Following the lead of pharmaceutical companies such as Novartis, Eli Lilly and Co. and Amgen, AstraZeneca signed outcomes-based contracts with Harvard Pilgrim Health Care for two of its drugs—the blood thinner Brilinta (ticagrelor), and injectable type 2 diabetes drug Bydureon (exenatide extended-release).
Brilinta is used to lower the likelihood of acute coronary events in at-risk patients, including those who’ve already had a myocardial infarction. Harvard Pilgrim will monitor the drug’s ability to reduce hospitalizations for repeat acute coronary events among members relative to those who are on a different oral antiplatelet regimen.
With regard to Bydureon, Harvard Pilgrim will measure the hemoglobin A1c levels of members who adhere to the drug, to see if it helps them attain a predetermined HbA1c goal.
Under the contracts, AstraZeneca will charge Harvard Pilgrim according to the value the drugs provide to patients, rather than strictly on the volume sold. Should the drugs fail to meet the agreed-upon criteria, Harvard Pilgrim will pay less.
“Real world performance may differ from what is observed in well-controlled clinical trials, and the willingness of pharmaceutical companies like AstraZeneca to go at risk for delivering on these outcomes sends a positive message to health plans, prescribing physicians and patients,” said Michael Sherman, Harvard Pilgrim’s chief medical officer.
FiercePharma noted that neither of the drugs has “lived up to sales expectations lately.”
Our Take: Harvard Pilgrim is leading the way for value-based contracting with pharma. Last year it signed a deal with Eli Lilly for its diabetes drug Trulicity (dulaglutide). Trulicity got a formulary upgrade with Harvard Pilgrim, in return for a money-back guarantee—and potential bonuses. Under the terms of that agreement, if fewer Trulicity patients reach their A1C target—less than 8%—compared with those using other GLP-1 drugs, Harvard Pilgrim will collect bigger rebates from the drugmaker. If more Trulicity patients hit their goals, then Lilly achieves a higher net price.
As we reported in May, Amgen and Harvard Pilgrim executed a “first-of-its-kind” contract under which the health plan can receive a full rebate for the cost of Repatha (evolocumab) if an eligible patient experiences a myocardial infarction or stroke while on the drug—effectively a money-back guarantee. The agreement builds on a pay-for-performance contract they signed in 2015 for Repatha.
Cigna and Aetna have also been active in creative contracting, judging by their public statements. But don’t think for a minute that they are the only ones. A recent Avalere survey of 45 payers found that a quarter of health plans have at least one outcomes-based contract in place, with another 30 percent reporting that they are negotiating for at least one contract right now.
What’s really going on with value-based contracting—a phenomenon we we have been studying for several years—is that the deals we hear about are mostly for their public relations value. More often these agreements are held close to the vest.