In response to rising healthcare costs, value-based arrangements (VBAs) have emerged as a mechanism for transforming how we pay for high-cost therapies. As we think about how VBAs fit into the larger effort of the United States healthcare system to transition to value-based payment, it is important to consider the strengths and limitations associated with this model and to set appropriate expectations for what VBAs can realistically achieve. For example, for VBAs to meaningfully affect overall healthcare spending, there needs to be a sufficient number of products that meet the ideal criteria for a value-based contract.These products also need to represent a meaningful share of healthcare spending, and the VBA contracts need to be designed with enough financial risk to actually influence spending. Although there are limited data about the components of current contracts (eg, how much financial risk is involved, product and class specifications), VBAs will likely not be a singular solution for improving healthcare cost containment. Instead, VBAs offer an opportunity for the US healthcare system to achieve higher value for dollars spent when implemented in combination with other value-based payment mechanisms and policies that disincentivize low-value care.