
High Risk, High Reward: Understanding, Embracing, and Aligning on Risks in Your Next Outcomes-Based Contract
Shared understanding of both risks and benefits to all parties in the healthcare continuum is essential in order to deliver more value, write Vickie Andros and Jake Caines.
Numerous strategies and tactics are implemented by pharmaceutical manufacturer brand teams to drive awareness. According to Kantar Media, pharmaceutical advertising exceeded $6 billion in 2016. However, value for pharma organizations isn’t driven by awareness alone. The value in awareness is limited as it is commonly
Insurance companies thrive on minimizing risk; health insurers are no exception.
Legacy tactics include: prior authorization, step edits and formulary restrictions. The latest strategy has arrived with the advent of the outcomes-based contract, where reimbursement for a drug is based in part on observed outcomes of the drug’s use in a specific patient population. These contracts give insurers a new tool to minimize their financial risk if a therapy fails to generate the expected patient outcome. These contracts also provide the pharma manufacturer the opportunity to deliver on the brand’s promise.
Traditionally, risk minimization for pharmaceutical manufacturers has been predominantly placed upon the MLR (medical-legal-regulatory review) team. The MLR process is a critically important one that ensures that all pharmaceutical product promotions are medically accurate and comply with FDA regulations and other applicable laws. Without exception, this process leaves its mark on all educational, clinical and promotional materials produced by pharma manufacturers. Ultimately the path to the brand commercialization goes through the MLR gate. More recently, however, leadership at both the Business Unit and Brand levels are also being expected to embrace risk as a proactive commercial opportunity and not merely a reactive function of MLR.
We know that improving medication adherence improves outcomes and reduces costs. Frequently, however, the MLR approval gate closes when it comes to the brand team’s encouraging patient adherence or “persistence.” This is the result of MLR taking measures to limit the company’s risk. According to a
The new axiom of pharmaceutical marketing centers around patient education and engagement. What’s needed are commercialization activities that encourage medication adherence and impact a measurable health outcome. This approach will align with MLR’s goals and charges. Successful incorporation of this model provides answers to questions like where is the greatest opportunity to positively impact value and manage risk in each step in the patient journey from adoption to compliance to persistence? What can the brand team do? What can’t they do? And how can the brand team create short term gain balanced with long-term sustainability?
Every year brings a new record high in numbers of prescriptions dispensed. In
Brand teams can do things that provide value for the patient, the payer, their own company and the future of healthcare, and we’re going to tell you how. Stay tuned.
About the authorsVickie Andros, PharmD, is Director of Clinical Services, and Jake Caines is Senior Director of Commercial Strategy and Performance, both at
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