Value-Based Agreements May Be More Prevalent Than Assumed

Authors: Mahendraratnam N, Sorenson C, Richardson E, Daniel GW, Buelt L, Westrich K, Qian J, Campbell H, McClellan M, Dubois RW
Publication: The American Journal of Managed Care, February 2019

Research published in the The American Journal of Managed Care shows that value-based agreements (VBAs) between U.S. payers and biopharmaceutical manufacturers may be more prevalent than originally thought.

Researchers from the Duke-Margolis Center for Health Policy and the National Pharmaceutical Council conducted the study, believed to the first of its kind, to better understand current activity in value-based contracting. Despite growing public interest in VBAs, there is still relatively limited information about the extent to which these contracts are being pursued. Much of the previous research in this space focuses exclusively on VBAs that have been publicly announced by the partnering companies. However, to gain additional insight on the scope of activity happening in value-based contracting, this study surveyed payers and manufacturers on the structures and processes of their public and non-publicly disclosed contracts. The study found that consideration of VBAs as a coverage and payment tool is increasing, but only around one in four is disclosed to the public. There are several reasons why companies choose not to publicly announce their VBAs, including preserving competitive advantage and avoiding public scrutiny.

The research also shows that there are significant hurdles to overcome in the negotiation process, and that a considerable amount of early dialogues between potential contract partners do not ultimately lead to the implantation of a contract.