Value Based Contracts, Pharmaceutical Space
Provide available information on Value Based Contracts between pharmaceutical manufacturers and payers in the US
Value-based contracts are designed to tie prices to how a drug performs in the “real world,” as opposed to price based on data and evidence collected during the highly controlled clinical trial process. It’s also noted that a benefit of value-based contracts is that they often expand patient access to new therapies, which both benefit the manufacturer and limit financial risk to payer by guaranteeing a clinical result to benefit the insurer. VBRs are increasingly being adopted, with it noted that the medicare payments were between 30-50% VBR in 2018. However, Medicaid’s requirements, including the best commercial discount price must be met by manufacturers is creating some barriers to adoption of value-based contracts. One example of a successful value based contract is Centerstone and Passport.
58% of all hospitals and payers polled noted they are integrating value-based reimbursement contracts.
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