opportunities. Compiling a list of barriers and opportunities identified during this payer summit would also be invaluable moving forward.



We would like to thank Ilze Abersone, BS, MS, Research Consultant, Vital Statistics Consulting, Hoboken, NJ, USA and Fabiana LoPiccolo-Stewart, Associate, Scientific & Health Policy Initiatives Department, ISPOR, Lawrenceville, NJ, USA for their support on the development of this article.



1. Garrison, LP Jr, Towse A, Briggs A, et al. Performance-based risk-sharing arrangements–good practices for design, implementation, and evaluation: ISPOR Good Practices for Performance-Based Risk-Sharing Arrangements Task Force Report. Value Health. 2013;16(5):703-719.

2. Wenzl M, Chapman S. (2019), “Performance-based managed entry agreements for new medicines in OECD countries and EU member states: How they work and possible improvements going forward”, OECD Health Working Papers, No. 115, OECD Publishing, Paris.

Your browser is out-of-date

ISPOR recommends that you update your browser for more security, speed and the best experience on ispor.org. Update my browser now