Paying For Medicines Based On Health Outcomes

Princeton, NJ, USA - With the rising cost of new medicines, health care payers and providers are looking for the best bang for their buck – the most effective treatment at the lowest cost.  Payers (insurance companies, managed care organizations and governments) are now asking manufacturers for additional evidence of product performance and linking this to reimbursement, i.e. “Does this new treatment work well in practice? Does it provide value for the money spent?”

Basing reimbursement on the health and cost outcomes achieved is a big change from payment based on simply providing the product.   Now, the product’s performance is being tracked in a target patient population, over a certain period of time.  The data gathered while a medicine is used in actual clinical practice reduces the business risk and uncertainty for payers as reimbursement can be adjusted, and provides valuable real-world evidence for the health care community.   As a result, there has been a significant increase in pay-for-performancecoverage with evidence development, or risk-sharing agreements between medical product manufacturers and payers.

In response to this growing trend, the International Society for Pharmacoeconomics and Outcomes Research (ISPOR) just published guidelines on “Performance-Based Risk-Sharing Arrangements (PBRSAs)—Good Practices for Design, Implementation, and Evaluation.”   This report, published in Value in Health, makes recommendations for good operational and research practices.  It also highlights the value of additional evidence collection when compared to the cost.

According to Task Force co-chair Lou Garrison, PhD, Professor in Pharmaceutical Outcomes Research and Policy Program at the University of Washington in Seattle, “It is important for policy makers to recognize that this information is a ‘global public good’, with a potential worldwide benefit of improved resource-allocation decisions from the additional research.”

Task Force co-chair Adrian Towse, MA, MPhil, Director of the Office of Health Economics in London, UK, added, “There are significant barriers to implementation: measurement issues, lack of data infrastructure and a lack of trust between payers and product manufacturers as well as the substantial cost involved.  However, if these problems can be solved, the benefits could be far-reaching, promising to improve population health and drive system-wide efficiencies.”


Value in Health (ISSN 1098-3015) publishes papers, concepts, and ideas that advance the field of pharmacoeconomics and outcomes research as well as policy papers to help health care leaders make evidence-based decisions. The journal is published bi-monthly and has over 8,000 subscribers (clinicians, decision-makers, and researchers worldwide).

International Society for Pharmacoeconomics and Outcomes Research (ISPOR) is a nonprofit, international, educational and scientific organization that strives to increase the efficiency, effectiveness, and fairness of health care resource use to improve health.

For more information: www.ispor.org

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