P4P Pharmaceuticals

The Status of Outcomes-Based Contracts

Outcomes-based contracts are supposed to be the next big thing.  When payers are not sure about the real-world benefits or cost of a treatment, outcomes-based contracts and help them diversity risk. For instance, CMS will only pay for the CAR-T product  Kymriah when “…these patients respond to Kymriah by the end of the first month after treatment.”

However, outcomes-based contracts are not easy to implement.  A paper by Duhig et al. (2018) surveyed AMCP members between May 12, 2017, to June 7, 2017 to get their answer.  Below is the list of items that are the top factors that are limiting factors for finalizing outcomes-based contracts with manufacturers, with the number in parentheses the share of respondents saying it is extremely or very limiting:

  • Inability to obtain accurate data/outcomes measures (73%)
  • Inability to discuss information that is outside the FDA-approved label 43%
  • Regulatory barriers that prevent disclosing information (40%)
  • Potential health care compliance risks (33%)
  • Inability/unwillingness of leadership to enter into an agreement with payer partners (30%)
  • Just an additional way to extract rebates from manufacturers (30%)
  • Privacy of patient data/HIPAA compliance (20%)
  • Leadership sees no value or necessity (13%)
  • OBCs in other countries were not optimal (10%)

What works?  Payers say:

  • Simple/easily measurable outcomes (91%)
  • Risk sharing between manufacturer/payer customer (88%)
  • Flexibilty in the type of contract (80%)
  • Sufficient size of patient population (77%)
  • Reasonable time frame of contract (68%)
  • Manufacturer support with data mining/infrastructure (43%)
  • Pharma support of case management and adherence/compliance initiatives (40%)
  • Potential inclusion of a mediator to analyze risk before OBC discussions are initiated (30%)


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